Term Insurance: Because life comes with highs and lows

The simplest life insurance policy is also the most beneficial in many aspects. Taking term insurance helps you protect your family’s interests even in your absence.

As try as one might, it is never possible to completely crack the code of life. Where there is happiness, there is also agony. Where there is a period of wealth, there is also a period of penury. Every bad phase is followed by a bad one – and it seems that on the stage of life, we are truly puppets dangling on the strings of fate!

This realization can make one feel really helpless – after all, it is daunting to realize that one has such little control over future events. One might never know what the next moment will bring, and so, one is never prepared to meet its implications head on. This is what makes life exciting and challenging by turns, not knowing what to expect but still combating its good and bad effects!

But while you may be confident of meeting all of the life’s challenges head on, how true is the same of your loved ones? What happens if you are absent from their lives, and they are left to grapple with much more than the grief of your loss? You might leave behind debts, property loans, fewer savings and unhelpful investments. Life will certainly go on for your loved ones – but how, if there is less money at hand? There will be umpteen expenses even in your absence, and the living costs will be higher in the future as well. It is a grim possibility, indeed.

Don’t let this be your story – take proactive steps today to ensure that your family is protected against an uncertain financial future. Ideally, your family should be so well cared for as to be able to continue to live with the same standard that it is accustomed to. But if you are thinking that you can create adequate savings for the future, think again. It may take years and years to build a sufficiently large savings corpus that takes care of all your family’s future needs, and still leave some money aside to pay for daily expenses.

The solution you must opt is much simpler. Just take a term insurance plan.

The term insurance solution

It is inconceivable that one would live without insurance in today’s world. In this day and age, there exist people who sincerely believe that investing in insurance is unnecessary and that their income, savings, and investments can pay for their family’s future needs. On the contrary, one needs to invest in health, vehicle, life and even home insurance to safeguard future needs.

A responsible family-oriented person such as yourself realizes the importance of protecting your loved ones from any vagaries of fate. And so, you are probably interested in knowing more about term insurance and whether it suits your future needs.

The point is: term insurance suits everybody. It is one of the most affordable life insurance products in India today. Though it has an affordable annual premium payable, it provides some of the highest sums assured amounts across the insurance spectrum in India today.

But there are some reasons why many people looking to buy life insurance opt out of buying term insurance, such as:

  • It is a pure life insurance plan. There is no maturity benefit in the plan.
  • If the policy holder survives the plan tenure, the plan is terminated at that point. None of the premiums paid towards the plan are paid back to the policyholder.

Life insurance plans that return the premiums paid and also pay a bonus to the policyholder are known as ‘endowment plans’ or ‘savings plans’. Many people opt for these plans because of the prospect of gaining capital gains on the vested sum. But against this backdrop, it is pertinent to note why term insurance is a far superior insurance solution for the future:

1 The sum assured is quite high. Your family’s future needs include paying for children’s education, their wedding, spousal support, house maintenance, repaying unpaid loans, money for emergency medical expenses, etc. All of these are high costs indeed, and inflation is also a factor to consider. The high sum assured of the term plan can easily finance these expense heads and allow your family to lead the lifestyle they are accustomed to.

2 It is extremely affordable.Term insurance is an excellent solution for those who want to combine high returns with low premiums. Those with relatively low income, or those with many expenses to contend with, can easily afford to buy term plans and get high coverage at low premiums.

3 It is flexible. It is never recommended that one should discontinue an insurance plan mid-way. If you discontinue an endowment policy mid-way, you will not receive the benefits you are due if you had taken the policy to term. You must pay a surrender benefit when terminating the plan. But a term policy is more flexible in this regard. The policy is ceased when you stop paying the premiums.

4 They are priced almost the same across insurers. Term plans follow a similar structure and are priced almost the same across insurance companies. Hence, it is easy to compare different term plans before buying them. You can also purchase term plans online since many insurance providers do not insist on a medical exam before completing the purchase process.

5 New products have been customized to suit many needs. Term plans are constantly evolving, and the best banks and insurance companies have improved the simple term policy into one that offers a degree of customization. Hence, plan holders can choose between different pay-out options, or lower premiums for women and non-smokers, and also payout frequency.

6 Term plans offer tax benefits. A big benefit of buying insurance plans is that they offer annual tax benefits. In the case of term plans, the premium payable is tax exempted under Sec 80C of the Income Tax Act, 1961.

Featured Image Credits: CNCD