Cons of Life Insurance Coverage
Jul 02, 2015
Cons of Life Insurance Coverage
Life Insurance Cons
There are many demerits of Life insurance cover. These are
High premiums
Opportunity Cost of capital
Waste of money
Hidden costs
Lapse of policy
Suicidal death
Misrepresented facts
Surrender value
Less trustworthy
High premiums
Life insurance provider’s charges high amount of premiums to cover their individual risks. Sometimes, paying such huge premiums become very difficult for the insured.
Opportunity Cost of capital
If you have employed the expenses which you are making in terms of payment of premium, in some other investment gateways like FD’s, mutual funds, real estate, you would have earned much greater amount or value.
Waste of money
If you have the plan in which you’ll get money only at the time of death of an insured before maturity, you are at high risk zone, as the premiums paid will be useless, if nothing happens to the insured.
Hidden Costs
There are many hidden costs associated with Life insurance coverage like administrative charges, mortality charges, premium loads and many more, which will make your premiums very high.
Lapse of Policy
If sometime, you are unable to pay your premium, your policy will get lapsed and you have to renew it again by paying extra interest or charges on the unpaid premiums.
Suicidal Death
In case of suicidal death of the insured, the family members will not get any claims on that policy.
Misrepresented Facts
If some facts are misrepresented like any congenital disease, other health problems, record of previous surgeries, habit of smoking, habit of taking drugs, then, the claim cannot be settled.
Surrender Value
Surrender value of life insurance policy is very less if you are going to cancel it. It is even very less than the premiums you have paid till that time
Less trustworthy
Life insurance cover is very annoying in terms of claim settlement. We cannot trust blindly that our loved ones will enjoy claim benefits
Visit at http://www.bankbazaar.com/insurance/life-insurance.html