6 Reasons That Make Term Insurance a Must Buy
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6 Reasons That Make Term Insurance a Must Buy

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  • 15th Feb 2022
  • 250

 6 Reasons That Make Term Insurance a Must Buy

We never know how long we are going to live. Since the future is so uncertain, it is necessary to prepare for the unknown and keep your loved ones financially sound, stable, and secure. This is exactly why you should go for a term insurance policy. This policy is especially popular because of the whole lump sum amount it assures (on the policyholder’s untimely death) to the family at reasonable premium payments. Here are six reasons why you should definitely get term insurance.

Pocket-friendly premiums

The premium amount is generally low in the case of term insurance policies in comparison to other insurance plans since it does not involve any investment as such. For instance, to get a cover of ₹1 crore, you might have to pay a premium amount of ₹7000. Generally, people pay only 1% of their annual income towards this plan. The cover it provides against the premium amount makes this scheme worth it.

Financial Security

You do not want to burden your family members with a list of debts and liabilities in case something was to happen to you. Death comes unannounced and it can wreak havoc in a family’s life if they are not financially secure. A term insurance can help you prepare for such uncertainties and ensure that your loved ones lead a comfortable life even when you are not around.

Flexibility

Term plans are incredibly flexible. You can get them in online mode and offline mode. Besides having a health plan is not mandatory to avail a term insurance policy. Furthermore, you can add rider benefits to your plan and change it as per requirement in the future.

Fewer Claim Rejections

When you buy a term plan, ensure that you are absolutely honest about your medical health and records with the insurance company. This will ensure a smoother settlement of the lump sum amount in case such a situation arises. If there is any discrepancy in the details that you provide to the company, it might lead to a delay in claim settlement or even rejection. Usually, with term policies, claim rejection is not very common.

Rider Benefits

These are bonus add-ons that a policyholder can include in their term plan for additional benefits and cover. Riders have a nominal charge which is given over and above the term insurance premium. Some common types of riders are critical illness, permanent or partial disability, accidental death, etc.

Payback

This is not the case with all the term insurance policies. Generally, if the policyholder survives the time period of the term policy, then no death benefit or lumpsum amount is provided. However, recently some of the insurance companies pay back a certain amount from the total of premium payments that have been made towards the policy.

As you can see, a term policy offers a host of options and benefits. Above all, it gives you immense peace of mind with the knowledge that your family will be taken care of. Hence, buying one is probably one of the best decisions you can ever make!

- A Consumer Education Initiative series by Kotak Life

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