In the hustle and bustle of every day, it’s easy to get caught up in the whirlwind of financial decisions. Often, amidst investments and savings, we forget to prioritize a safety net for our family’s future. This is where the term plan steps in, offering a reliable shield against life’s uncertainties.
Join us as we explore the imperatives of this vital component, ensuring you’re equipped to make informed choices on the path to financial security.
What is Term Plan Insurance?
Term insurance provides coverage for a specified “term” or duration. In simple terms, if the insured person passes away during the policy term, the nominee (usually a family member) receives the death benefit.
Why Choose Term Insurance?
Term insurance is often the first choice for the ones who want to ensure financial security for their loved ones in case they’re no longer around. Here’s why it’s a popular choice:
1. Affordability: Term insurance is one of the most cost-effective ways to secure a high coverage amount. You pay a relatively low premium for a substantial sum assured.
2. Financial Protection: The primary purpose of term insurance is to provide financial protection for your family. If something happens to you, your family won’t have to worry about the financial burden of loans, daily expenses, or plans like education and marriage.
3. Flexibility: Term insurance plans come with various options to suit your requirements. You can choose all the policy terms, premium payment frequency, and additional riders to enhance your coverage.
4. Tax Benefits: Under Section 80C and 10(10D) of the Income Tax Act, the premiums paid for term insurance are also valid for tax deductions, making it a smart tax-saving instrument.
Online Term Plans: The Future of Insurance
Nowadays, everything is moving online, and insurance is no exception. Online term plans have gained immense popularity for several reasons. Some of them are below:
1. Convenience: You can explore, compare, and purchase term plans from the comfort of your home. There is no need for lengthy meetings with agents.
2. Lower Premiums: Online term plans are generally cheaper because they eliminate intermediaries and their commissions. You get more coverage for your money.
3. Transparency: All the information you need is just a click away. You can read policy documents, understand terms and conditions, and calculate premiums easily.
4. Quick Processing: The online application process is streamlined, reducing the time it takes to get your policy issued. In many cases, you can get insured within minutes.
Factors to Consider While Choosing a Term Plan
While online term plans offer simplicity and cost savings, it’s crucial to consider various factors when choosing the right plan for you:
1. Coverage Amount: Determine how much coverage your family would need in your absence. Consider existing liabilities, future financial goals, and inflation.
2. Policy Term: Choose a policy term that is in line with your financial responsibilities. Some people opt for coverage until retirement age, while others prefer shorter terms.
3. Premium Payment Frequency: Decide whether you want to pay premiums annually, semi-annually, or monthly. The frequency can affect the total premium amount.
4. Riders: Explore the available riders like critical illness, accidental death, or waiver of premium. These can enhance your coverage but also increase the premium.
5. Claim Settlement Ratio: Check the insurer’s claim settlement ratio to ensure they have a good track record of honouring claims.
6. Online Tools: Utilise online premium calculators and comparison tools to find the best plan that fits your budget and needs.
Term Insurance Myths Debunked
While there is endless information about term insurance, it is vital to know some common myths as well. Let’s debunk some common myths about term insurance:
Myth 1: Term Insurance is Only for the Breadwinner.
Reality: Absolutely not! Term insurance is for anyone who wants to ensure their family’s financial well-being. Even if you don’t contribute financially, your absence can lead to additional expenses.
Myth 2: Term Insurance is a Waste of Money if You Survive the Term
Reality: The purpose of term insurance is financial protection. If you outlive the policy term, it means you and your family are financially secure, which is a win.
Myth 3: You Should Buy Term Insurance Only When You’re Older
Reality: Who said that? The younger you are when you buy term insurance, the lower the premium. It’s wise to start early to secure affordable coverage.
Myth 4: You Don’t Need Term Insurance if You Have Other Investments
Reality: Like less is more? Nope! Investments and insurance serve different purposes. Term insurance provides a safety net, ensuring your family’s immediate financial needs are met.
Term insurance ensures that even in your absence, your family can continue their lives without financial worry. With online term plans offering affordability, convenience, and transparency, there’s no reason not to consider it a crucial part of your financial portfolio.
So, start your financial journey today by exploring the world of term insurance. Assess your needs, compare plans, and choose one that provides coverage that truly matters.
You may also like: Four Types of Insurance Every New Business Needs
Image source: elements.envato.com