Term insurance is the life insurance plan provided by insurance companies that offer comprehensive financial coverage against the premiums paid for a particular period to the policy’s beneficiary. People invest in term plans because they are provided with the assurance that the financial future of their family would be secure after their sudden demise.
This is because term plans are amongst the most popular kinds of life insurance that offer death benefits in the case of the unexpected death of the policyholder during the insurance policy term. One can renew the term policy annually for an extended term, convert to a permanent coverage or regular life insurance, or even cease it without any hassle.
Term plans offer financial security to the policyholder’s family as well as are capable of fulfilling their future needs like child’s marriage, the child’s higher education, repayment of loans, etc. As compared to life insurance policies, term insurance plans provide the highest coverage for minimum premiums during the policy’s term. Some companies also cover partial and permanent disability wherein the regular income of the policyholder is disrupted.
Why Should You Buy Term Plans?
#1 Protection of Assets
A term plan lets you take loans for assets like a house or a car. If you are not around, your family and dependent might be burdened with your loan’s repayment. In such scenario, your loved ones can use the money they will get from the term insurance for paying the outstanding debts.
#2 Affordable Premiums
Term plans come with the lowest premiums. The low premium lets you afford an optimal amount assured so that you may ensure sufficient financial security to the ones who have to survive without your presence. Moreover, since all insurance companies offer term insurance plans, they are ready to negotiate and have several plans to stay ahead in the competition. This is why they offer you have a greater sum for lower premiums.
#3 Cover Critical Illness
Some term insurance policies also give protection against critical illness. This type of cover provides a lump sum amount for a very low premium when any critical illness like heart attack, cancer, kidney failure, etc. is first detected.
#4 Good for Young Families
When you are young and have small kids, it is crucial to invest in the life insurance policy so that if anything happens to you unexpectedly, they do not have to struggle financially when you are not there. Moreover, during your youth, you focus on saving, building assets, making money, while your expenses are a lot due to school fees, interest amounts, etc. As a result, it is difficult to manage to pay high premium amount on the insurance policy.
However, low premiums and high coverage offered during youth let you secure the financial future of your loved ones. Also, you will be offered more amount because you are more fit and free of illnesses when you are young.
Term insurance plans are the most affordable and the best way to provide for your family financially even if you are no longer alive. Apart from that, you will not be paying high premium amounts in you choose term plan.