Life sure can be uncertain, and while it is an indisputable fact, some people often worry about their loved ones in their absence. It is essential for every individual, especially if they are the sole earning members or breadwinners of their family, to create financial security for their loved ones.
Having a financial plan in place will not only offer them financial cover in the long run but also give them much-needed peace of mind at present. If you are looking to provide for your family in your absence by cost-effectively mitigating your risks, then a term insurance policy would be your ideal bet.
Why Is Term Insurance A Must-Buy Policy?
There are many ways of securing oneself financially and looking after financial stability for the family, but one of the best ways to do that is by opting for a term insurance plan. If you are wondering why, of all the insurance plans and other instruments is term insurance a must-buy policy, then here are a few reasons:
1. Low Premium
Because term insurance plans don’t have any investment element involved and are straight-up life cover products, the premium amount is comparatively lower. An average earning individual has to contribute a very small amount of their annual income towards their life cover, and the sooner you start this policy, the lesser your premiums.
2. Enjoy Financial Security
It is difficult for one’s spouse, parents, and children to cope with the loss of a loved one and look after financial requirements at the same time. A term insurance policy offers financial security to your loved ones in your absence and makes sure that they don’t get burdened by liabilities.
Be it clearing credit card dues, education, or home loan, or keeping money aside for marriage in the family, the sum assured that your family would receive from this policy will help them meet their financial liabilities at ease.
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3. Lower Claim Rejection Rate
If you have disclosed all your medical and health conditions, lifestyle choices, etc., while opting for the term insurance, then the chances of your family members facing an issue with the claim process are significantly less.
There is also a new rule according to the IRDA wherein no insurance provider is allowed to claim non-disclosure of facts by a policyholder once their policy has been in effect for at least two years. Besides, if you apply at an early age, the rejection chances are even lower as you are in the prime years of your life with good health and fewer or no illness record whatsoever.
4. Higher Flexibility
Buying a term insurance plan is very easy in current times. All you have to do is find the best insurance providers online, run term plan comparison on various quotes and check which plan offers better benefits.
You can simply select a term insurance plan online or offline and do not need to have any other health plan in place to opt for this either. You can also choose to customise your plan to suit your family’s needs and even change certain aspects when you attain certain milestones at different life stages like marriage, having kids, etc.
5. Customise With Riders
Additional riders allow you to customise your term insurance plan as you deem fit, and this comes in very handy when the cover is meant to support an entire family in the policyholder’s absence. There are multiple riders like death due to accident, critical illness rider, permanent or partial disability, or even a waiver of premium rider, which can be easily added to your term insurance plan for a nominal price.
There are many expenses a family must take care of in the absence of a loved one, especially a breadwinner, and it would be a sensible decision to have a term insurance policy in place for them.
Bottom Line: Buy Term Insurance As Early As Possible
Now that you know the basics of what is term insurance and why is it important, you can enjoy by opting for term insurance, but if you opt for it at a young age itself, then it would be one of the best-case scenarios. At a young age, you may have just begun earning, would have fewer responsibilities, and would still be in good shape health-wise. Hence, insurance providers would readily offer you a higher term insurance coverage and more options for premium payment frequency and mode.
Moreover, you can start aligning your tax planning by claiming a tax deduction every year against the insurance premium you pay per the Income Tax Act of 1961. This is an excellent way of planning your finances and getting a head start at an early age itself.
Term insurance plans are not only amongst the most simple life insurance products that are cost-effective but also ideal for policy buyers of any age and income bracket. Take that first step towards securing your family’s future by making provisions for their financial well-being in the present.