Term plans are a great solution to secure your family’s financial future. They need not grapple with money troubles even in your absence, and with the loss of your income.
It is said that nothing in life is constant except change. But though each of us knows this, not many of us are able to fully grasp its implications. Or rather, we are too complacent about our own lives. When we hear of misfortune befalling others, we feel sorry for them but it never occurs to us that the same can happen to us as well. It is only when life changes in the blink of an eye that we realise how fragile our existence really is.
But that is not to say that you must go through life constantly looking over your shoulder. Life is too short and too beautiful to be wasted in morbid thoughts. But at the same time, you also need to spare a thought for the possibility that something terrible might happen to you in the future and snatch you away from your loved ones. What happens when you are absent and your income abruptly stops? Is your family in a position to fend for itself without the support of your income?
More to the point, what steps are you taking to ensure that your family is not left to the vagaries of fate, but is able to take care of itself despite your absence?
The answer lies in taking a term insurance plan.
What is term insurance?
A term insurance plan is a life insurance product. Its benefits are extended to the family members of the policy holder, in the event that the latter unfortunately passes away while the plan is still active. Normally, the plan does not pay back any of the invested premiums if the policy holder survives the plan tenure. However, leading insurers in India do offer varied term plans where the paid premiums may be returned if the policy holder survives the plan tenure.
Whether the plan pays maturity benefits or whether the premiums are returned or not, the major benefit of term insurance is that the premiums are quite affordable while the sum assured is quite high. In fact, the sum assured on the term plan is amongst the highest across all insurance products in India at the moment. This is why investing in a term insurance plan is an attractive idea – you get valuable life coverage without upsetting your other financial goals or your annual budget. For a small price, you can ensure that your loved ones are adequately protected to carry out all their dreams as per plan. Your children can take the education of their choice, your spouse can maintain the house comfortably, and there can be enough money left over for the family to live on till it finds an alternate source of income – all with the term insurance corpus that you create today.
Thus, the term insurance plan can help your family live the way they live at the moment – in the future, they will only have to deal with the emotional loss of your absence, but not with financial uncertainty.
How to buy a term insurance policy
You can buy the best term insurance plans online, after perusing suitable plans on different insurers’ websites. Many policy aggregator sites also list the best term policies for the year, along with a list of their benefits and recommendations. You can take suggestions also from experienced insurance providers on the best term plans to buy.
When you wish to buy a term plan, this is what you need to do:
- Study the plan features in detail. Every leading insurer lists the term plan features and benefits for your consideration. Compare your shortlisted policies before proceeding further.
- Look for the insurer’s online term insurance premium calculator. The term insurance premium calculator is a tool that helps you compute how much annual premium you need to pay get the desired sum assured. You can manipulate these figures till you arrive at a desirable figure, i.e. you can adjust the premium payments if you feel they are too high or if you can afford to pay more.
- Check the term insurance plan application process. Most insurers allow the term plan to be purchased online, sometimes without a medical test. However, others will insist on a medical test at an empanelled hospital or clinic before making the purchase final.
- Also check the insurer’s system of reminders for premium payments every year. Ideally, you should receive alerts on SMS and email at least one month before the premium due date. Do find out what happens if you inadvertently do not pay the next premium even after the grace period is over.
- Nominate your immediate family members as the plan beneficiaries, as instructed. Some insurers only allow one name, i.e. the spouse or surviving parent or surviving child.