Ch. 3: Why Should You Buy Term Plan?

The world we live in today is full of uncertainties, making term insurance more important than ever. If there is anything we have learned in these two years of pandemic, it is to not take your health for granted. Term insurance ensures the well- being of your family even when you are not around anymore. Securing your family’s future is of utmost importance, so buying a term plan becomes a crucial decision and must be done carefully.

This is the basic justification for why people select any sort of insurance, and rightfully so. The passing of the provider of the family or any other earning member can turn the life of the remaining family members upside down. In such a circumstance, overseeing family costs, and dealing with the fundamental necessities of the family turn into an incredibly troublesome task. Term life insurance provides a sum assured at the hour of death and can make the life of the remaining family members easier, albeit monetarily.

It is important to understand who your financial dependents are, and what kind of dependencies there are - so that you are able to plan your term insurance accordingly to fit their needs.

As a part of calculating the right amount of term insurance cover to buy, you begin with a list of your financial dependents and understanding their short-term and long-term monetary needs.

• The Living Expenses Fund: The regular expenses they would have - like groceries, bills, rents, school fees etc., that your term insurance will have to pay for.
• The Big Dreams Fund: Their long term dreams and aspirations - like a good foreign education, a big fat destination wedding, yearly travel plans etc.- which will require financial investment.

Every earning member of the family has a few obligations and commitments towards their spouse, children, and parents. A sudden demise will prevent you from meeting those commitments. With term insurance, you can design your future as need be. In case of your passing, the sum from the insurer will guarantee that your dependents will continue with their lifestyle, like getting a well-rounded education and having assets for their marriage. Essentially, with the right term protection plan, your dependents can likewise have a safe and comfortable life without confronting any monetary difficulties.

Pretty much every individual has some or the other loan. It may very well be a home loan, auto loan, education loan, or personal loan. The returns from the insurance take care of your credits along with interest, and guarantee that the weight of these borrowings does not fall upon your loved ones.

Given the large difference in the premium rates, managing the cost of a high coverage under any life insurance plan, aside from term insurance, is difficult. It’s absolutely pertinent to use a systematic method of calculation while figuring out the cover you need - based on your lifestyle, income, needs, and requirements. Only term plans can give you sufficient coverage at the affordable premiums.

Most term insurance plans offer a few extra advantages, known as riders, alongside the death cover to the insured. You can pick riders like accidental coverage, accidental disability benefit, critical illness coverage, income benefit, and so forth at some additional premium cost. These riders guarantee that you get the greatest advantages of life cover without being a spend-all.

Your family needs your love and care. What they also need is financial security. As a provider, it is your responsibility to plan for the worst possible scenario, keeping in mind that you might not be around to fulfil every single one of their dreams, in the short-term as well as long-term. This is why you need a term insurance plan.