Term Insurance is the must-have life insurance – Here is why?

People’s lifestyle habits have changed, whether it is the way they live, manage money, mindset, etc. Today’s generation believes in living in the moment, which is very different from the older generation, who believed in savings for the future. Nonetheless, regardless of how much the perspectives differ with respect to financial life contrast among different generations, one viewpoint that ties them together is the verifiable significance of life coverage.

Will you at any point want your loved ones to be in distressed situations upon your sudden death? Not, particularly, post this pandemic. Therefore, why not fence this danger of life’s vulnerability by taking life coverage? While it’s normal to have an unpleasant feeling about the possibility of death, it’s never OK to overlook how something can happen at any time.

Now, the question comes which type of life insurance should you opt for? The right answer is term insurance due to the simple reason that it offers several benefits that outperform other forms of life insurance policies in multiple ways.

First, let’s know what term insurance is and dive further into why it is the must-have life insurance policy.

What is Term Insurance? 

Like its name recommends, term insurance gives life coverage cover to a particular period, as the policyholder chooses. The essential point of term protection is to cover the chosen people’s financial future in case of the sudden demise of the policyholder during the policy term. Term insurance is the simplest form of life insurance, and a pure protection plan which does not offer any maturity benefit and is aimed at providing substitution of your income to the nominee in your absence, the best part of term insurance is it gives high coverage or sum assured amount at considerably low premiums.

What are the benefits of Term Insurance? 

• Not only does the policyholder pay fixed premiums all through the policy term, but the premiums paid are exceptionally reasonable and most likely the least among different life coverage plans, particularly for the immense cover.
• Relatively easier product to understand, when contrasted with others like endowment, moneyback or ULIP.
• Different variations of term insurance, such as the return of premium plan and increasing life cover, help cater to the policyholders’ different requirements.
• Term insurance policies are available for tax benefits for the premium paid towards policy under Section 80C of the Income Tax Act. Even the death benefit is also exempted from tax.
• Multiple Death Benefit Payout Options are available as lump-sum or staggered payout like a month to month, half-yearly, and so forth.

Not just these term insurance offers several other benefits as well

Regarding term insurance plans, countless misconceptions regularly manifest, such as life cover is only paid out when the policyholder passes away. But term insurance provides more than death benefits. Term plans cover not one but rather three Ds of life-Death, Disease, and Disability. Hence, making it the must-have life insurance that you should have.

• Death: The main component of term insurance is the death benefit that the nominee receives upon the insured’s demise. For the individuals who believe that term insurance is an expense, not an investment, such individuals neglect to comprehend that the innate advantage of such plans is the financial security of the policy nominees. This is particularly significant for the individuals who are sole earners in their families. Since in case of their shocking death, their family’s financial future will be totally imperiled by their abrupt demise. Besides, to siphon in a more significant level of adaptability, a few insurance providers even offer maturity benefits in the form of the return of premium benefit. The insurer returns the premiums paid towards the policy if the policyholder endures the policy term through this advantage.
• Disease (Critical Illness): Term insurance offers enhanced protection for diseases like critical illness. Several term insurance plans are available in the market that provides quick cash payouts upon diagnosis of major critical illnesses, including cancer, stroke, heart attack, or multiple organ failure. Considering that a solitary hospitalization is fit for eradicating your whole life savings, buying a term plan to cover critical illnesses expenses is a smart move. These plans usually have a fixed advantage of lump-sum payout. There are two different ways to purchase critical illness plans, one being as a rider alongside a term insurance plan and the second as a standalone plan offered by many insurers.
• Disability: Generally, many individuals often see term insurance as an excellent way to provide financial security to their family in case of their sudden demise. Yet, some fail to perceive the advantage of disability benefit payout. One can avail of such benefits by availing riders as part of the term insurance plan. Such riders help in replacing monthly income in case of long-lasting disability. Remember that the conditions, just as payout plans, may vary among different insurance providers. The individuals who have not yet bought a term plan should consider buying an accidental disability rider and term insurance to cover this uncertainty.

Who in the family should purchase term insurance, and what amount? 

Ideally, the main earning members of the family should purchase the term insurance to financially secure their family’s future in their absence, such that their loved ones are financially burdened with any liabilities or regular expenses.

In addition, with the rising pattern of double pay families because of the rising way of life costs, the acquiring individuals from such families can either settle on different term plans or a joint term plan for couples, based on their financial requirements. In both cases, the cover would guarantee sufficient inclusion for the other companion and family in case of the sudden demise of any of the two policyholders.

Taking everything into account, in spite of the fact that there is no one size fits all equation, your term insurance cover should be 15 times your annual income or higher if qualified. When settling on the cover sum, make sure to consider month-to-month expenses, your current and expected liabilities and investments towards main life objectives and stages, and your current assets and accumulated wealth.

Over time, term insurance has become customer-centric and flexible to match the changing requirements of the customers. In addition, being a simple insurance product with the lowest premiums and added benefits, critical illness cover, and waiver of premium benefit. It must have a life insurance product that you must have to ensure a financially safe and secured future for your loved ones in your absence.