Life is pretty unpredictable and this keeps us thinking about the safety and security of our families if something unfortunate comes to us. What will happen to your family if you are not there to look after their needs? To make things better for you, now there are many insurance policies available in the market, which has been shaped in a way to cater your requirement completely.
Apart from permanent life insurance policies, there are term insurance policies, which demand little money but cover the exact time period for which you wish to be secured. Best term insurance plan for those who want to be covered for a specific period of time without spending much. Before you take any term insurance policy, let’s check some points that might help you to get the best out of the scenario.
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Enough Coverage Period:
The solo purpose of any life insurance policy is to bestow financial security on your dependants in case of your demise. So the coverage period of your policy should not be less than your Human Life Value (HLV). It has to be adequate enough to exceed HLV. Calculate your income along with liabilities like loans and then decide on the coverage period of the term insurance policy. Suppose, you have opted for a home loan and it will take next 15 years to be squared. To secure source of money to repay this loan in case of your sudden demise, you can opt for a term insurance for next 15 years. Or your child is going to complete his/her study in next 10 years. Not to hinder his/her progress because of financial crisis, you can go for a 10 year term policy.
Cost of the Policy:
Life insurance must be endured by all of us especially in this time when we live in nuclear families and there are not many persons to look after our family financially after our death. But situation is not that rosy as we all have financial burdens which prevent us from buying life insurance policies. Here comes term insurance policy to get you out of this messy situation. As you have to pay once a year and the cost is appreciably low than any conventional permanent life insurance, you would not mind to invest on them. First you calculate the need of your family and your total asset. Then decide on the amount and coverage of the term insurance.
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Enhancement of Life Cover:
Some term insurance policy comes with flexibility of enhancing the life cover at certain stages of your life. For example, at the time of your marriage you are eligible for 50% enhancement of life cover and when you become a parent, life coverage of the insurance will increase by 25%. This special feature of some term insurance plans attracts more clients and helps them to secure their family’s future by investing relatively lesser amount.
Riders:
If you don’t have a very fair about ‘Rider’, let us explain what this is. Rider is actually an add-on to your primary term insurance policy. It gives you benefits beyond your sum assured depending on certain terms and conditions. If you opt for a critical illness rider, you can get the sum assured on being diagnosed with any critical illness. This is an extra benefit that you or your family can receive in addition to the death benefit.
I hope that you have a clear idea on what is term insurance and what advantages it comes with over conventional life insurance. Now don’t hesitate to choose the right term insurance for you and your family and secure the future of your loved ones in safe hands even in your absence.
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