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Myths and Facts of Life Insurance Policies You Need To Know

By PolicyBazaar
  | Published: 10 June 2020 | Last Updated On: 08 February 2021

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Before you consider ignoring to opt for a life insurance plan solely because of the myths, it is better for you to be aware of the facts.

Life insurance is one of the finest and the most secure ways by which you can protect yourself and your loved ones against any uncertainties in life such as accidents, mishaps, unforeseen occurrences, loss of income because of a disability or ailment, the demise of the income-earner of the family, or even against meeting the various short-run and long-run financial goals one may have set.

This financial vehicle is designed in such a manner that it provides the policyholder with an extensive list of benefits so that the insured along with the family members can meet the financial goals and overcome any crisis financially in a smart manner.

In spite of these various benefits provided by the best life insurance in UAE, there are numerous misconceptions and myths pertaining to life insurance. It is important for you to educate yourself about the truth and keep any false information afar. Knowing the benefits offered by a life policy can help you in reaching a wise decision and also in enjoy maximum benefits from a life coverage plan.

This thread aims at putting a stop on the common myths that are circulated around in regard to the life insurance policies. So hang on to get informed when you further read more about these myths and the various facts.

Myth: Life Insurance Benefits Only After the Demise of the Policyholder

Fact: Believing that a life insurance policy only offers benefits once the insured individual passes away is the most common myth that is linked with such a coverage policy. This, however, is not entirely true. Ideally, life coverage is meant to offer financial support in case of the demise of the policyholder. However, there are various kinds of life coverage policies available in the market to meet the different requirements and needs of the individual investor.

Life insurance is generally classified into pure life insurance coverage and life insurance coverage linked with investment opportunities that help in meeting other financial goals.  A term insurance plan is an example of a typical pure life protection insurance plan, whereas, ULIPs, moneyback, retirement plans offer much more than just protection against the risk of death.

Myth: Coverage Offered by a Group Life Insurance Plan is Sufficient

Fact: The lack of knowledge regarding the term for which the policy at hand would provide you coverage is the main reason that leads to such myths among people. The fact, however, is that an employee who is covered under a group life insurance coverage provided by his or her employer, the coverage provided is only valid under such a policy till he or she is still employed with the employer. Once the individual leaves the company, he or she is no longer covered under this same group coverage.

Therefore, it is always recommended to opt for a life insurance policy separately so that you can avoid any surprises that are unpleasant once you leave your present company. Also, even if the policy seeker is employed in the same company or switches jobs to a company that also provides life insurance group coverage, the insured individual must be certain of the coverage offered by the group policy. One should be aware of the coverage offered under the group policy is sufficient to financially support or cover in case of any unforeseen occurrences.

Myth: There are Better Investments than Life Insurance in the Market

Fact: Comparing a life insurance plan to other investment alternatives in the market is definitely a wrong decision as both investment options function in a manner that is completely different from each other. The reason behind opting for a life insurance plan is that it will keep your family financially secure when you are no longer around to take care of them. However, this might not be the case when we talk about your other investment alternatives. Moreover, the best life insurance in UAE will also help in eliminating the risks that are involved in other investment avenues.

Myth: People with Existing Illnesses Are Not Eligible to Opt for Life Insurance

Fact: There are many insurance providers out there that provide the best life insurance in UAE for people who are suffering from existing medical illnesses. However, keeping in mind the medical history and the extension of the cover for the policy seeker, the insurance company might be charging premiums that are slightly higher than otherwise.

Also, it is extremely important for the policy seeker to provide the right information during the process of applying for the coverage itself in order to avoid any surprises during the process of filing a claim. Some of the common reasons that lead to the rejection of some of the claims under similar cases are sharing false or incorrect information or sharing incomplete data regarding the medical history with the insurance company.

Myth: You Don’t Need To Compare While Buying a Life Insurance Plan

Fact: There are many insurance companies that offer the best life insurance in UAE. The surplus of the available life coverage products can be quite overwhelming when one is shortlisting from the extensive list available before buying. Ideally, one should either seek help from a financial planner, an insurance advisor or simply compare the numerous plans using online platforms. Comparing best life insurance in UAE online is a good alternative as this will help you in comparing various different plans without any hassle simply at your screen and you can make an informed choice about the plan that is the best when it comes to your requirements and needs.

The Bottom Line

Always remember, it is important to keep life insurance first. And, before you go ahead and ignore the need to opt for a life insurance plan just because of the common myths, it is important to check out the facts.

With numerous online options available, it has become much easier to compare the various policies and find the best life insurance in UAE as per your needs. So, before believing the myths, it is important to go online or consult an expert so that you can make an informed decision.