Thinking Term Plan As An Expense? Think Again
Over the course of life, you meet with a lot of uncertain circumstances. While you cannot control the uncertainties of your life, you can certainly add better protection for your family. When it comes to gaining financial protection against unexpected twists and turns, a term plan plays a pivotal role.
People often avoid taking term plan because of the misconception that it is expensive. However, with the kind of benefits you gain, it is undoubtedly worth the investment. There are many ways a term plan provides an optimum return on your investment plan including –
- Maximum Financial Security
Indians are considered to be significantly underinsured. This means people who have insurance, do not have the necessary cover to secure their future financially. The insured sum is an essential factor that determines the premium you will be paying.
The term insurance plan provides more security by covering a substantial amount while keeping the premium minimal. That means you pay a little amount to gain massive benefits in uncertain situations. When it comes to providing financial security to your family, it is the best insurance policy to consider.
- Extends Versatility
Term insurance is a category of life insurance; however, you can somewhat modify it to use it as health insurance. By paying a certain additional amount, you can make modifications in your existing term insurance plans.
It will allow you to gain coverage for accidental death, disability and critical illness. With a little tweak, you can avail both life and health insurance within the same policy. So a single plan will give you multiple benefits, and you will not have to manage two separate premiums.
- Premiums that are Fixed
Term insurance aims at providing maximum financial security. It is a very stable form of life insurance as the overall sum insured, and its premium is not indexed to the market. Once you have selected a particular plan, the premiums will remain the same through the life of the term.
Therefore, no matter if the market goes up or down, your death coverage will remain the same in the same amount of premium.
- It is Cost-Effective
Contrary to the popular misconceptions, a term insurance plan, in reality, is quite cost-efficient. It is one of the basic life insurance plans that you can get, and there are no investment or saving components associated. This is what makes a term plan cheaper than other life insurance coverage.
- Increased Coverage
With improvements in the lifestyle, the needs of your family are only going to increase. It becomes important to increase life insurance coverage to cater to increased financial needs. In some types of term insurance plans, you can adjust the insurance coverage at different stages of your life.
After a certain age, the assured sum automatically increases to a particular level. Such flexibility allows you to be rest assured with regards to the financial stability of your loved ones.
- Better Flexibility
Every family has a different financial requirement. While some need regular income, others lookout to gain receive lump-sum money. With term insurance plans, you get flexible options for payout. You can either choose to receive the payout in equal instalments or get the lump-sum amount. So you need not stress about the money not fulfilling your family’s requirements after you are gone.
- Copes With Inflation
Many people have the misunderstanding that they can save or invest their money somewhere other than term plan, as they will be gaining benefits even if nothing happens to them. The factor they miss out on this concept is inflation. In all other investment plans, they get a fixed amount of money at the time of maturity.
So even if they get 2x of their investment, it will be of little use with inflation in consideration. On the other side, the coverage of the term plan can be increased with time. Therefore, your family can take advantage of money according to that time’s market and requirements.
- Mental Relief
This factor may not play a crucial role for you while deciding for a term plan, but you get to know its importance with time. When you are gone, your family must already be dealing with a lot of emotional distress. And not having enough money will only add up to their troubles. Plus, the worry of their expenditures will always be on your head at the time you are alive.
To get rid of both of these stresses, you can opt for a term plan. When you know that your family’s financial future is secured in any case, you will be mentally relieved. And after you are gone, your family will not have to deal with any money issues as they will get the insured sum on time. So the results are only positive.
Above are some of the reasons why term insurance is effective insurance in every way. With little investment, you get to receive huge coverage to financially secure the future of your family.