Do You Really Need Term Insurance? 4 Tips to Help You Decide

Life is all about enjoying those little moments with our family. But these moments can be interrupted with an untoward event, leaving your loved ones high and dry. This is the reason why getting term insurance is crucial for creating a secure future for your family.By investing in a term plan today, you are securing your family’s tomorrow. Further, term insurance plans are quite affordable, which implies you are preparing for future contingencies without disturbing your current financial goals.

However, many individuals procrastinate or rather ignore buying term insurance mainly because there is no maturity or survival benefit.But the fact is that there are many factors which make term insurance a necessity today. Following are the same:

1. Number of Dependent Members

(Image Source: Shutterstock)

One of the main factors deciding whether or not you need term insurance is the number of dependent members in your family. You might be the single earning member, having the responsibility of your spouse, kids and parents. In such event, it’s essential that you leave adequate funds for each family member, which will allow your spouse to fulfil the financial needs of your family, education as well as the marriage of your children and health requirements of your parents. Therefore, if you have more dependents, you need a term plan that can provide sufficient coverage in your absence.

2. Higher Education of Kids

As a parent, you want the best of everything for your kids – from good health to a job that can provide them with all of life’s necessities. And a big part of ensuring a brighter and a more secure future for your kids includes higher education.

These days, the cost of higher education is increasing at an alarming rate. Along with private education, government institutions are also becoming costly. You don’t want any financial constraints to affect your child’s education in your absence. Therefore, to make sure that your kid’s big dreams are not compromised for any reason, it would be a good idea to consider taking a term insurance plan today. Term insurance will act as a cover for your child’s education even after you are no more.

3. Outstanding Debts

A loan or debt can get you and your family the security of a home or the comfort of a car. However, the real responsibility begins only after taking the loan. You may have already thought about paying the EMIs till you are alive and working. But have you considered this- “What would my family do in case something unfortunate happens to me before I repay the loan?”

Therefore, to ensure that your loans are paid on time, you need a backup plan to take care of your liabilities. Term insurance is an ideal solution for this situation.

For instance, if you have taken a home loan for 25 years, then you can go for term insurance with a policy term of 25 years. This will ensure that in case of an untoward event, your loved ones are able to pay the debt from the amount received as the death benefit.

4. Substitute for Your Income

Apart from the unsur mountable emotional loss of losing you (earning member of the family), your loved ones will also suffer huge financial stress as the loss of income will add up to their burden. Therefore, leaving behind an income substitute can be the biggest relief for them,and that can be done through term insurance plans. Term insurance aptly compensates for the financial loss which accrues when the bread winner passes away.

Term insurance plans come with an option of receiving the coverage amount as monthly income. This is helpful,especially, when your dependents are unaware about how to use a huge amount or whether to invest it or not. In this case, receiving the sum assured as monthly income eliminates the dilemma of your family. Many insurers like Future General i give the option to receive the sum assured as:

  1. Lump sum amount
  2. Part amount as lump sum and rest as a monthly payout
  3. Monthly payout which increases with certain rate

Concluding,

Now you know why experts advise buying term insurance early in life. So, what are you waiting for? Get yourself a term insurance plan today and be the early bird that catches the worm!


Reply