The uncertainty of life has become glaringly apparent in these days of the coronavirus pandemic. Today, term insurance is on every expert’s lips. But why is term insurance such an important investment?
Here are 8 reasons why term insurance is a must-have investment –
- Protect your loved ones:
Term insurance offers financial protection in the unfortunate event of your passing during the coverage period. Unfortunately, death does not stop the debt. Term insurance policies help protect your family against debt and alleviates future expenses in your absence.
- Low premiums:
High insurance premiums are a drain at a time when business losses and wage cuts abound. So, when you compare term policy plans with other life insurance types, you will find that the premiums are much lower since you pay for pure protection and nothing more.
- Gain an early advantage:
When you invest in a term insurance plan at an early age, you can get very high coverage at very low premiums. Even if you purchase term insurance later in life, it remains highly affordable. When you compare insurance policy types, term insurance is the surefire winner based on its affordability. Moreover, the premiums remain fixed throughout the coverage period.
- Enhanced coverage:
Riders offer enhanced protection at a slight increase in your premium amount. These riders cover a gamut of situations. For example, if you are at risk of disability because of a dangerous job, then the accidental disability rider would be ideal for you.
Every rupee saved counts. Term insurance helps you save money by offering tax-saving benefits on premium payments and health-related riders. Moreover, the death benefit received by your beneficiary is completely tax-exempt.
- Flexible tenures:
If you compare insurance policy types, you will find that not all life insurance types are as flexible as term insurance. Term insurance allows you to choose between short- and long-term insurance tenure. Short-term term insurance offers coverage for five to ten years. Long-term insurance covers you until 75 years old. Some insurers nowadays offer coverage up to the age of 100 years old!
- Flexible life cover:
Compare term policy plans and choose a life cover that increases at set intervals and pre-defined percentages. Or choose a decreasing life cover, wherein the sum assured decreases annually at a fixed percentage. This is entirely optional; you can choose a fixed coverage for the whole tenure.
When you compare insurance policy plans, term insurance stands out for its simplicity. Plans that have a savings component along with life coverage such as endowment plans can be complex. You have to figure out how much of your premium is going into the risk cover vs the amount the insurer invests on your behalf as savings. With term insurance, you just pay the premium and get coverage for the chosen tenure.
Term insurance is an investment in your family’s future. But before you buy a plan, use an online calculator to figure out your ideal sum assured amount. Also, compare term policy plans of different insurance companies online. Finally, choose a term insurance policy that offers you the best coverage.