Term Insurance Myths vs Facts

Unlike the ancient Greek myths that provide resourceful information that positively shapes modern beliefs, insurance-related myths are nothing but conjecture. Term insurance is one of the simplest yet most misunderstood financial products. Misconceptions about it are widespread, whether it's about who needs it, when to buy it, or what it really offers. Unfortunately, these myths can prevent people from making smart financial decisions that safeguard their families.

Consider this: Saurabh is a 34-year-old man who works as a corporate lawyer in a reputed multinational. He lives with his wife Divya, 2-year-old son Shaurya and 3-year-old daughter Trishala. Saurabh is planning to buy a beach house in the next two years and dreams of sending both Trishala and Shaurya overseas to pursue higher education. He is the sole breadwinner in the family. While Saurabh does invest a part of his income, he doesn't feel the need to get himself insured. Why do you ask? Saurabh believes he's healthy and too young to waste his money on a term insurance policy, since he is optimistic about life, plus he feels term insurance does not give any returns. Just like Saurabh, you may also tend to believe in these general notions related to insurance. Why general and why myths? Read below to find out the reality.

I'm Young, I Don’t Need Insurance

Reality: Ever wondered why insurance ads only feature middle-aged and old people? It's probably because 'insurance is for old people' is the most common insurance-related myth that exists. As youngsters, you might assume that you don't need insurance as long as you are youthful and don't have any responsibilities. But the truth is, buying life insurance at a young age can help you leverage lower premiums, as premiums tend to increase with age. Aside, since most likely you won't be having dependents at an early age, it would be easier for you to spare a nominal amount for the premium every month or year.

Term Insurance is too Expensive

Reality: If you can assure your family's stability with a monthly or annual premium, isn't it worth considering? It's important to understand that term insurance is not an extravagance. Also, did you know that you could buy a term plan that offers a cover of ₹1 crore at merely ₹365 per month? That's less than what you might spend on a fancy dinner or a movie outing with family! Yes, term plans offer extremely affordable premiums that make them a great option for youngsters.

If you're looking for one such inexpensive term plan, try iSelect Smart 360 Term Plan by Canara HSBC Life Insurance. It is a pure protection plan that offers life insurance and terminal illness cover along with optional additional cover against accidental death/disability. With iSelect  Smart 360 Term Plan by Canara HSBC Life Insurance, you can select the desired benefit payout option, whether it's lump sum, lump sum plus monthly payout, or monthly income. You also get the option to increase your life cover as your responsibilities increase.

Insurance is for Married People

Reality: Ever thought of the legacy you would leave behind if something were to happen to you? If you're single and feel you don't need insurance, think about the unpaid expenses you would leave behind if something happens to you. You wouldn't want to burden your family with them, do you? Moreover, wouldn't you want your parents and siblings to be financially stable in any eventuality? Life insurance can give you peace of mind that your loved ones are going to be fine even without you, so single people need insurance just as much as their married counterparts.

Also, starting early helps build good financial habits and allows you to upgrade your cover later when you do have dependents. A term plan today can turn into peace of mind tomorrow.

I'm Healthy, Why Do I Need Insurance?

Reality: We can't ignore the uncertainties of life. Even if you are young and healthy, you're not going to remain that way forever. The sole purpose of life insurance is to prepare for any unforeseen event, allowing you to provide support to your family after you're gone. Waiting until you have health issues could lead to higher premiums or even denial of coverage. Buying term insurance early ensures you’re protected no matter what happens down the line.

Term Plan Offer Only Lumpsum Payout

Reality: Contrary to this popular belief, a term plan provides multiple payout options for you to choose from. Based on your family's financial needs, you can choose between lumpsum, lumpsum plus monthly income, monthly income over a fixed term or monthly income till the end of the policy term payout options. The iSelect Smart360 Term Plan by Canara HSBC, for instance, lets you choose the payout structure that best supports your family’s lifestyle and financial maturity.

The Cover Once Opted for is Fixed

Reality: As you move ahead in life, your responsibilities are bound to increase, and so should your life cover. With a term plan, you get the option to increase your life cover after a particular number of years to meet your growing financial needs. So, for instance, if you opted for ₹50 lakh at age 25, you can scale that up to ₹1 crore or more as your liabilities increase without starting a new policy from scratch.

Insurance Doesn’t Give Returns

Reality: One of the biggest deterrents people have about term insurance is the absence of a maturity benefit. The idea of “losing money” if you survive the policy term may seem like a drawback. However, term insurance is fundamentally about financial protection, not profit. It ensures your family remains financially secure if something happens to you. In that sense, the value of peace of mind and safety far outweighs any monetary “return.”

That said, for those who still want a survival benefit, there's a smart option available: Term Insurance with Return of Premium (TROP). These plans refund all your base premiums if you outlive the policy term. It's like getting rewarded for staying safe.

So, whether you want pure protection or protection with a premium refund, today’s term insurance plans give you the flexibility to choose what fits your mindset and financial goals best.

Think of it this way: just like a fire extinguisher that refunds your money if never used. TROP offers the best of both worlds.

Conclusion

Term insurance isn't just a policy; it’s a plan to protect everything you’ve worked for. Myths, like the ones above, only delay action and put your family’s financial future at risk. If you’re looking for a trusted partner to guide you through this journey, Canara HSBC Life Insurance offers plans that are flexible, affordable, and tailored to every life stage.

Saurabh may have thought he didn’t need insurance, but now, you know better. Don't let myths write your future. Secure your family today with the truth and the right protection plan.