Myth 1: Insurance is for saving tax
The primary function of Life Insurance is to cover you against sudden losses arising out of sudden death or liability. Unlike other investment options like the Public Provident Fund that offers 100% tax benefit under Section 80 C of the Income Tax Act, 1961 or other small savings schemes like post office deposits and national savings certificates. Insurance, primarily offers you complete security arising out of risk coverage against the uncertainties of Life and secondarily serves you as a good investment option and tax saving tool. Hence, as an instrument, Life Insurance offers you the ideal blend of risk cover, returns and tax benefits. 

Myth 2: Odds Are I Won't Need It, So Why Spend The Money?
Why skip Life Insurance to save money? The reason why Life Insurance is cheaper for younger people to buy is because chances of death are very low for youths. But Life is unsure and the time of our death is not predetermined therefore one should buy Life Insurance to provide for your family incase the worst does happen. If right kind of Insurance is bought you could provide enough financial security to your dependents.

Myth 3: I'm young so odds are I won't need Life Insurance.
Some people are gamblers by nature and choose to take their chances by skipping out on Life Insurance completely and they think its very unlikely that they will die during your working years. Through Life Insurance you are not insuring for what's likely to happen but instead, for the worst-case scenario. That's why term Life Insurance is inexpensive for young, healthy people. Buying Life Insurance now means you'll be providing financial security without spending a lot of money for it.

Myth 4: I Don't Work So I Don't Need Insurance
Even those without jobs need Life Insurance. A jobless parent with dependent children need not buy Life Insurance, as there's no paycheck to replace. However childcare could cost Rs. 10,000 to Rs, 1,00,000 annually. So estimate the amount it would cost for your family and use that number for your "salary" when calculating Life Insurance needs.

Myth 5: People in poor health can't get Insurance.
Don't assume that you won't be able to get Insurance because you're living with some illness, such as diabetes or heart disease. Lot of companies specialize in this type of Insurance and from whom you can get the same at slightly higher cost.

Myth 6: Income earners should buy seven times their annual earnings.
You may think that because you've followed some thumb rule that states you should have go for Insurance equivalent to four, five, seven or some other multiple of your annual income. In fact instead of following thumb rule you should see that your Insurance policy is enough to protect your loved ones financially.

Myth 7: I'm the Breadwinner in the Home, So Only I Need Life Insurance.
Cost of childcare is increasing day by day; add this along with housekeeping, food preparation, home accountant, and school transportation. From that list alone you can feel that how much a spouse really contributes to the household budget. It is estimated a non-working spouse contributes at least, but usually more, the equivalent of a full time job. For this reason it is important to buy Life Insurance for everyone in the household if the absence of their income would cause a financial hardship.

Myth 8: I have Life Insurance through my job. I don't need any more coverage.
False. The truth is your Life Insurance coverage through your work may not be protecting your and your loved ones as much as you think. Review how much your employer-paid Insurance provides and calculate whether this is enough to keep your family comfortable through the difficult times if you're not around. When you leave your job for any reason, including retirement, your coverage will cease.

Myth 9: If term Life Insurance is really so cheap there must be a catch.
There's no catch. Your basic term Life Insurance policy will offer you coverage so long as you pay your premium. You buy term Insurance for the duration of time you'll need Life Insurance, whether that's until the kids are out of school or until your mortgage is paid off. Plus, your premiums are fixed for the length of the term. They won't increase even if the status of your health changes.

Myth 10: Insurance does not give good returns
It’s true that there are other investment options that could give you more returns than Life Insurance. If returns are evaluated in isolation, other investment options definitely looks good. However, Life Insurance offers you other benefits, in addition to returns. 

Myth 11: I don't need Life Insurance once my children are self-supporting and my mortgage is paid off.
Everybody's Insurance needs vary. But how your spouse would manage daily living expenses without your help? And what if your spouse outlived you by 10, even 20 years?