Financial independence and security is something that every individual strives to attain during his lifetime. Life insurance policy is an integral part of the financial planning process as it helps you to secure not just your future but that of your family as well. In this article we look at some of the myths that are prevalent in the field of life insurance.
Myth 1: Life insurance is something for old people; I can always invest in one at a later stage
Fact: Life is very unpredictable and this means that death can strike at any time irrespective of age. Investing in good and comprehensive life insurance policy early means that you will be able to secure your financial future in a better and enhanced manner. This is because premiums are less expensive and you will have less assets to pass on to your heirs. The longer you wait, the more expensive it will become especially as with age, medical conditions also increase. So invest in a good policy as early as you can because the rewards are much better at that stage.
Myth 2: Life insurance can wait till I have my own family
Fact: Not having a family or dependent is no reason to not invest in a life insurance policy. A number of insurance companies offer policies that expire at the age of 60-65 years offering substantial returns to the investor at their retirement age. With increase in life expectancy, investing in a good life insurance can mean an added financial cushion as and when you retire and also decrease your tax burden during your earning years.
Myth 3: My office provides me with a group insurance which is sufficient for me
Fact: Many salaried individuals often do not invest in insurance beyond the group insurance that their office provides. But you have to understand that a group insurance is only good as long as you are working in that particular organization. Once you leave the company, the life insurance policy also becomes ineffective. In addition, if you leave your job and become self-employed especially in your later years, a life insurance policy can prove to be very expensive.
Myth 4: It is best to trust an insurance agent
Fact: Many people assume that a life insurance agent is the best person to advise them about the policies and plans in the insurance market. But this is not always true. Sometimes insurance agents sell policies only to improve their monthly targets. So if you are planning to buy a policy always research about it in a proper manner and invest in a reputed and known insurance company. It is good to seek advice but make sure that all are doubts are resolved before you invest your hard earned money in any kind of scheme or policy.
Myth 5: Life insurance locks away my money for a long time
Fact: Many people refrain from buying a life insurance policy simply because it locks away their money for a long duration of time. They think that they will not have the freedom to use the money in case they are in an emergency. True, there might be a lack of liquidity while investing in a policy but there are so many advantages of a life insurance policy especially in the case of an unforeseen tragedy.
The importance of life insurance can therefore never be underestimated at any stage. But remember that every person’s need is different and that is why it is important to make a informed decision at all times. A life insurance policy can effectively secure your financial future but understanding all the aspects of the policy is equally important as well.
Article Source: http://www.yooarticles.net/article/5-myths-about-life-insurance-policies
