Buying a life insurance policy is a critical financial decision. It helps you secure your family’s financial future. While there are different types of life insurance policies in India, term insurance remains the most popular as it provides high coverage at an affordable premium.
As the name suggests, a term insurance policy provides coverage only for a specific term. While buying term insurance plans, the insurance companies give you the flexibility to choose the policy duration as per your needs, and it can range from 5 to 40 years or longer.
Generally, when buying a term plan, the insurer may ask you to undergo a medical examination to assess the risk they may take in offering you coverage. Based on the results, they decide on the premium. If you have any pre-existing condition, you may have to pay a higher premium than others.
Let us look at the benefits of a term insurance policy and how it acts as a financial safety net for your family.
Term insurance plans secure your family’s financial future through death benefit payments. In the event of your unfortunate demise during the policy period, the insurer will pay the sum assured to the nominee. They can use the amount to take care of their everyday expenses and be financially independent.
Generally, term insurance plans offer high coverage. The sum assured is usually ten times the premium you pay for the policy. This amount can help the family member repay the loans you may have taken after you are gone.
Imagine a situation where your family members are forced to repay the debts you have taken. This would put them under immense financial hardship. However, you can save your family from facing such a situation by purchasing a term life insurance policy. They can use the payout from the policy to repay the loans and live a stress-free and debt-free life.
Coverage against illnesses and other risks
When you buy a term insurance policy, the insurers allow you to extend the scope of the standard policy through riders or add-ons. Riders are additional coverage options that you can buy voluntarily by paying extra premiums and get protection against specific risks to which you may be susceptible.
For example, suppose your family has a history of critical illness. In that case, you can purchase a critical illness rider, or if you work in a high-risk environment, you can buy an accidental death benefit rider. These riders will help your family get additional compensation over and above the regular sum assured. Thus, riders help you give your family an extra financial cushion.
Increase the coverage amount
Over the years, term insurance has evolved significantly, and insurers offer different plans with unique features and benefits. One such plan is the increasing term plan. As the name suggests, in this plan, you can increase the coverage amount periodically as you progress and have additional responsibilities.
Thus, by increasing the coverage, you can give your family appropriate financial coverage to suit your needs and ensure they never face financial hardship in your absence.
Thus, a term insurance policy helps you secure your family’s financial future in every sense. So, make sure you purchase a robust term insurance plan with high coverage and have peace of mind knowing that your family can live a happy life if something unfortunate happens to you.