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What Makes Term Insurance Purchase a Crucial Part of Financial Planning?


What Makes Term Insurance Purchase a Crucial Part of Financial Planning?
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The number of Coronavirus cases and uncertainties are rising day by day. More people across the world have slowly started to think about financial planning and having a life insurance cover. There has been a surge in the popularity of a life insurance cover. People settled with families are the ones who are looking more for a life insurance cover.

Considering the necessity for life cover and economic slowdown, many insurance providers offer term life insurance plans that cater to individuals' different needs. Let us find out more about term life insurance plans.

Term insurance meaning 

People often get mistaken with the term insurance meaning as the standard life insurance policy. But the fact is term insurance is the simplest and easiest form of all life insurance policies that provides death benefits to the beneficiary when the insured passes away during the tenure of the plan.

A term insurance plan in India offers many benefits. Here's why you need to have a financial discipline of regular investment in a term life insurance plan:

  1. Financial stability
  2. Financial security
  3. Future planning
  4. Expense manager
  5. Tax benefits
  6. Peace of mind
  7. Flexible payments
  8. Personalized riders

Financial stability

One of the fundamental reasons why investing in a term life insurance plan in India has been widely popular is that it provides financial strength. The death of the earning member of the family can toss a family upside down. In that case, managing household expenses and taking care of the family's basic needs become more difficult. Buying term insurance provides complete sum assured at the time of death, making the dependent's life more comfortable and financially stable.

 Financial security

Every earning member of the family will have some responsibilities and obligations towards meeting their family's needs. You might have bought a car or a new home on EMIs. Sudden death can put the burden of all your debts and expenses onto your loved ones’ shoulders.

Meanwhile, term insurance can plan your future accordingly and provide financial security. In the event of your death, the insurance benefits will be provided to your family, ensuring that the children receive a good quality education and have adequate funds for various significant events in life.

Future planning

 You never know what happens tomorrow. Many individuals meet with accidents where it is not their fault, but unfortunately, they die.

It is good to see life quotes about living in the present. But it is not practical to not think about the future and save for your family. A term insurance purchase plays a crucial part in the financial planning of the future. Whether it is for your daughter's wedding or your child's higher education, you can make their dreams come true by investing in a term insurance plan in India at the right age.

Expense management for Family

In case you are the breadwinner in the family, a term insurance plan will take care of your family's expenses in your absence. With the insurance benefits, they can repay any unpaid loan that is left behind rather than loading the burden. Besides, they will find it easier to adjust to the new lifestyle without facing any monetary burden.

Tax benefits

Everyone looks for options to save money on tax. Thanks to the term life insurance plan, the premium paid towards a term plan can be deducted from the taxable income to provide tax benefits U/S 80C of the Income Tax Act.

Peace of mind

 With a term plan bought in place, your loved ones will be financially secure in your absence. You can plan for the source of this happiness in life by buying a term life insurance early in life. This will also have a good impact on the quality of your life.

Flexible payments

 You choose how you want to pay the premium of a term life insurance plan, whether every month, half-yearly or as per your cash flow. For instance, you can choose single-premium term life insurance plans and pay the entire premium at one go. It also eliminates the issues of missed payments and policy lapse.

Personalized riders

Term insurance only provides life coverage to the insured. Alongside, there are additional riders that increase the benefits of the term life insurance plan at a nominal cost. Such add-ons protect your family against various uncertainties and include the following:

  • Critical illness coverage - On being diagnosed with a covered critical illness, the insurance company will offer a lumpsum payout. This includes a fund for your expensive treatments.
  • Accidental death benefit – If you meet with a severe accident, you and your family will receive extra payouts over the base sum assured.
  • Accidental disability – this rider assures you a sum if you become disabled by accident. The payout option comes in options – in lump sum amount, monthly income for a fixed period.

Bottom-line:

Whether you are having a high-profile job or an average normal job, saving a part of your earnings to buy a term life insurance plan can assure you that your family will remain financially stable and secure. If you want to offer a perfect gift to your family, consider buying a term insurance plan right away.

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