If you are the only breadwinner of the family, you have the responsibility of not only taking care of the current needs of your family but also planning their future perfectly; especially their financial security. However, in a situation where the sole breadwinner passes away, the family may come across a lot of monetary challenges. This is why investments play a major role in our life these days. And especially when we are living in a time where every time stepping out of the house equals a risk because of the ongoing pandemic, taking a chance is not at all prudent.
Investments are important for all households, whether only one member of the family is working or there is more than one earning member in the family. And as we talk about investment, one of the best ones is term insurance. Through a term insurance plan, you may secure the future of your family, especially the ones who are financially dependent on you. However, before delving deeper, let us first understand the basic concept of term insurance.
What is term insurance?
It is a life insurance product that provides the policy beneficiary with the death benefit of the policyholder. You can buy term insurance for certain tenure and keep on paying the premium. The period of premium payment varies from one term insurance plan to the others. Some term plans enable you to pay the premium until the age of 60 years, while you can get coverage for up to the age of 75 years. While some will allow you to pay till the age of 60 years and get coverage for up to 60 years only. While you purchase a term insurance plan, there is a sum assured that the beneficiary of the policy will get in an event when you are not there anymore. However, the death benefit can only be claimed by the beneficiary if the death of the policyholder takes place within the tenure. If the policyholder survives through the policy tenure, there will not be any maturity benefit of the insurance plan.
What is the right age for buying a term insurance plan?
There is no particular age for buying a term insurance plan. However, the sooner you buy it, the better benefit the beneficiaries will receive. Also, the premium amount you have to pay on buying one such term plan will be lesser if you purchase it as soon as you get a job and start your career. There are in fact several reasons for this. Let us check out some of them.
- Any individual between the ages of 18 to 65 can purchase a term insurance plan. However, the best age to buy a term insurance plan is in your 20s when the financial burden is lesser on you and you are fit.
- Insurance plans are offered to people who do not have any critical illness at the time of buying the term plan. The healthier one is the more chances that you will be able to buy a term insurance plan.
- You need to have a job or business, so that you can pay the premium quarterly, half-yearly, or yearly. The coverage you take and the premium you pay may depend on the kind of money you are earning.
Factors to consider while buying a term insurance plan
There are several types of factors that you must consider while you buy a term insurance plan. Here are some of them:
- You must do thorough research on term insurance and understand the concept before making the decision
- You must not hide any kind of required details from the insurance company that you intend to buy a term insurance plan from
- You must disclose information about all the other investment policies that you already have
- The beneficiary you choose should have a sound knowledge of finances and is capable of making the right financial decisions
- Buying an online term plan can help you in purchasing the policy directly from the insurance provider, which means there is no agent or any mediator. This also means that you do not have to pay any commission to a broker.
A term insurance is perfect if you have a tight budget but you want to ensure a higher sum assured. Some term insurance policies also give rider benefits like accidental insurance at a certain additional price which can be very economical. While you try to compare the term insurance policies online, you can rely on IIFL. As you visit the IIFL website, you can find term plans offered by several insurance companies and understand which one is ideal for your family given the financial obligations you have and also what is the premium that you can best afford. You can accordingly go ahead and buy the right one for you.