People, as individuals and as families, look toward insurance for financial security and peace of mind. But then, so many fallacies and myths about life insurance plans exist that it becomes a pretty confusing situation and leads one to make improper financial decisions. In this blog will talk about the most common myths regarding insurance and provide transparency to the truth that backs this essential part of one’s financial planning.
Myth #1: Insurance Is A Waste Of Money
One of the most commonly used arguments – insurance is simply a waste of money, especially when the person has never filed a claim. Insurance is indeed among the best means of managing or protecting against a great number of financial risks that can be experienced in the future. It may not be a tool that can be used frequently, yet it is among the most effective tools that can help to avoid a loss of money.
Myth #2: It’s a Young Man’s Game; I Do Not Need Health Insurance
Health insurance is not only to be sought during illness but also healthiness and health insurance is a shield. Sad to say that sometimes individuals may have accidents or get sick at any age, and this requires a lot of expenses which cannot be easily handled.
Neha, a 28-year-old fitness freak girl from the capital city of India, never imagined herself to be a victim of a disease. Once while cycling, she met an accident and had to be operated upon with a strenuous exercise regimen of physiotherapy. She had no insurance coverage, and she was forced to clear a humongous bill which was financially unbearable.
Myth #3: All Insurance Policies Are The Same
Not all insurance policies are created equal. Each type of insurance serves a distinct purpose and provides different levels of coverage. For instance, the difference between auto and health insurance is huge. It is important to understand what is insurance and the details about your policy—amounts covered, deductibles, and exclusions.
Myth #4: I Have Enough Coverage Through My Employer
Employer-provided life insurance, despite being a valuable benefit, may not meet all financial needs. The coverage typically ends when employment ends and may not meet individual needs. Adding a personal life insurance policy ensures that an individual’s financial situation remains stable, even after retirement, in case employer coverage is not guaranteed.
Myth #5: I do not think that it is wise to have insurance in life because I am single and do not have dependents.
People with no families also may have to cater for themselves for such wants and these include the things which are necessities in life and those which are considered luxuries, unstable sources of income, rent or house bonds, or student loans. When you buy a life insurance policy, even as a single person, you take a positive measure in securing your future and positively impacting those around you.
If one can discern between the myths and reality, then one would be able to appreciate the essential need of having life insurance coverage as a means of ensuring a safer future for oneself and also the immediate family.