Financial planning for the future can be tricky. Sometimes things may go according to the plan, and sometimes it could go awry. An unforeseen and unfortunate situation may occur and derail your entire financial planning. But this does not mean that you stop thinking about having a financially secured future for you and your family.
Today, there are plenty of insurance policies and other investment schemes available in the market that make future planning easier. However, one of the most preferred kinds of insurance policies is term insurance.
What is term insurance?
In simple words, a term plan is a type of life insurance policy that offers coverage for a specific period. In such plans, the insurance company pays the death benefit, i.e., the sum assured amount, to the policyholder’s family in case of their demise during the policy period.
But, if the policyholder survives the policy tenure, the coverage expires, and there are no survival benefits. At his juncture, the insured can either let go of the cover or renew the policy. With renewal, the terms and conditions may also be renewed.
Importance of term insurance at different stages of life
Buying a term plan is the most affordable and effective way of securing your family’s financial future. Let us look at the reasons why you need term insurance cover at all stages of life.
- Starting your professional career
When you are young and start your career, you may have limited or no financial responsibilities and liabilities. Therefore, at this stage, buying a term insurance policy is a perfect choice for you; you can get the coverage at a lower premium.
The best part of buying term insurance early is that the premium does not increase with age, and it is locked for the entire policy tenure. While the premium rate may differ from one insurance company to another, you can compare the plan and choose the best plan to suit your specific needs. Additionally, you can enjoy tax benefits. The premium you pay for the policy is eligible for tax deduction up to Rs.1.5 lakhs in a financial year under Section 80C of the Indian Income Tax Act.
- Newly married stage
Getting married is an important milestone in your life. You may be excited to start a new life with your beloved spouse. But, as soon as you get married, your financial responsibility increases; you become obliged to take care of your partner’s needs. This is a perfect situation to buy an online term plan. Term insurance will help you get sufficient coverage for your spouse against the increasing liabilities because such liabilities will fall on your partner if something untoward happens to you.
The payout from the term insurance will come in handy to help your spouse pay off the debts and remain financially secured and stress-free.
- When you have a child
Words cannot describe the joy of becoming a parent; it is a beautiful feeling. And as a parent, you would want to give the best of everything to your child, isn’t it? From the best education to the best lifestyle, you would like to fulfil your child’s every wish. But, what will happen to your child’s dreams and aspirations if you are not around?
This is why many young parents are investing in several financial schemes like a term insurance policy to secure their child’s future. The claim amount from the policy can be helpful to fulfil your child’s basic needs, including education and other things, for a longer period.
Final Word
Thus, a term insurance policy is vital at every stage of your life. Whether you are married or single, investing in a robust term plan can ensure that your family is financially secure and stable even in your absence.
