The pandemic has forced people across societies to realize the importance of term life insurance. With the uncertainties of life increasing day by day, there is a need for every family to safeguard their future financially. And this is where term insurance can step in and help you deal with financial distress.
You might wonder, ‘What is term insurance?’ or how it might help your family financially. If you are perplexed, fret not! We have got you covered. Read on to understand what is term insurance, its nuances, and why you need it.
What is term insurance?
The answer to ‘what is term insurance’ is relatively simple. A term insurance plan is an insurance cover that offers benefits in case the policyholder passes away before the expiration of the policy. If you are worried about your family’s finances, especially in your absence, you must buy term life insurance.
While hundreds of life insurance policies are on the market, choosing the best one for you might appear daunting. To select the best term insurance policy, you must understand what insurance is and uncover its nuances.
Decoding the Nuances of Term Insurance
Term insurance plans come in different forms and formats. Some have fixed premiums spread over a month, while others are yearly plans. Now, what is insurance premium? A “premium” is a fixed amount of money insurance firms charge the policyholder. It is paid monthly or yearly to receive the benefits of insurance policies.
Based on the insurance selected; a medical check-up is done to review the person’s medical history. The basis for the medical records, the insurance premiums, and the duration are fixed for the policy. The premiums are calculated based on numerous factors, such as the individual’s health, life expectancy, and age. If the policyholder dies before the policy lapses, the insurance company pays the insured’s family.
Having answered questions such as, what is term insurance, what is an insurance premium, and what kind of nuances term plans entail, it is essential to understand now why you need it.
Exploring the Advantages of Opting for a Term Insurance Policy
1. Securing the Future
As an earning family member, you have obligations towards your parents, spouse, and children. Since life is uncertain, death can deter you from fulfilling those responsibilities. But, with an ongoing term insurance policy, you can always plan your finances accordingly. In the event of an untimely death, an insurance payment can ensure your family remains safeguarded from financial liabilities. It will ensure that your children continue their education, your spouse can support herself, and your parents can live comfortably.
At some point in time, every individual opts for a loan. It can be a personal loan, housebuilding loan, car loan, education loan, gold loan, small business loan, etc. In the event of your sudden death, the term insurance pays off the outstanding loans with interest. This ensures that the burden of paying them off does not fall upon the family.
3. Financial Stability
Financial stability is one of the fundamental reasons people opt for any insurance. The premature death of the lone breadwinner of the family can make the lives of the remaining family members take a somersault. Managing household expenses and necessities can become quite challenging in that situation. This is where term life insurance steps in to help your family.
4. Low Premiums & Massive Coverage
In the absence of maturity benefits, term insurance policies offer most of us high coverage at affordable premiums. If you buy them online, the prices are further lowered since no agents are involved.
5. Tax Benefits
The premium you expend for the term insurance policy can help you save money as a tax benefit. If you opt for term insurance, you get a rebate of up to INR 1.5 lakhs a year.
6. Coverage for Critical & Terminal Illnesses
You get payouts if you are diagnosed with a critical or terminal illness. Term insurance pays the assured amount of your insurance plan based on the type of illness you suffer from and the terms and conditions of the policy.
By now, we are sure you have understood what term life insurance is, what an insurance premium is, and why you should buy one at the earliest possible date. Term life insurance is one of the most reliable and cost-effective ways to future-proof your family’s financial status.
So, now that you have a fair understanding of what term insurance is and its benefits, you can select the best one for yourself. So, don’t wait! Safeguard your future today! Consult reliable insurance companies and explore options that suit your needs.