We generally try to keep a positive mind-set about life and tend to ignore the negative aspect of it. But that doesn’t mean a worst case scenario will never occur in your life. The future is
unknown and you never know when you will face an emergency. Hence, every individual must be prepared to tackle their life’s worst case scenario. Due some unfortunate event if anything happens to you, your family should remain financially secured even in your absence. That’s
when a term insurance plan comes into picture.
In the recent past, term insurance plans have become popular among other life insurance
policies for various reasons. A term insurance can be bought at a lower premium price that is mostly affordable to almost everyone. The coverage that a term insurance offers in exchange for the monthly premium is comparatively higher. A term insurance promises the policy holder to give his / her family members the financial cushion they deserve even in your absence. Your family members will be able to enjoy the same standard of living without having to make any compromises even after you are gone.
If you are buying a term insurance plan for the first time, here are a few things that might help you make an informed decision.
What is term insurance plan?
A term insurance plan is a life insurance policy where the insurer offers the policyholder an
assured sum till the tenure of the policy if in case anything happens to the policyholder. In
exchange for this coverage, the policyholder is supposed to pay a certain premium to the
insurance company till the end of the tenure of the term plan. If the policyholder survives the term plan, he/she is not eligible for any lump sum benefit.
More on term insurance policy
How much premium an investor has to pay will totally depend on their age and their existing health condition. If you are already having some medical issues, the premium of your term
insurance is bound to increase. If and when the insurance ends and if you survive the term, you will have to buy a new term insurance policy. If you want an affordable term insurance plan, you may have to get one when you are young. Year after year, the term insurance premium keeps on increasing as you grow old. This also means that if you survive the term insurance and get a new term plan, you will inevitably have to pay a higher premium.
If the coverage of your term insurance policy is insufficient, you may have to buy another term plan to compensate for that. Which also means that you will be paying twice the premium. If you invest in a premium-back rider, it will help you get the money back that you paid as a premium, that too, if you survive the policy term.
A term insurance plan is generally meant to last for at least 20 years. So when you are told that you will have to pay a certain amount of premium for that long, make sure that the amount is something that you will be able to afford for many more years to come. So when you are buy term insurance online, make sure that it ticks all the right boxes.
To determine whether the tenure of the term insurance is feasible you may have to review your existing liabilities, the needs of your family members, your own financial needs, etc. Buying a term insurance policy is supposed to help you secure the financial future of your family members in your absence. So make sure that you take an informed investment decision.