When you are young, you feel a sense of carefree bliss. All you think about is short term gains and active life. However, you need to understand that as you grow and age, your life will become slower and require long-term planning to safeguard yourself and your loved ones against the uncertainties.
Making provisions for your family in terms of protecting them against such risks is the first step to financial planning. In this situation, it is best to invest in term insurance that will help you protect your family financially against an eventuality. Most term plans are designed in such a way that they can be tailored to suit your requirements. You can also use a term insurance premium calculator to calculate the premium you can afford and invest in life insurance that makes the most practical sense.
Term insurance is the cheapest way of protecting your family against something unfortunate. Therefore, it is essential to select the right plan that you can afford throughout the policy duration.
Follow these steps to avail of maximum financial protection with the help of term insurance.
- Assess Your Financial Needs
When you are investing in term insurance, there are several ways to choose the right policy. For starters, you need to carefully assess your needs in the sense that you need to calculate the sum assured that provide adequate protection to your family members in your absence.
Sum assured is the value that your dependents will receive a death benefit after your demise. So you need to use the term plan calculator to determine that value by considering the number of dependents when calculating the sum assured. Additionally, you also need to take your family’s lifestyle and growing inflation into account. Besides, the extent of your term plan’s cover should also be dependent on factors like home loans, business loads, and credit card debts to overcome the burden of repayments, in case you are not around anymore.
Since term plans are a highly personalized insurance product, always make sure that you buy one after careful assessment of your needs.
- Choose a Suitable Payout Option
- Your family’s needs may not be the same as yours. They have a different lifestyle and may need financial assistance based on that lifestyle. So after choosing the type of policy you want and determining the premium, you are going to pay by using the term insurance premium calculator, you need to select the payout option. There are multiple choices, such as monthly, lumpsum, or a combination of both. You can customize the payout as per your family’s requirements.
This is especially important if you are the sole earning member of your family. In that case, a monthly payout will help your spouse manage day-to-day expenses even with the loss of your income. This monthly payout will serve as an income replacement that can be a massive help to your family in your absence.
- Create an Equitable Mix of Riders
Did you know that your term plan can not only give your policy nominees the death benefit but also take care of your various financial requirements with the help of add-on benefits? You can supplement your life insurance policy with a rider benefit after paying a small premium. Use the term insurance premium calculator to see how much will the additional benefit cost you if you add it to your policy. Common rider add-ons that people usually add to their insurance cover include:
- Critical Illness: This rider provides financial protection against major illnesses such as heart attack, cancer, organ transplant and more. If you are diagnosed with an illness mentioned in the term policy, then your insurance provider gives you the sum assured to help you pay for the treatment costs.
- Waiver of Premium: This rider benefit helps you during the loss of pay by waiving off your premiums while keeping the policy active.
- Disability Cover: Secure your future from incidents such as disability caused due to an unfortunate accident.
- Choose a Plan with Additional Benefits
Term plans are pure life insurance cover, which means that no part of your premium is paid in wealth generation. Therefore, when the time comes, the insurance provider will simply pay the death benefit amount to the policy nominee should something happen to you within the policy term. However, what happens if you outlive the policy term? In that case, you can go for a term plan with a return on premiums that offer you survival benefits. If you live longer than the policy duration, then the insurer will be happy to return all your premiums and that too tax-free under section 80C of the income tax act!
- Stay Invested for an Extended Period
When you are researching the term insurance plan, you must always start early to enjoy the benefits of low premiums at a young age. Additionally, the longer you are invested in the term plan, the higher your returns will be. You can use the term insurance premium calculator to see how affordable your premiums will be when you select the maximum policy tenure!
There is a wide range of term plans out there that you can choose based on your needs. Simply use the term insurance premium calculator to check the affordability and compare policy benefits to make an informed decision. Online term insurance plans from reputable insurers such as Max Life Insurance allow you to review, compare and select policies that provide maximal benefits at cost-effective premium amounts.