Every life insurance company in India is offering term plans for its customers. IRDA has done a good job at regulating the insurance providers which makes all of them safe and also helps the insurance seekers to get policies at competitive rate.However, there are people who have this notion that the term plan is not very beneficial as it does not offer any maturity benefit. For them, term insurance plans are a waste of their money as these plans don’t yield any returns. Furthermore, people also think that as they already have planned their family’s finances, they don’t need to invest in any term plan. All in all, these thoughts make peoplerefrain from purchasing term plans.
What is a Term Insurance Plan?
Term insurance plans are most basic of all the life insurance plans. They arebasically no-frills plans that offer high life coverageat very reasonable premium rates. The only shortcoming they have is they don’t offer anything back to you if you have outlived till the end of the life cover period (the term/tenure of the plan).There are agents & sales persons promote other life insurance policies using this feature (shortcoming)of term plan to lurecustomers to buy other high premium policies. However, what customers fail to recognize that term plans are able to offer comparatively highercovers exactly because of this feature/shortcoming.As term insurance plans are the most basic plans, most of the other policies are built around term plans or have these plans as a part of them. The more the features are there in a life insurance policy, the more would be it premium. To avoid this steep rise in premium amount, you should be well versed with the benefits a term plan can offer. Contrary to thesebiased notions, term insurance plans are an absolute requirement. The financial security which these plans can provide cannot be found in any other type of life insurance policy.If you are also one of the believers of the aforementioned notions, ask yourself these following questions. Find out if you or your family can afford you not investing in a term plan –
Would your spouse and children be able to meet their financial liabilities if you’re not around anymore?
Normally, couples set their financial goals together andalso work together to achieve those goals. However, if yours is a single income family, your spouse would be completely dependent on your income to meet the routine expenses and plan for their future goals.
In case of your sudden or early demise, your spouse would suffer from tremendous financial and emotional loss. Even if, in your case both you and your spouse are working, the chances are that your spouse won’t be able to cover or supplement the income loss occurred due to your premature death. You should, therefore, do a proper planning and calculation to understand whether your partner has sufficient financial resources to supplementthe lost income or not. Investing in best term insurance plans can easily help you avoid such a situation.
Have you made enough investments to meet the increasing lifestyle expenses of your family inyour absence?
Most of the people feel that they’vemade enough investments to take care of their family’s financial expenses. If you are also one of those many, it’s time you shouldre-assess your investments. As inflation is at a steep rise, it’s important to check if your investments are sufficient to meet your family’s expenses in the coming years. Again, term insurance can help you take care of that.
How wouldyour family manage routine and lifestyle expenses in your absence?
These days, people are more aware of their finances and financial responsibilities than ever. People make regular investments to create emergency funds to manage their family’s future financial needs. But, are these investments enough to cover for their family’s expense in case of their sudden deaths given that the inflation rate is at a steep rise?You can easily avoid this worry of yours by investing in a term plan.
Would your family be able to take care of your pending loan amount if you are not around?
Easy access to personal loans and credit cards these days have made it easier for people to get money on credit. Have you ever wondered who would take care of your unpaid loans when you won’t be around? Wouldn’t this burden fall on your loved ones? If it happens, your family can use your investments’ payoffto pay off those loans.Investing in term insurance plans can come in handyin such scenarios and will help your loved ones meet their lifestyle needs.
Will your kids be able to complete their higher education without any hindrance in case of your sudden death?
All parents want their children to complete their education without any hindrance and get a stable career to get a secure future. Ensuring so is going to require funds. This is the reason thatpeople make it their priority to build a sufficient corpus for their kids’ future education. But, what would happen if your investments are cut short due to your sudden demise? Would your investment till date be sufficient to pay for your kids’ higher education?if not, term insurance can help you take care of this concern of yours, too.
Conclusion:
All in all, term insurance plans are a common solution to all the aforementioned problems. By providing life cover at considerably low premium rates, these plans allow you to get a significant sum assured. Hence, buying a term plan is vital and should form a significant part of your financial portfolio.