Did you buy a life insurance policy because someone forced you to? Aren’t you happy with it? Do you regret your heart out for buying an incorrect policy? Get the answers to your unresolved questions here in this article.
Life insurance is a need when you know you have someone back home who’s dependent on you. They may be your children or spouse or your dependent parents.
Most of us have one such life insurance policy that is a “money back policy” or say an “Endowment plan”. An insurance agent who is a friend, a relative, a relative’s friend or a friend’s relative generally sells these plans.
When someone known wants you to buy such life insurance products just to meet their professional targets, you might unknowingly fall prey to such money-back policies and become a target yourself!
Unfortunately, you did not really bother for what you bought from your friend’s relative and ended up nothing but REGRET!
Are you sure that the policy you bought is good enough?
Most of us fail to grill our agents or whomsoever we bought the policy from, the right questions while investing. You were so excited to reap maturity benefits out of the insurance plan that you almost forgot that investments and insurance are two different components.
For instance, you might have had earlier bought an endowment plan which is a combination of insurance and investments. In the form of premium every year, you have pumped in a huge chunk of your salary.
But soon you realized that these plans are usually products that offer low cover and low yields. In short, you hardly get any insurance cover for the big bomb premiums you pay every year!
Take a short quiz to know if you are sailing in a boat that doesn’t have sufficient water?
1) Do you have heaps of loans or mortgage? You might have taken heaps of loans. Say, a personal loan, a housing loan and a gold loan too. With your demise, will your family members be in a position to pay off all the loans and lead a comfortable lifestyle?
2) Would the maturity amount suffice to meet the goals you outlined for yourself? Have you opted for a plan that would offer a sufficient sum assured to your family once you are away? Do you think that the insurance cover would repay your credit cards, household expenses, kid’s education etc.?
3) Do you have family members dependent on your income? Are you the only bread-earner of the family? Will your sudden demise create an impact on the family members, both emotionally and financially?
If the answers to the above questions are negative, you are actually sailing in a boat that doesn’t have any water!
This is when you realize that you should have been ideally looking for a pocket-friendly insurance plan that would offer you higher cover at a lower premium.
So now that you have realized to opt for a term plan, let’s have a look at how it would be beneficial to you and your loved ones in the scenarios below:
If you have a lower budget
We know that you have already paid a few premiums of the insurance plan that you are not happy with. Now, you are looking for a plan with a lower premium because you feel your budget is a bit tight! Term insurance would be a pocket-friendly plan that would fetch you high cover with a lower premium.
For instance, if you are a 25-year-old non-smoking working man, drawing a salary of Rs. 3-5 lakhs per annum, you would be surprised to know that your annual premium for term plan would be merely around Rs.4,000 per year. Also, you would be eligible for additional benefits like terminal illness and life stage benefit with certain insurers.
If you are the sole earner
Agreed that you are the only breadwinner of your family. And that your beloved wife and children would suffer badly in your absence. Love is one thing that would be in their memories forever, but what about finances?
Can you see your wife suffering to pay the children’s school and tuition fees? Your family would lead a comfortable lifestyle if you buy a term plan at the right age.
For example, you have bought a term plan at the age of 30 offering you a cover of 1 crore (15 times your annual income). Now, in your absence, your wife would be in a position to repay your debts as well as keep certain funds aside for your kid’s education too.
If you are looking for a high sum assured
There are no limits for the maximum amount of sum assured in a term plan. The insurance company you wish to opt for would qualify you to avail a higher sum assured.
So, you would be eligible for a cover of 50 lakhs or 5 crores depending on your annual income. This corpus post your demise would help your family meet their monthly expenses and so, it is important that you choose your sum assured wisely.
Are you mixing insurance with investment?
In spite of the above-mentioned benefits, most of the people consider term plan as an investment. But, let me tell you one thing that term plans are pure death benefit plans with no returns of cash value on the maturity of the plan.
This is one of the reasons why people are still unaware about term plan and usually miss to buy one. But, if you leave aside the maturity benefit, term plans are a blessing in the basis of coverage provided. A person with a lower income can also easily afford to buy a term plan at a low premium with higher coverage.
Since the premiums of a term plan are lower, you may think of buying yourself a stress-free future along with peace of mind, isn’t it?
So, you might have got convinced enough to buy a term insurance for yourself. Ensure you do your homework, go through the policy documents clearly and understand the policy thoroughly.
While never buying a term insurance may or may not ruin your life, it will certainly ruin and hurt those people back home who you’re buying it for.
Buying a term insurance policy through Coverfox.com would help you get an expert advice. You are guaranteed an unbiased and informed opinion to buy a plan customized as per your requirement. Not only pre-sales, but you are also assured post-sales assistance from our service manager’s team with all your after-sales requirement, right from claims to renewals!