​Although term insurance cover is extremely important, it is seen that life insurance penetration in the country is extremely low. While this can be attributed to limited financial awareness, what is more disturbing is that many people do not take a life cover due to certain misconceptions and myths they consider about the product. Here we debunk the 7 top myths associated with term insurance. 

(1)  Term insurance is a great investment:
Many people think insurance = investment. This is not just a myth; it is a huge misconception. With the advent of new forms of life insurance which combine an investment component, the common man thinks that buying insurance is more as an investment than as a risk cover. However, insurance is only to protect the dependents of the insured and for this purpose, a term insurance is the best form of life insurance you can take. That is why we say – you buy an insurance policy and you do not invest in an insurance policy. 

(2) Term insurance is only to save tax:
Buying a term insurance gives you tax benefits under Sec 80C. This is one of the most popular avenues to save tax. However thinking that the sole purpose of purchasing insurance is to save taxes is incorrect. This is just one of the incidental benefits. 

(3) Term insurance is only for the old:
​Many a time, it is thought that young people is their 20s and 30s do not need insurance cover. This is because insurance is associated with death. However, remember that death can occur to anyone at anytime. A term policy is to cover your life and provide for your dependents in case of your death. Therefore there is no age bracket which is required to purchase a term policy. Further, the earlier you start a term policy the lower will be the premium to be paid. 

(4) I am unhealthy; so I will not get term cover: 
While the healthy think that they do not need a term policy because they are fit, the unhealthy think that they will not be eligible for a term policy because they will not pass the medical tests. However, this is not the case. If there is a problem diagnosed in the medical tests, your premium amount will be hiked accordingly. However, you will not be rejected the policy. 

(5) Only the male member in the family needs a term cover: 
Another myth is that only the husband or the main earning member in the family needs to take a term policy. However, if the wife is also an earning member, then it is logical that the family depends on her income as well. Insurance is primarily taken to replace the lost income of the insured person in his or her death. Therefore sufficient term cover should be taken for all the earning members in the family. 

(6) The employer’s life cover is sufficient: 
Many employers provide a life cover to their employees. This is considered to be a sufficient cover by individuals and they do not buy a secondary life cover. However, remember that the employer’s insurance policy is valid only as long as you are employed with him. Once you change jobs, you will be left with no insurance. Buying a term cover in your 40s when you change jobs will be more expensive than if you buy earlier. 

(7) I have a term cover; so my job is done: 
Buying a life insurance policy is only the beginning. It is usually considered that if you buy a term cover then your job is done. But it is important to regularly reassess your insurance needs and evaluate if you need to increase your cover. Marriage, birth of child, higher liabilities and career changes often require you to enhance coverage levels. 

Term insurance’s importance is generally not understood till very late in life, when it becomes expensive to purchase one. Debunk these myths and purchase your policy today, if you have not got one yet.