Are you worried about your family’s future finances when you are not around? Don’t worry, you are not alone. You should consider including a term insurance plan in your financial planning. These plans not only take care of your family’s financial security, but also gives some saving options such as tax benefits.
Term assurance, also known as term life insurance is a type of life insurance that provides life coverage for a specified period at a fixed rate of payments, known as premiums. Term insurance is not an investment. In case the policyholder passes away during the tenure of the policy, the insurance company pays a death benefit to the beneficiary. Thus, term insurance plans are one of the requisites for the safe future of your loved ones. If you are still unsure whether you need a term life insurance plan or not, ask yourself these 4 questions:
Are you the sole breadwinner in your family?
If the answer is yes, then you should strongly consider buying a term insurance. The reason being, if in any case, you are no longer there to fulfil the needs of your family, then what will happen to them? As the sole earning member, all the current family expenditures and future objectives are dependent on your capacity of earning. In case of your untimely demise, the income would get troubled, resulting in a challenging financial circumstance for your family. In such cases, a coverage amount would be helpful to sustain their regular lifestyle. Term insurance provides various options for payouts that can be chosen as per your requirement.
Do you have any liabilities or debts to be taken care of?
A term insurance can prove to be beneficial if you have any liabilities or any other loans. For instance, if you’ve availed a loan of Rs 50 lakh and a sudden misfortune happens and you are no longer there with your family, then how would your family keep paying for the EMIs? In this kind of scenarios, a term insurance plan plays a crucial role. For example, if you have taken term insurance worth Rs 2 crores, then using the coverage amount, your family could easily pay off the debts or loans. And with the remaining money, they can continue their current lifestyle.
Are you looking for high life cover at substantially low premiums?
Term insurance plan is perhaps the only life insurance plan that offers high life coverage at significantly low premiums. For instance, a 26-year old working person can find a Rs 2 crore term plan for just Rs. 38/day*. A life insurance coverage like this can shield your dependents for only under Rs 38 per day. In case of your untimely demise, your dependents would fetch Rs 2 crore lump sum amount, which will help facilitate their financial burden. You can use a term insurance calculator to gauge the estimated monthly premium that you will earn on your coverage.
Are you looking for extra life coverage?
Term insurance allows you to include riders that give an additional assurance if there is an occurrence of death due to catastrophes and gain coverage in case of other factors such as critical illness or disability. For example, if you are diagnosed with a life-threatening disease, and you had added a rider, then you can avail the advantage of the critical illness rider without paying any additional amount for your treatment. The riders extend and enhance the benefits of term life insurance coverage. Henceforth, adding a rider in a term plan is undoubtedly quite useful.
Whether you require a term insurance plan or not, entirely depends on your perspective. But before deciding on that bit, you should always take into consideration your needs and future obligations of your family. You can do this by creating a note of your requirements along with the advantages and disadvantages of term insurance. Compare the different term insurance plans in India available to users and make an informed decision.