The concern of well-being of our families is what motivates us for the daily life struggle. Every day, year after year we try to accumulate as much savings as we can so that our near ones can sustain themselves in our absence. However, taking in account the current inflation rate we all know that our savings might fall short in the near future. For people with such concerns, term insurance could be the perfect solution.
What is term insurance?
Term insurance is a financial instrument provided by insurance companies. It keeps your family financially secure for a specific period of time. There are two major benefits of buying a term plan,i.e.lowest premium, in a term policy,you have the freedom to choose the amount for sum assured while paying a relatively low premium.
It is one of the low priced insurance plans in the Indian market. High sum assured, in term insurance,there are no limits on choosing the sum assured. Which means you can avail a policy from INR 5 lakhs to INR 5 crores.However, it is important to consider your family’s lifestyle before selecting sum assured amount.
How long should it last?
Buying a term insurance policy is not rocket science, you just need to consult an insurance agent, sign the necessary documents, pay the initiation amount and you are good to go. Even though it sounds easy, when finalizing a term insurance policy, people often get confused. The two important questions, i.e.how much coverage to buy and what should be the duration of the policy can really put a person in a dire dilemma.
However, the answer to this is quite simple, the term of your insurance plans should be equivalent to the amount of time you would like to cover your financial obligations. Most commonly the tenure of term insurance starts from 10 to 15 years and can go up to 30 years. Factors like Age, Liabilities and Financial Goals should be considered while buying a term plan. These factors can help you get an estimation of the amount and term you need to avail.
When buying term insurance, it is important to check for accidental death cover as very fewer companies approve of it. In such situation, you can purchase accidental death benefit rider to ensure maximum coverage.