When an individual is young, they aren’t as concerned about their financial future; however, with age and understanding, the individual does realize the importance of financial security, and how it can have a grasping impact on not only their lives but their family’s.
There are many options that can ensure financial security. One of them is term insurance. Even though it is a pure life insurance plan, it offers the assurance of a guaranteed sum payable to the policyholder’s family members in case of their untimely demise. Moreover, the policy also offers additional guarantees such as critical illness cover, accidental death benefit, waiver of premium, etc. depending on the insurance service provider’s policy terms and conditions at an additional cost.
Thus, an individual should invest in the best-term insurance plan to secure the financial future of one’s family, along with other investments. Here is everything you need to know about term insurance.
What is a Term Insurance?
As the name suggests, a basic term insurance plan offers a pure life cover to the insured. In the unfortunate event of the policyholder’s death, the nominees get the death benefit as a source of financial support up to the sum assured. However, a basic term insurance plan does not provide any maturity benefit to the policyholder.
To qualify, there are two main types of underwriting. Matt Schmidt with Diabetes Life Solutions states “Consumers can choose between applying using a paramedical examination, or on a non-medical examination basis. Even for those people with average health can be approved without undergoing blood testing. No medical exam life insurance for diabetics exists, and may not be priced higher.”
Importance of a Term Insurance Calculator
Inflation is on a constant rise year on year, which can make it difficult to make ends meet if one’s income doesn’t rise at par with the rate of inflation. A term insurance calculator can help an individual plan the extent of cover they need, and the premiums they would need to pay for that cover in a much-simplified manner compared to manually going through the entire process of sifting through various plans to find the one that best suits them.
By using a term insurance calculator and choosing the best term insurance plan, the individual can create a source of monthly income for their family if they are no more. The lump sum amount up till the sum assured that is offered as a death benefit payout can help cover the expenses of the family.
Why One Should Invest in the Best Term Insurance Plan
There are many reasons why one should buy the best term insurance. Let’s have a look at a few!
1. To Protect the Family’s Future:
Life can be uncertain, and one should always be wary about the well-being of themselves and their family.
For instance, if you are the only one who earns in the family, all the responsibility will eventually land on you. This could include taking care of daily expenses, tuition fees for children, or hospital bills. Thus, the person who earns becomes the financial support of the family. The best term insurance plan is a financial cushion to ensure that in case the policyholder passes away, the family doesn’t have to lean on others for support and can carry on with their lives without any compromises.
2. Critical Illness Benefit
The best-term insurance plan offers critical illness benefits where some percentage of the sum assured is paid as a lump sum upon being diagnosed with a critical illness. This gives much-needed financial support to the family to meet living expenses, pay off hospital bills, and deal with other expenses while the policyholder rests and recovers.
3. Accidental Death Benefit
This is offered as an add-on. In case the policyholder meets with an accident resulting in their unfortunate demise, the beneficiaries are entitled to an additional sum that is up and above the total sum assured.
4. Accidental Disability Benefit
In case the policyholder is left handicapped due to an accident, a lumpsum amount is paid out depending on the policy terms and conditions to support them till they are able to recover and build a source of income. Moreover, certain policies also offer a waiver of premiums in case of serious disability, so the policy cover continues to exist without the policyholder being required to pay any further premiums.
Term insurance plans are one of the most popular insurance products due to the range of benefits it offers at an affordable premium. It is one of the most cost-effective investment policies in the market, as it is much cheaper compared to other insurance products. Even though it is a pure life cover, it’s a must-make investment if you want to leave behind a financial safety net that comes with high liquidity and is immediately made available to your loved ones unlike investment options such as stocks, property, etc. that take time to liquidate, and can force one’s family to lean on others for financial assistance.