7 Definite reasons to buy Term Insurance in 2021
Many people buy term insurance plans without knowing their actual purpose and reasons. This ultimately leads to selecting the wrong policy and ends up in wastage of money.
Nandini, a 35-year-old single parent, is now in a responsible position to give proper education to her two children, and at the same time, she is working towards safeguarding their future. Until now, she is not very aware of the importance and necessity of a term insurance plan, but she is planning to buy one for a secured financial future.
It is not only Nandini but there are many people in a similar situation and seek some guidance to understand the importance of buying term insurance. Once you get a clear idea of why you need to buy term insurance, then there is no looking back.
But before moving on to why term insurance is important to buy, you need to understand the benefits that a term insurance plan offers. Here are the top 6 benefits offered by term insurance.
Why Term Insurance is important?
- The term plan can be the perfect option if you have a tight budget. This is because a cash value insurance plan like endowment, moneyback, or whole life may cost more when compared to the term plan.
- If your income is low, but you still want to acquire an insurance plan with a high sum assured and life cover, then the term plan is the best option for you.
- Suppose, you are the one who just entered a new career or a new business venture. In that case, you can try to choose a term insurance plan instead of going for a cash value policy and utilize the balance income or your capital for other development activities.
- If you have taken a considerable amount of loans like a housing loan, car loan, or another type of loan, then the term plan can prove to be a perfect choice for you. In case of any unforeseen happening, the sum assured can protect your family from repaying the loan.
- This is an inexpensive method to provide sound financial security to your family members who are your dependent.
- Term insurance plan serves as a supplement to the whole life and endowment policies. This is designed to meet an individual’s income needs. For instance, this term plan can be used as a rider to the cash value insurance plan to increase the death cover for some specific time period.
Now, let’s know the definite reasons to buy term insurance.
Top 7 Reasons to Buy a Term Insurance Policy:
- Low premium – High sum assured: Term plans are available at considerable low premiums against high sum assured amounts when compared to several other types of insurance policies. This is one of the primary reasons that make term plans the best choice for those looking for an affordable insurance option.
- Simple yet effective: There is no doubt that a term plan is the simplest type of life insurance policy. When compared to any other kind of plan, the term insurance policies do not require many documents to be attached, unlike the other investment plans. It is also easy to buy term insurance online by just making a few clicks.
- Easy to understand: Term plans have simple terms and conditions, which are very easy to understand. Therefore, you can quickly read out the policy papers and know the benefits. Moreover, you can also take the assistance of an insurance broker like IIFL to help you buy the best term plan.
- Secure your family’s future: If you are the only source of income to your family and have children, spouse, elderly parents as dependents, then you must consider buying a term plan. Moreover, if you have some debts, then to prevent your family from such a burden in case of an unforeseen happening, a term insurance policy is undoubtedly a perfect choice. It secures your family from any financial insecurity.
- Huge coverage: If you want high life cover in any other type of plan apart from the term plan, then you need to pay a high premium. But in the case of a term plan with a low premium rate, you can still achieve high life cover.
- Riders: Term plans come with rider options. Riders are the add-on benefits that enhance the scope of your base policy coverage. Some term plans have riders’ options by default, whereas some may seek extra money to be paid to get the riders. However, this is absolutely optional; therefore, you will pay an additional premium only if you want the riders. You also have an option to choose the type of riders and the number of riders for your term plan.
- Competitive pricing: The term plan is the basic type of plan which is offered by almost all insurance companies. Therefore, the pricing of the term plan is quite competitive. This competitiveness in the price further helps you to easily buy the best term plan at the lowest cost possible.
There is no doubt that the term plan functions as the minimum required financial security for the dependants in case of an unforeseen happening to the policyholder. Anyone who wants to give financial security even in their absence should definitely buy a term insurance plan. Regardless of your income range and your family needs, the moment you decide to secure your family with safe financial security, then simply buy the term plan. You can visit iiflinsurance.com to know about different term plans offered by various insurers.