All the wrong reasons to buy life insurance
In today’s fast paced life, stress is riding high. It is an inviting circumstance for many illnesses. Life insurance policies are of utmost importance these days. However, there are still many people investing in wrong policies with completely wrong motive. We list down five wrong intentions to buy a life insurance policy.
- You want to oblige the seller
You are likely to come across an insurance agent in the form of a family relative persuading you to invest in a life insurance policy. However, you need to understand, the very first people whom these agents are taught to approach are their close acquaintances. So, if you fall in such situation, the only advice we would like to give you, don’t fall prey to it if the person isn’t a close family member and some genuine need of money.
- You want to save tax
A lot of people carry half understanding about the term ‘tax’ and with the half knowledge they possess they end up taking some wrong decisions. If tax saving is your ultimate motive, then there are many avenues you can look for besides life insurance policy alone. A life insurance policy can never give you optimum tax benefits.
- It combines insurance with investment
With the motive of earning higher commission, agents often entice the customers with words like dual purpose, investment and insurance. However, you need to understand that the rate of returns even for a long term investment in any insurance policy is as small as 5-6%.
- You are looking for guaranteed returns
Many policy buyers fall for the idea of guaranteed returns promised by the insurance companies. However, guaranteed returns demand high amount of investments. This guarantee comes at a high price, forcing the company to invest in safe, debt-based options.
- No medical check-up is required
Every company conducts their own set of medical tests in order to approve the cover assured on the policy purchased by you. However, the leniency of a particular company shouldn’t be the sole reason to take up a particular policy. In fact, take it the other way round; if a company is assessing your health completely, they are bound to provide the buyer with the necessary cover.