It is futile to argue over the importance of a term life insurance plan. The Big Question. How much term life insurance you need? Availing a term life insurance plan is just a job half done. If you do not avail sufficient amount of cover under a term life insurance plan, your family will not be able to maintain the current living standards, they enjoy. Why avail term life insurance at all?
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Things are very costly, today. Inflation is eating up all your money. You earn a handsome salary and yet, struggle to make ends meet. How can you expect your family to pay such high bills in your absence? So how much term life insurance should you avail?
Rule of thumb: Make sure to avail term life insurance with a sum assured, which is 10 to 15 times your annual income.
Your family has goals and aspirations. Your son might want to be a doctor. Your daughter a computer engineer. Money should not come in the way of your family’s goals, even if you are not around. You need to make sure your family is able to maintain the lifestyle they currently enjoy. There should be enough money for your children’s education and marriage. If there are any loans to repay, make a note of this too.
Rule of thumb: Choose a sum assured in your term insurance plan = An amount which if invested, gives a regular income to your family, so that they are able to maintain a lifestyle they currently enjoy.
SEE ALSO: Term Insurance for Home Loan
Our’s is a country of 125 Crore citizens. Less than 10% of our citizens have life insurance. Shocking isn’t it? When it comes to term life insurance, (a very important life insurance plan), the numbers are even less. Are you one of these citizens who feel, you don’t need term life insurance?
You love your family. You will do anything to make sure they are safe. So why not do something as simple as avail a term life insurance plan? By choosing a term life insurance plan, you can guarantee that your family is protected in case of untimely death. Your family will get money called the death benefit, which will help them lead the same lifestyle, they currently enjoy.
You have availed a home loan, car loan and a personal loan. You are struggling to pay the EMI’s on these loans. In case of untimely demise, can you leave these loans for your family to repay? Isn’t this absolute irresponsibility on your part? If you avail term life insurance, your family will get money on untimely demise, which will be used to repay loans. As a responsible head of the family, this is a duty you cannot neglect.
In today’s hectic World, availing term life insurance is not a choice. It is a necessity. The term life insurance plan cares and provides for loved ones, in your absence. But can you avail any term life insurance plan? This is where you need to make a choice.
Why do you avail term life insurance? Isn’t it so that your family gets the death benefit, when you are not around? What if the life insurer denies your family’s claim? This is why you need to check the claim settlement ratio of the life insurer. This is a ratio of the total number of death claims received by the insurer, to the total number of death claims settled. You get to know the total number of death claims settled by the life insurer. This ratio better be high or your family will go through tough times and there’s nothing you can do about it.
Thumb rule: Make sure the claim settlement ratio of the life insurer is above 90.
Avail term life insurance plans which offer the benefit of riders. You might have to pay a slightly higher premium for these riders, but they are worth every rupee. Avail the accidental disability rider which gives you money, if you meet with an accident and can’t work for a few months. Make sure to avail the critical illness rider, which gives you money, if diagnosed with a critical illness. Critical illnesses are money killers.
Choose a term insurance plan which is competitively priced, but remember, Cheap does not mean best.
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