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Term Insurance Plan: We all would agree that our financial needs change with time at different stages of life. To stay financially secure during all these phases, it is important to have a term life insurance plan. Term insurance that offers a large life cover at very low premiums (for example, 1 crore-life cover at Rs 500 per month for the next 30 years) is an important tool, which can provide financial stability to the family. Provides security layer for Keeping in mind the changing financial needs, it is important to keep reviewing your insurance plans as well. Term insurance is never a one-time decision and it is imperative to review your coverage at different stages of life to ensure that the future needs of your dependents are adequately met.
policybazaar.com In Business Head – Term Life Insurance, Sajja Praveen Choudhary According to the report, the need for term insurance coverage is highest when you are in the middle of your career. And there are liabilities to pay. Hence, grab a term insurance plan as early as possible so that you can get maximum insurance cover at an affordable price. Waiting to buy a term insurance plan till the liabilities are due can prove to be wrong at times. So take advantage of young age and good health and buy an insurance plan that can cover yourself and education loan, if any.
Term plan in case you are young and unmarried
According to Chaudhary, if you have started your career recently, then you may feel that no one is dependent on you. But if your parents have already retired, or you have any siblings who depend on you, then this is the right time to take a term plan. A very simple basic thing that many people do not know is that insurance is something that you can easily get when the risk is low, but it is ignored by most of the people at that time. Also, when the risk is high, everyone rushes for insurance but it becomes difficult to cover it. You can easily get term insurance when you are healthy at a young age and you will also have to pay very less premium for more cover.
Term insurance after stepping into household life
By the time you turn 30, the chances are high that you are married and have small children. Professionally, the salaried professionals would have reached the mid-managerial level and self employed individuals would have a steady stream of income. Individually, your retired parents can also be dependent on you.
According to Chowdhary, at this point of time you will be surrounded by many liabilities and it is very important to have adequate coverage to pay all the liabilities. At this stage of life, it is necessary to have a large cover to pay all the possible expenses of your family. Increase your coverage to 1 crore for overall protection, coverage till your retirement age or your earning potential.
Term insurance at the age of 40 to 50
When a person reaches their late 40s and early 50s, most working professionals move into senior managerial roles, while business owners seek to expand their business to various locations. During this age group, there is a significant increase in the expenses along with the income of the individual. This happens because the children have grown up and major one-time expenses like marriage, higher education are at the stage. Apart from this, you may take a loan for similar expenses or a house for your family. According to Chowdhary, all these expenses make it important to increase the sum assured of your term cover so that all expenses can be adequately met even in your absence. At this stage of life, a term cover of at least Rs 1.5 crore should be obtained.
How much is the cover of term insurance
Chaudhary told that while buying a term insurance plan, keep in mind that the sum assured should be at least 12 to 15 times your annual income. Apart from this, there are some other factors as well, which should be kept in mind while deciding the coverage amount. Some such factors include lump sum expenses such as child’s education and marriage, loans – if any, such as home, car or personal loan – retirement plan of the spouse, medical emergency and everyday expenses. It is essential to know all your liabilities while planning to buy term insurance.
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