Whole life insurance offers important coverage that can help protect those you love. However, many people often avoid taking this form of coverage due to certain myths or misconceptions. Today, we aim to shed light on the truth about whole life insurance and how this form of coverage can prove to be so helpful for you! We’ll bust some myths and reveal the truths. Let’s get started –
Myth 1 – The payout from whole life insurance is only given upon death of the insured individual
Fact – Apart from covering you for death, whole life insurance also offers coverage for terminal illness, critical illness and total permanent disability, depending on the plan. Your plan may also have additional benefits wherein you receive a payout upon diagnosis of a serious illnesses or being involved in an accident that impacts your major organs leading to admission in the ICU. Thus, we see how whole life insurance protects you financially through many unforeseen events in life.
Furthermore, if you opt for a participating whole life insurance plan, you can also potentially receive dividends too.
Myth 2 – It is pointless to buy whole life insurance when you are young with no dependents
Fact – Buying whole life insurance in your younger years can prove to be an extremely wise decision. To begin with, you will most likely pay lower premiums than someone who is many years older than you. Also, you will most likely benefit from complete coverage with fewer exclusions.
Now, we never know what life holds for us. Even when you are young – perhaps in your 20s – you may still have some debt, like a student loan. Or perhaps you may have dependent parents. You can thus secure your loved ones’ future from facing debt should something happen to you.
Myth 3 – Whole life insurance is expensive as compared to term plans and therefore not worth it
Fact – Term insurance and whole life insurance each play a unique role in covering you and your future. While whole life insurance plans might be costlier than term plans, the benefits you get are truly worth it. You get the peace of mind knowing you are covered for life. Plus, there is a wide range of whole life insurance plans – you can choose one based on your needs for coverage and budget. Moreover, we also must bear in mind that a whole life insurance plan typically has cash value; this is a feature that is absent with term insurance.
Let’s also quickly look at term plans too. While these are generally cheaper, this form of life insurance is usually taken for specific purposes of coverage. For instance, you might want to take a term plan for 20 years to cover your home mortgage should anything happen to you during the same period. Therefore, consider term plans exclusively to cover life events such as your child’s university fees, a home loan, etc.
With these myths now laid to rest, we hope that you go ahead and get the coverage you need. If you still require a bit of help, do reach out to a financial consultant for assistance in getting life insurance coverage.