Term insurance is a form of life insurance where you pay a small amount of money in return for a large life cover for a specific time period. The life cover is paid out to your beneficiary if you unfortunately happen to die before the policy ends. The amount you pay is known as the premium and is a small fraction of the coverage amount. Term insurance is an excellent way in which you can secure the financial well-being of your dependent family members in an inexpensive and affordable manner.
How does term insurance work?
Term insurance provides a large life cover at a low premium cost. Additionally, compensation is paid if you get injured in an accident, however, this may be only a percentage of the entire life cover. The premium needs to be paid regularly until a claim is made or the policy ends, whichever occurs sooner.
A term life insurance plan offers a pure life cover. If due to an unfortunate event, you happen to die, your loved ones would receive the death benefit. If you outlive the tenure of the term life insurance plan, you cannot get anything in return. This is because term life insurance doesn’t have an investment component associated with it.
Top reasons why you need term insurance
Term life insurance is a cost-effective way to cover your life. You can also choose to pay the premium in instalments. The affordability, along with flexibility, makes it very convenient.
High coverage amount
So, do you have any idea how much you need to save for your life coverage? It is a good idea for you to calculate your coverage that you need to have for your loved ones in case you unfortunately happen to die.
For this, you need to evaluate:
The monthly expenses such as food bills, electricity bills, telephone bills, etc
The education costs of your kids
The home rent
Loan EMIs/ remaining mortgage value
Recreational costs such as annual vacations
Once you find out these expenses, you could opt for a large enough to ensure your family doesn't have to compromise on anything if you are not with them. They can carry on with the same lifestyle. The term insurance plans are available with high coverage amounts. So, you won't have too many difficulties finding a policy that covers all the financial needs of your loved ones and get you peace of mind.
These are two of the main reasons why you need to consider investing in term insurance.
The bottom line
Life is very unpredictable these days. This is why you should always take the necessary precautions to ensure that your family stays safe even if something unexpected happens to you. As mentioned above, term insurance goes a long way in ensuring that. Even if you are not there, your protection stays over them, and they get to carry on with their lives. So, explore your options and choose a good term life plan that offers the best and the most comprehensive term life insurance coverage.