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Why you must add term insurance to your portfolio

Your investments portfolio is incomplete without the protection that the term insurance plan provides. This article explains why term insurance is important for you.

It is said that the only thing that can be said with any certainty, it is that life is completely uncertain!

This is true in many ways. You may have experienced it before – just when you feel that everything is coasting along smoothly, something happens to change the balance of things. Whether your love life or your professional life, things have a way of unexpectedly changing just when you feel confident that you have it made. Sometimes, unexpected tragedies occur and take your breath away. You are left to grapple with your changed circumstances in the best way possible, but your world has changed forever.

The same is true of your financial life. Today, you are there to provide financial support to your loved ones’ dreams. But if you are not present in the future, what happens to their goals? How will the household be run? Who will pay for unexpected emergencies? There are no clear answers to these questions right away. Instead of worrying yourself over finding these answers, you could sign up for a term insurance plan – it’s the simple solution to all your questions.

Why take term insurance?

A term insurance plan is a life insurance product which is designed to safeguard the financial lives of the policy holder’s loved ones. It is a way for the policy holder to protect their families in the absence of their regular income. The policy corpus takes care of the family’s every need in the future[1].

  • The two features of term insurance plans in India are the low premium and the high sum assured. These twin benefits make the policy an attractive buy. You can use a term insurance premium calculator to compute the yearly premium payment vis-à-vis the desired sum assured amount. The best term plans in India offer premiums costing less than Rs 20 per day, at sum assured amounts of Rs 1 crore or more[2].
  • Term insurance plans are normally taken by those who want a long and high life coverage without the additional baggage of expensive premiums. Hence, if you are young and do not wish to invest in an expensive policy, you can take a term plan.
  • Term plans are a good supportive policy also when you have company-sponsored insurance. The insurance your company provides will have a low sum assured, so you can supplement that cover with term insurance.

How do term insurance plans help[3]?

The best term plans are those that help your loved ones…

…Maintain the same standard of living that they are accustomed to, despite your absence and the loss of your income.

…Helps your family meet monthly household expenses, pay for children’s education and upkeep, pay spousal support, medical costs, etc.

…Repay liabilities such as unpaid debts that you may have taken. After your unfortunate demise, creditors will come calling for their money and the family might face acute embarrassment and harassment at this time. However, the term insurance corpus can easily repay these loans so that your loved ones are not in any financial jeopardy.

…Help create a future savings corpus for the household, till the family rallies round and finds an alternative source of regular income.

…You can pay the yearly premium online quite easily. Even the term insurance plan may be purchased online without signing any paperwork. However, the insurance provider might insist on you taking a medical test to complete the purchase process. Do remember that most insurers price the premiums lower when the policy is bought online and when the policy holder is young and a non-smoker.

Buy term insurance today[4]

Better late than never, if you haven’t already purchased a term plan. Do your research about the best options in term insurance plans in India, taking care to assess your family’s future needs. Fine tune your search using a term insurance premium calculator to find out how much the premium payments would be. Also look for plans with flexible pay-out options where you can choose the pay-out frequency for your family.

[1]https://www.morningstar.in/posts/39507/term.aspx

[2]https://www.avivaindia.com/term-plan/aviva-iterm-smart

[3]https://www.mintwise.com/blog/term-insurance-benefits-importance-india/

[4]https://www.policybazaar.com/life-insurance/term-insurance/

About Jaylan Mark

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