What Is Term Life Insurance Plan
Table of Contents
Term life insurance is a pure protection policy.
In the case of the insured person's death during the policy period, the nominee gets the entire term insurance amount (sum assured) at one go. You can get term insurance at an extremely low cost, is easy to understand and you pay the same premium for the entire policy duration.
When Is The Right Time To Buy Term Insurance?
You should endeavour to buy a term insurance plan when you start earning money and have current or potential dependents. For example - you are 21 years old and have just started to work. Money is not really a problem because your parents are still working and can take care of themselves. However in the next 5 years, your parents are set to retire which will make them dependent on your income for sustaining themselves. Such being the case, your untimely death will create major financial complications in the life of your dependent parents and hence it is wise for you to purchase a term life insurance plan within these 5 years.
The need for term insurance is highest when you have the maximum number of dependents when you are in your 30s with a non-working spouse, children and dependent parents. If you have 3 to 4 dependents who look upon your earnings to sustain themselves and you still not have a term life insurance policy, then the time to buy the term insurance plan is now
Why Do I Need Term Insurance?
- To Secure Your Family’s Future
A term insurance policy provides financial security to the family in case of untimely demise of the primary breadwinner. As a rule of thumb, you should get a cover equal to ten to twenty times your annual income. - Lower Premiums
Since there is no investment element in the insured amount, the premium for all term plans are much lower than any other insurance plans - To Protect Assets
For all the goals like house, car, child’s education that you have fulfilled through loans, have them covered through term insurance. Term plans will ensure that these do not become liabilities in your absence. - To Protect Family’s Lifestyles
Ensure that the lifestyle that your family leads is not compromised even in your absence. Some Term plans ensure that there is a monthly income even when you are not around - Life Is Full Of uncertainties
In life everything is uncertain, even the certainties. So why live in fear, instead ensure lifetime confidence with term insurance. - Covid-19 Claims Are Covered
Term insurance covers you against all certainties including various critical illnesses and covid-19
Conclusion
Term insurance is an affordable type of life insurance plan that, upon the demise of the policyholder with the specified term (period) of coverage, promises to pay a specific sum of money (sum assured) to the beneficiary. Term insurance policies are active for a fixed period of time, very easy to understand and offer financial compensation to your dependents so that their financial life can continue to be secure even upon your untimely death.
Also Read: What Is Group Term Life Insurance
