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Bursting the myths about insurance


There are several myths shrouded around insurance that it is difficult to peel off these myths even today and people often shy away from insurance because of the misconceptions and prejudices that are either non-existent or may once have plagued insurance field but not in the present digital world.

“No one wants to think about dying or how it will affect your loved ones, but a policy could mean that no one else ends up encumbered with your debt,” Feldman says.

We understand that insurance may not be the most exciting financial topic and few people who have all their financial needs sorted out may not need insurance, but this post is to make sure that your decision on insurance is a well-informed one and not based off a myth about insurance. Below are some of the common myths about insurance:

1.      I’m single as pringle. Why would I need insurance?

If you’re single and don’t have any mortgages to leave unpaid if the worst happens to you, you probably won’t need insurance. Even if that is the case, putting together a simple funeral may cost a lot, given that even a coffin costs anywhere from 3,000 to 30,000 rupees. You may also want to consider the credit cards debts and unsecured loans that might fall on your next of kin’s shoulders if you’re not around to pay them back. Besides, it may be wise to purchase insurance when you’re young, when it’s easy and affordable, rather than getting insured when you’re old when it becomes pricier and sometimes uninsurable due to medical issues.

2.      Insurance is expensive!

Expensive is a relative term. What might be affordable to you, can be expensive to many. So, depending upon your income, you are sure to find an affordable insurance from the numerous options available. There’s no one-size-fits-all insurance. You can skim through the dozens of insurances available and choose the one that cater to your needs at policytray.com.

3.      Choices, choices everywhere!!

One could easily get baffled at the sheer number of options available. One might not have the time and expertise to read through all the insurance ever available and choose the perfect one. Instead you can opt for platforms such as CoverNest which makes your job easy and gives you the best options for you.

4.      It is difficult to claim insurance

Unless you’re making a fraudulent claim, you’ve nothing to worry about when it comes to insurance claims.

5.      Old people won’t need insurance

The primary purpose of life insurance is to replace the future income of a primary breadwinner. Two groups most likely to need it are middle-aged couples saving for retirement and parents of minor children - Forbes

Probability of dying is even greater when you’re old and insurance is almost vital when you’re an aging primary breadwinner of the family. Also, with increase in age, you’re more susceptible to health problems.

6.      I am a stay-at-home parent. Why would I need insurance?

A stay-at-home parent plays multiple role at home, serving as housekeeping, cook, laundry and grocery shopping – in short functioning as CEO at home. It can be very easy to overlook the financial contributions of a work-at-home spouse—that is, until the person is gone.  If you or your spouse decides to remain at home to take care for your children, don't forget that the contribution of the stay-at-home spouse can equal tens of thousands of dollars a year. The loss of value that accompanies upon losing a parent is irrevocable, but the financial hardship that entails the loss can be prevented by purchasing insurance.

7.      Investing is better than insurance

Some of the benefits of getting insured over investing are: you get a tax deferred growth; you can borrow against the cash value to buy a house or marry off your kids, without paying taxes; you will be covered in case you fall terminally ill; you will be covered till your death or as long as you pay the premiums.

8.    Insurance coverage at work is enough. Don’t need no more!

You may not be satisfied with the employment coverage due to many reasons: the plan may not cover your spouse enough, you may have had an increment which doesn’t carry on with the insurance or you may want a much higher or a cheaper insurance than the one that is being currently provided. Most importantly, it is wiser to go for an individual insurance over employment coverage as you’ll lose the insurance once you employment situation changes.