Demystifying common insurance myths
Insurance is often bought and sold for the wrong reasons. Though insurance is a risk cover, many of us mistakenly consider it as a mere investment and tax saving product.
In simple terms, insurance allows someone who suffers a loss or accident to be compensated for the effects of their misfortune. It lets you protect yourself against everyday risks to your health, home and financial situation.
In this article we have tried to demystify six common myths about insurance.
Insurance Myths 1 : Insurance is for saving tax
Saving tax is just an added advantage of insurance policy; the main objective of insurance is to provide protection to you and your family and to build an assured corpus for your future needs. Know more about Tax Planning with Section 80C.
Insurance Myths 2 : Insurance will benefit only after my death
Insurance polices provide protection to you and your family. Though one of the main objectives of taking insurance is to provide financial cushion to your family for times when you are not around, but it’s not the only objective. Insurance covers the risk of a person dying too soon or live too long. Insurance helps you to build a corpus for yourself; provides you with comfortable retired life and even takes care of your lengthy medical bills. Are your finances geared for medical emergencies?
Insurance Myths 3 : My group insurance is adequate:
Your group insurance might be adequate but what if you change the job? Once you change the job your group insurance will cancel off and you will not get any insurance benefit. So it is always advisable to take insurance other than the insurance offered by your employer. Do you have adequate life insurance cover?
Insurance Myths 4 : Only the Breadwinner of the family needs insurance
Every family member needs insurance. Your work profile changes the insurance needs but certainly does not eliminate them. Buy insurance cover that suits your need.
Insurance Myths 5 : I’m single and don’t have any dependents, therefore I don’t need any coverage
You might not need a life insurance policy where your nominee is taken care of but you certainly need a policy to take care of your health and retirement worries. Retirement Planning – Start now, Save more, Retire rich
Insurance Myths 6 : Life insurance is far more important than health coverage:
As the health costs are increasing by the day, taking a health insurance plan has become as important as a life coverage plan. Health plans, disability plans and critical illness plans provide you with financial cushion and compensate for the financial loss you suffer in case you are not able to work because of illness. If life insurance plan secures the future of your loved ones then health coverage plan secure your own future. Health insurance is a must for everyone
He has authored several analytical articles on personal finance in The Times of India and The Economic Times. Being a finance geek and having been involved with internet since the early days of the medium, he was a great help and source of guidance while formulating personalmoney.in. You can know more about Manish at ManishMisra.com
Disclaimer : Manish has agreed to write in his personal capacity. Views, opinions expressed in his articles are his own and do not necessarily reflect the views of his employer.PersonalMoney.in