In the wake of changing lifestyle patterns, increasing inflation, and shift to nuclear families financial planning assumes vital importance. It’s a dynamic process including elements of wealth creation, insurance, and planning for life’s milestones. But today, with individuals having numerous financing options to choose from, it is observed that people tend to focus more on the ‘wealth creation’ part, and the ‘insurance’ element often gets neglected.
However, it’s paramount for individuals to first adequately insure their life for the financial security of their dependents and then proceed to address other aspects of financial planning. A term policy is one of the essential elements of any sound financial plan, and the sooner you buy it, the better it is. Here’s why:
- Comprehensive Life Cover at An Affordable Premium
While everyone prays and wishes for a smooth life, one cannot ignore the fact that risks are a part of life and disasters can strike any moment. Term insurance cushions your loved ones from financial risks arising out of life’s uncertainties as it provides a substantial life coverage at an affordable premium. A term policy, thus, ensures financial independence of your dependents even in your absence.
For instance, a 30-year-old male (non-smoker) can buy a term policy with a sum assured of Rs. 1 crore for a little over Rs 750 per month for a 30-year term. This works out to Rs. 25 a day, which is lower than the price of one cup of coffee!
- Income Benefit Through Monthly Payout
We always strive to provide a better standard of living for our family. But, have you ever thought about what will happen to your dependents in your absence? Will they be able to maintain the same standard of living? In such a scenario, a significant term cover ensures that your loved ones maintain the same standard of living that they currently enjoy. Term insurance is an ideal instrument to accomplish this goal.
A term policy offers different options to receive the payouts such as lump sum payout or monthly payouts for a stipulated number of years till your dependents turn out to be financially independent. The monthly payouts enable your family to deal with their day-to-day expenses.
- Maximized Protection with Cost-Effective Riders
Riders are a smart way of enhancing your term cover (at a nominal rate) to suit your specific needs. Here are some common riders available:
- Accidental Benefit Rider
- Critical Illness Rider
- Waiver of Premium Rider
These riders help you cover specific additional risks that might not be offered under your standard term policy. Thus, by increasing the sphere of benefits, these riders bring additional peace of mind, and thereby an increased coverage amount to help your loved one’s tide through the tough times.
- Peace of Mind Worth Celebrating
The greatest return one can anticipate from a term policy is the ‘Peace of mind’. Unfortunately, some of us fail to acknowledge this fact. However, understand that monetary returns are not the only form of returns.
Having a term policy in place offers you the peace of mind knowing that your dear ones will have the financial cushion to fall back on when you are not around. Further, it makes sure that they are not burdened with the responsibility of sorting out your finances or paying off your debts during vulnerable times.
Concluding,
Term insurance is one of the pillars of your personal finance which deserves consideration by every household. So, no more living your present in fear of what the future beholds. Instead, face life’s uncertainty armed with the right tool like term insurance
