The world we live in is full of uncertainty and chaos. Therefore, it is crucial to provide financial and emotional security to our family and loved ones. There are many investment tools that can help us do that but an emergency fund cannot be replaced. This is why, choosing a term insurance plan can be a wise choice.
But what is term insurance? It is a simplest form of Life Insurance which provides coverage only in case of uncertainty. Hence the premium is also low and pocket friendly.
It is always advisable to purchase a term insurance policy especially if you are the only breadwinner of the family. This plan helps you make sure that all the expenses are covered in case of emergencies.
However, it is important to make sure that you’re opting for the right plan as per you’re your requirements and lifestyle. Here are a few questions that you can ask yourself before buying a term insurance policy to make sure you’re making the right choice.
Plan coverage amount is one of the most crucial factors that you should consider while selecting a policy. This is the amount your nominee receives in case of uncertain situations. The amount should be able to support the regular needs of your family term insurance plan for emergencies or major expenses. The golden rule is that your term plan coverage amount should account for 10 to 15 times your annual income. When a person starts early, they get a number of choices with pocket friendly premiums.
Tenure of a policy is the duration which the policy covers. Generally, you can select a tenure ranging from 1 year to 100 years. It is always good to have the longest tenure. You must also check for the renewal options to avoid losing the policy.
The premium is the amount you pay towards the policy. There are single payment policies as well as regular payment policies.
Policy term can be defined as the number of years you pay the premium towards the policy. When the term is long you can expect a high sum assured with a pocket friendly premium. So, you must always look for long term plans instead of short term. Most of the policies also provide Income Tax deductions according to Income Tax Act. However, tax laws are subject to change.
When you’re young, you do not have too many responsibilities. This is why, purchasing term insurance at this stage can help you get good coverage and other benefits at lower premium costs.
Married life is full of responsibilities towards your spouse and family. Hence it is important to secure them financially.
Becoming a parent is one of the most beautiful experiences you can have in your life. The bundle of joy also comes with great responsibilities. So, parents should be well prepared to take care of their little one’s finances. These plans can help in this by providing financial aid for their education, marriage and other major events, even in the absence of the life assured.
*Tax benefits are as per the Income Tax Act, 1961, and are subject to any amendments made thereto from time to time
The article is meant to be general and informative in nature and should not be construed as solicitation material. Please read the related product brochures for exclusions, terms and conditions, warranties, etc. carefully before concluding a sale.
Make responsible financial decisions. Consult with your financial advisor before making any decisions on insurance purchase.
