Most people in India have a false or partial idea when it comes to purchase insurances and hence hesitate to purchase it. Insurance basically is an instrument that has the means to protect people from financial losses that may occur due to various reasons. It is a kind of risk management primarily used to safeguard people against the unforeseen and uncertain losses.
Usually, an officially legitimate entity provides insurance, this entity is known as an insurer/insurance company/insurance carrier. The person or entity who buys the insurance from the insurer is known as an insured / policyholder. The insured is bound to pay a fixed premium on a regular basis based on the agreement with the insurer in exchange for the insurer's promise to reimburse the policyholder and financially protect him in the event of any loss that is caused by any of the cases covered by the policy like medical emergencies, vehicle accidents, theft etc.
Hence, buying insurance is a must - be it life insurance, health insurance or car insurance to protect you against unforeseen situations. Listed here 5 common myths about insurance that each individual should be aware of:
1. Insurance is expensive and a waste of money
Most of the Indians today think insurance is a waste of money which is untrue. Insurance protects us and our family members from incidents such as untimely death, health issues etc. of ours or our family members depending on who the policyholder is. For example, when it comes to life insurance, many people are reluctant to buy life insurance as they falsely perceive life insurance premiums to be expensive. But, that’s not the case. Life insurance premiums vary based on an individual’s lifestyle, health, and age. Hence, you can find an affordable life insurance policy based on your budget. Besides, term policies are inexpensive and affordable for providing life coverage with different premiums to choose from according to one's family income. Buying a life insurance policy - be it whole life or term policy, is a good choice if you want to secure you and your near ones future.
2. Insurance is only for availing tax benefits
Life insurance has tax benefits! This is mostly used as a selling point by the insurance agents. But availing tax benefit is not the only perk you get from insurance, it is just one of the many benefits offered by a life insurance policy. The primary benefit of any insurance is to provide financial assistance in case of an emergency where a financial loss is certain. Paying fixed premiums in a timely manner supports the financial needs of the policyholder and the family during an untimely incident of death or theft.
3. Young and healthy don't need insurance
This is a common misconception when it comes to either life or health insurance that only old people need insurance. But that is not the case. Most cases, young people also suffer from various critical illnesses and hurry to buy insurance to cover their medical expenses. It’s always important to purchase insurance at your young age. Also, lower premium rates are offered to the young because of their age. It becomes difficult to purchase life/health insurance at old age as premium rates go up. Also, there is the possibility that an insurer might deny coverage to old people due to high health risk. It is also vital to buy insurance for children as they are most prone to accidents and mishaps. Similarly, if you are purchasing a vehicle, it’s equally important you also purchase car insurance so that you can protect you, your vehicle and the third party from any kind of accidents.
Most of the Indians working today think that insurance such as medical insurance provided by their firms is enough. But the truth is that it covers you and your family only till you are an employee of that particular firm. Once you leave the firm due to personal reasons or retirement, the insurance also lapses and doesn't provide any financial benefits. There is also a chance that employer at the time of your untimely death would not agree to cover the living cost of your family.
It is therefore strongly advisable to buy insurance when you are young and start earning, regardless of whether or not your employer provides you with one, this ensures that at the time of any unfortunate incident, your family will be financially secure and their living expenses will be met.
5. Claiming insurance benefits is a painful process
This is also another common misconception among Indians that claiming insurance benefits is a painful process. To ensure a smooth insurance claim settlement, it is important to disclose the necessary documents with the proposal form. This helps the nominees to claim the insurance and its benefits smoothly. The insured/nominees, therefore, need to be vigilant while filling the proposal form as any error with respect to the documentation can cause the insurer to deny insurance benefits to the insured or his family in the time of urgency.
Insurance is important! If you haven’t yet covered yourself with any insurance, do it right away. Don’t get misled by the common misconceptions.
No comments:
Post a Comment