Term Insurance is a comprehensive protection plan and the simplest form of life insurance cover. It is a fixed-term contract between the policyholder and the insurance company, under which the insured pay premiums regularly against a fixed life coverage amount. In return, the insurance provider consents to pay the sum assured amount to the nominees of the policy in case of the policyholder’s demise within the policy tenure.
Do you really need a term life insurance or not? Ask yourself
Including a term life insurance is a significant step in your financial planning; because it takes care of your family’s financial security in your absence and gives you some good saving options like tax benefit. The coverage amount of your insurance that your family receive helps them to keep up their way of life and deal with various liabilities like home loan, car loan etc.
In addition, term plans can also be extended to incorporate various riders like critical illness rider, disability, and death due to accident rider. If you are still not sure whether you need a term insurance plan or not, read through the below mentions pointers.
In case you are the sole breadwinner of your family.
If your answer is yes, then you should think about buying a term life insurance. For the simple reason being if in any case, you are no longer with your family, then what will happen to them financially? As the only earning member, all the present family costs and your family’s future objectives are reliant on your capacity of earning. In case of your untimely death, the income would get hampered, resulting in a difficult circumstance for your family. Here, the coverage amount will help them sustain their regular lifestyle. Term insurance offers various options for payouts that you can choose as per your requirement. You can either settle with a lumpsum payout option, monthly or partial payout depending on your need to help your family manage their expenses in your absence.
In case you have any debts or liabilities.
A term life insurance is beneficial if you have any loans or any other liabilities. For instance, if you have availed a loan of Rs 30 lakh and a sudden mishap happens, then how your family will keep on paying the EMIs? In this kind of situation, a term plan plays a crucial role. For instance, if you have taken term insurance worth Rs 1 crore, then with the coverage amount, your family can easily pay off the loans. And with the rest of the money, they can continue their existing lifestyle.
In case you are looking for a high life cover at a low premium
Term Insurance is perhaps the only life insurance that offers high life coverage at considerably low premiums. For example, a 25-year old working person can find a Rs 2 crore term plan for just Rs. 28/day*. A life insurance coverage like this can protect your dependents for simply under Rs 28 per day. In case of your untimely death, your dependents will get Rs 2 Crore lump sum amount which will help facilitate their financial burden.
Are you looking for an enhanced life coverage?
Term life insurance permits you to include riders that give an extra assurance if there is an occurrence of death due to mishaps and further coverage in case of other factors like disability or critical illnesses. For example, if you get diagnosed with a critical disease, and you have added a rider for the same, then you can avail the benefit of the critical illness rider without spending any extra amount for your treatment. The riders enhance and extend the benefits of term insurance coverage. Hence, adding a rider in a term plan is undoubtedly useful.
Whether you require a term life insurance or not, it entirely depends on your perspective. But while deciding on that bit, you should always consider your needs and future obligations. You can do this by making a note of your requirements along with the advantages and disadvantages of term life insurance. Compare them, and then you should make the decision. To know more about term insurance, you may visit BimaKaro.in and get personalised quotes for various term plans from top insurers.
Source: https://bimakaro.in/ik/term-life-insurance/do-you-really-need-a-term-life-insurance-or-not-ask-yourself-456