The decision to buy life insurance is often accompanied with confusion, hesitation or even denial, as it entails accepting one's mortality. However, it is important to know facts before purchasing life insurance to protecting one's loved ones from harm. So let's see some common misconceptions regarding life insurance which I hope will help you to take a decision.

It is difficult to get the claims

If you buy a life insurance from a good company, there is no reason to reject a legitimate claim. Every life insurance contract has several exclusions which describe situations that the policy does not cover. Except the scenarios under those exclusions, insurance company has no right to reject your claim.

As a customer, you should also understand the included and excluded events before purchasing the policy to avoid any unpleasant experience during claims. If a legitimate claim is denied by your insurance company, you may also seek insurance regulator's (IDRA) support to resolve the issue.

I should think about savings only

It is important to focus on savings, but a life insurance policy can give you the protection which is sensible as far as foolproof financial planning is concern. For instance, a term life insurance is fairly inexpensive which can cater the protection element. So even if you have sufficient savings, the need for life insurance does not disappear.

Life insurance policy is expensive

One of the biggest myths about life insurance is that it is not affordable with a decent level of income. However, life insurance can be affordable depending on the coverage you are looking for.

You can start with a policy that remains within your budget. With the increase of your income level, you may be able to purchase additional coverage later on. Insurance company can also recommend appropriate premium for you through financial underwriting.

I am single/young, so I don't need life insurance

Even if you fall under this group, life insurance is worth to purchase as it costs the least when you are young and healthy. The longer you wait the more likely you are to develop a medical condition that makes it more expensive. Besides, planning early not only helps protect your loved ones, but also gets you started on a financial plan for the future.

I have life insurance through my employer which is enough

Usually, life insurance policy offered by the employer follows a standard cover and you cannot customise it based on your needs. Also such policy is not transferable i.e. if you leave your job then you are likely to leave the life insurance protection behind and your new employer may not have sufficient insurance plan for you.

Finally, you will not get any tax benefit from this policy as employer will pay the premium. However, when you buy separate life insurance policy, you can personalise the coverage and other benefits according to your needs.

I have health issues, so I can't get life insurance

Unless you have severe health conditions, you generally can buy life insurance. Conditions such as diabetes and high cholesterol would increase the premium, but insurance could still be within reach. You can easily find some companies that cover a range of health conditions.

Life insurance is not available for older people

In our country, a person can usually buy a life insurance up to age of 55 years unless the person has severe illness. The cost of coverage, of course, is much higher for older people as the mortality risk is higher than younger people.

The awareness of life insurance is very low in our country and hence there exist so many misunderstandings about life insurance.

Finally I would say, whatever decision you make when it comes to life insurance, just be sure it's an informed decision.

The writer is a certified actuary from the Society of Actuaries, USA. The views expressed here are personal.