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Home Articles Make your Family Financially Healthy? Term Insurance should be your priority

Make your Family Financially Healthy? Term Insurance should be your priority

IndianMoney.com Research Team | Updated On Friday, August 23,2019, 04:10 PM

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Make your Family Financially Healthy? Term Insurance should be your priority

 

 

Make your family financially healthy? Term insurance should be your priority

Let’s hear the story of Raghav, who expired 6 months ago in a road accident. He was the only breadwinner for his family, (spouse and three children). His spouse is a homemaker and children are still studying in school. The unexpected death of Raghav impacted the finances of the family.

What could Raghav have done to keep his family financially secure?

Raghav could have availed a term life insurance policy. Term insurance is a type of life insurance plan in India. People buy term plan to offer financial protection to loved ones.

If Raghav had availed a term insurance plan with a sum assured of Rs 1 Crore, his wife and kids would have enjoyed a huge death benefit. This is why term insurance is highly recommended to breadwinners and those who have dependents.

Here is the story of Rakesh, who met with a road accident 3 months ago. He lost one of his limbs in this accident. Fortunately, he has a term insurance plan with a waiver of premium rider. If you avail the waiver of premium rider, the insurance company pays the premiums on your behalf and keeps the policy active, in case the policyholder falls critically ill, get seriously injured or disabled.

Want to know more on Term Insurance? We at IndianMoney.com will make it easy for you. Just give us a missed call on 022 6181 6111 to explore our unique Free Advisory Service. IndianMoney.com is not a seller of any financial products. We only provide FREE financial advice/education to ensure that you are not misguided while buying any kind of financial products.

See Also: 10 Best Things About Term Insurance

How Mahesh helped his family earn income after his death?

Term insurance can be availed with riders like waiver of premium rider, critical illness rider, income benefit rider, accidental death benefit rider, accelerated death benefit rider and permanent disability rider.

Term insurance with income benefit rider helps dependent members get income even after the death of the insured. Mahesh, who died recently, had term insurance with income benefit rider. His family gets additional income even after his death. This could be regular monthly income up to 1% of the sum assured for a fixed period of 10 years.

How can people ensure complete financial protection?

Unlike other life insurance products, term insurance is complete risk protection. Before buying term insurance, consider your family’s financial requirements and then decide how much cover you need. If you are servicing any loans, the term insurance cover you choose must be enough to clear off loans and financial obligations. Check IndianMoney.com HLV calculator to calculate the sum assured on term life plan. This makes sure you get the term life cover you need. Avail riders for additional cover. Pick only those riders you need to avoid paying excess premiums.

Common term insurance types

  • Level term policy: A level term insurance policy is one where the sum assured remains unchanged across the term of the policy.
  • Return of premium plan: People who buy return of premium plans get back the premiums paid, if they survive the policy term.
  • Increasing term plans: These term insurance plans allow policyholders to enhance the sum assured each year. Premiums are comparatively higher on such plans.
  • Convertible term plans: People who purchase convertible term insurance policies will have the option to convert their existing plans to some other insurance plan.

See Also: Death, Term Insurance and Taxes

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IndianMoney.com Research Team

The research team at IndianMoney.com comprises of certified and experienced professionals who share the company's vision to make every Indian financially literate by equipping every Indian with right and unbiased advice. IndianMoney.com research team provides newsletters, articles, videos and FAQs on various financial products and concepts only to help you make wise financial decisions.

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