A term insurance policy is one of the simplest forms of life insurance plan. However, many people don’t know certain facts about it. Read on to know some interesting fact that every term insurance buyer ought to know.
When it comes to buying a life insurance policy for your family, you may surely want to buy the best plan, right? And, it is only natural to be sceptical about buying a term plan as it does not offer any maturity benefits. This means you will lose the premium you pay if you outlive the policy period. But, you must know that the term plan compensates for no maturity benefit with high death benefit in the event of your unfortunate demise within the policy period. The amount that your family may receive can help them live comfortably without compromising on their usual lifestyle. Also, the amount can be used to pay off the debts (if any) such as home loan, etc.
So, if you are looking to purchase a term insurance policy, you must take your time to do your research about the policy and take note of some little-known facts, which are discussed below:
A term plan is the best way to secure your family’s financial future
If you compare the different types of life insurance policies available in the market, you would know that the term policy is one of the best insurance options in terms of securing your family’s financial future. It allows you to leave behind a substantially large corpus for the family members so that they can be financially independent even in your absence.
The large sum assured can help them take care of the regular household expenses as well as pay for the children’s education and wedding expenses. Another significant aspect of the death benefits you get from term life insurance is that the amount is not market-linked, which means you know exactly the maximum amount your family will get at the time of buying the policy.
The sum assured can be up to 20 times more than your yearly income
Amongst all the insurance products in India, the term plan pays the highest sum assured. While buying a term policy, you can decide the sum assured based on your assessment of your family’s future financial needs. Apart from the expense, ensure that you also account for the inflation. You can use the online term plan calculator to exactly know the sum assured against a specific premium and for a term. You can buy a term policy with a sum assured as high as 20 times your yearly income. Thus, you can ensure that your family does not face any financial hardship even when you are not around.
You can increase the sum assured of the policy during the tenure
While most of the term insurance policies are designed to suit the needs of the majority of the people, some plans are customisable. Let us assume, you have purchased a term plan at the age of 25 with a sum assured of 10 lakhs. Now, after five years when you get married, your responsibility will increase, and your spouse may be dependent on you financially. Now, the sum assured may not be enough to meet the needs of your family, and so you can increase the sum assured of the policy by paying an additional premium. This is a helpful feature that allows you to adjust your policy needs at different life stages.
Now that you are aware of the three important facts of term insurance make sure that you secure your family with the best term plan.