7 Things Your Chosen Term Plan Must Cover

Term insurance can act as a foundation stone for your financial portfolio. It can secure the economic future of your loved ones. It provides the much-needed financial security to your family in case of any uncertain eventualities. Read on to know more about what is term insurance plan.

Term insurance a simple type of life insurance policy that offers life protection to the policyholder against the risk of death for a specific duration. Term insurance in India does not have any investment component or maturity benefits if the policyholder outlives the policy tenure.

It is necessary to invest in a term insurance plan, as life is unpredictable. While searching for a suitable policy, you can use a term insurance calculator to compare various aspects, like the sum assured and premiums of different plans. Doing this will help you to find a plan that best suits your needs. Here are seven things that you need to check for while buying a term plan.

As a term plan does not have any survival benefit, it comes at a cost-effective premium. So, anyone can purchase it based on his or her budget. For example, if a person in his 30s is looking for a term plan with a sum assured of INR 1.25 crore, and is a smoker, then he will have to pay approximately INR 10,000 a year as a premium.

  • Sufficient monetary supportfor your dependents

Along with an economical premium, a term plan offers a large sum assured. The high sum assured can ensure the monetary stability of your loved ones in case of your untimely absence. It acts as an income replacement tool to help your family members lead a financially independent life and maintain their lifestyle.

  • Peace of mind

You work hard to take care of your family’s requirements. However, have you thought about how will they fulfill their needs when you are not there to provide for them? So, you need to select the sum assured considering the amount that will help your family to lead a financially stress-free life. By doing this, you can live peacefully, as you know that the future of your loved ones is secure when you are not there for them.

  • Substantial sum for the future generation

There are term insurance plans that provide life cover for your entire life, which is until the age of 99. So, if an unfortunate incident occurs due to a natural cause, you will be able to leave an enormous tax-free death benefit value for your successors.

  • Limited pay feature

If you are considering a term plan with a whole life facility, you can opt for a limited pay offering, wherein you can pay all your premiums within a stipulated timeframe. You can pay the premiums until your retirement age and stay insured until you are alive.

  • Financial security of your spouse

The untimely death of the sole bread-winner of the family can put the family into financial hardships. So, to ensure the economic well-being of your spouse along with other family members, you can invest in a joint term plan. Here, both husband and wife are the policyholders. In case of the death of one spouse, the surviving spouse gets the death benefit from the insurer. Similarly, when the second policyholder passes away, the children get the sum assured from the insurer.

  • Possibility to upgrade the life cover

The financial milestones of life can change over time. For instance, your responsibilities will increase after getting married, having a child, while funding the child’s education, and buying a new home. Therefore, it becomes essential to align your policy’s sum assured as per the changing life situations. You can also consider adding appropriate riders.

The purpose of investing in term insurance in India is to provide enough money to your family when you are not to look after them. Utilize a term insurance calculator to see the offers of various insurance companies. This online tool will help you in getting a good deal. With it, you can avail of an ideal plan as per your monetary needs.

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