Is term insurance the need of the hour?

Anne E. Evans
Having Health and Term Insurance As Soon As Possible Is the Need ...

Emergencies, by design, are unexpected and disruptive, and can severely impact your life financially and emotionally. Ensuring all aspects of security in your life is essential to help you tackle unforeseen situations. In today’s times, financial security is the need of the hour.

What is a term insurance plan?

This plan essentially offers life cover for a certain specified number of years. Its premiums are determined based on the age of the insured and the policy cover size, among other factors. These premiums are usually lower as compared to several other life insurance products in the market. 

Furthermore, term insurance can be used as an income protection tool. It ensures that if something unforeseen were to happen to you, your family’s cash flow would not be compromised.

The need of the hour

Here are some situations that illustrate why a plan that offers life cover for a specific term is now more important than ever:

Employment uncertainty

The probability of losing jobs can increase without warning. After a layoff, it may take several months for employees to get a new job that offers similar compensation. Temporary unemployment can also happen due to calamities or global situations such as the current COVID-19 pandemic. 

If you’re the sole bread earner of the family and if something unfortunate were to happen to you while you were unemployed, your savings could fall short of meeting your loved ones’ needs. To ensure that your family is financially protected against outstanding dues or other financial payments, you need to have a solution that promises overall protection. A term insurance plan can help secure your family’s financial future in case of an unfortunate event. 

Marriage expenses

Life is full of uncertainties. If a financial or emotional setback affects you or your spouse, you wouldn’t want a situation where financial worries become a long-term problem. You can prevent this by purchasing a policy while you’re still young. The premium of a term insurance plan remains fixed throughout the year. Therefore, after marriage, your premium would remain the same. Additionally, you can update your insurance portfolio after marriage and make your spouse the nominee. In the event of your untimely demise, your loved ones can meet liabilities and expenses without affecting their personal goals.

Retirement needs

With time, medical costs, and daily expenses tend to go up. During your retirement years, if you have a family which is monetarily reliant on you, it is crucial to consider a plan offering term plan. The plan would ensure that the policyholder’s spouse or children continue to experience the same standard of living. Without the benefits of an insurance plan in the long run, you could become prone to financial difficulties. The coverage offered by a term insurance plan can ensure proper assistance to the policyholders.

Insurance and your certainties

The ongoing COVID-19 pandemic has accelerated awareness about insurance. However, many often delay their decision to buy insurance. Protecting the more ‘certain things’ in your life, such as – getting married, having children or entering retirement, shouldn’t be taken lightly. Covering your life’s certainties should be made a priority.

Choosing the best plan

To help you choose the best term insurance plan, here are a few tips:

Tip 1: Think about the stage of your life and the number of family members when determining the cover amount

Tip 2: Think about the amount of funds your family will need to maintain their lifestyle

Tip 3: Ensure the cover amount is determined based on your family’s needs and not just your income

Tip 4: Add any liabilities you may have (such as loans) while calculating the Cover Amount 

Tip 5: Favour a higher claim settlement ratio

Tip 6: Know which riders to choose to maximize your coverage

Tip 7: Use a term insurance plan calculator to get an estimate of how much you would have to pay

Don’t let your certainties in life get shadowed by the uncertainties that can strike anytime. Buy a plan today and get insured for a specific period.

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