Guide to Securing Your Family With Term Insurance

Family finances are one of life's most important responsibilities, especially if you are the only breadwinner. But what if an unexpected event means you're no longer there?

That's where a term policy comes to the rescue! With term insurance, you can make sure your loved ones are taken care of even in your absence.

Although nothing can replace your presence, we understand the crucial role money plays in our lives. You can purchase term insurance to ensure that your family's financial needs are met after you are gone.  Term policies are an excellent way to make sure your family's future financial needs are covered.

In this article, we will explore some of the ways a term insurance plan can help you provide for your family, even if you aren't around.

Benefits of Buying a Term Insurance Plan

1. Death Benefits for Lowest Premiums

It is important to remember that term life insurance policies offer the highest death benefits for the lowest premiums at the first purchase. The premiums may or may not increase with renewal, but whole-life insurance policies may be more costly for long-term coverage purposes.  

2. Best Option for Short Term Needs

Term life insurance is a great option for anyone who needs temporary life insurance coverage. A term policy is typically best suited to individuals requiring protection for less than ten years. For those who need coverage for more than ten years, a cash-value policy might be more effective.

For individuals seeking coverage for 10 to 15 years, it is important to consider their individual circumstances before making a decision. As a general rule, term plans are a better option for individuals under the age of 45 if the policy term is between 10 and 15 years. For the same duration of coverage, older individuals may be better off with cash-value insurance.

3. High Insurance Cover

Term plans offer higher insurance coverage, even with a relatively lower premium. In the unfortunate event that the policyholder passes away, the family member or nominee receives the insurance coverage.

Policyholders can feel secure knowing that their families will be supported in their absence as the payout can help cover educational and marriage expenses. 

4. Youngsters May Get Higher Coverage at a Lower Immediate Cost

Youngsters can choose to get more insurance coverage than they currently need, even if it costs them less at present. These plans prove to be a boon in the future as their needs and responsibilities change and increase.

5. Safety Against Liabilities

Young professionals are quite accustomed to taking out loans when it comes to buying homes or cars. It is important to consider how your family will repay the loan if you are no longer around. A term life insurance policy can provide added protection for your family in such a situation. Insurance can provide your family with the finances required to pay off your outstanding loans, protect your assets, and maintain your family's current lifestyle without compromising their financial security.

6. Critical Illness Coverage

Healthcare expenses in the country are on the rise.  A serious illness like cancer or a heart attack can cause significant financial strain for a family. There are now some well-known term insurance products that include critical illness coverage. If a policyholder is diagnosed with a critical illness, this add-on feature allows them to receive a lump sum payment. The cost of this type of coverage is higher, but it does protect your family from hefty medical bills.

When to Get Term Insurance?

The best time to opt for a term insurance plan is when you start earning because premiums for term insurance are the lowest during this period. Even if you do not have dependents now, buying a term insurance plan is still a wise decision since premiums tend to increase with age.

The sooner you purchase term insurance, the more affordable the premiums are, and the more secure your loved ones' future will be.

Wrapping Up:

Although term insurance is popular for its affordable premiums, it is important not to overlook the other benefits. The terms and conditions of an insurance plan can vary, and even small changes can have a significant impact later. You should do an extensive study on the various term insurance plans offered by various insurance firms before making a decision. You should also evaluate the riders on offer and select wisely.

5-Year Term Life Insurance Policy in India

We all want the best for our families when it comes to health or lifestyle. Life-changing events can put stress and financial strain on your family, especially if you are the breadwinner.

In these circumstances, Term Insurance Plan is an effective way to ensure the financial well-being of your loved ones. With term life insurance, a lump sum is paid to your family in the event of your unfortunate passing during the policy term. It provides financial stability and support at a crucial time.

What is a 5-Year Term Plan?

Term insurance for 5 years provides coverage for a five-year period. In addition to annually renewable term insurance, insurers also offer this coverage option. Such a plan works well for individuals who only need short-term coverage or those who are unsure of how much coverage they need.

Term insurance provides coverage for a shorter period of time than life insurance policies. You should carefully evaluate your insurance requirements and select a policy that meets your needs.

How does this plan work?

Buying a five-year term insurance plan is not complicated. The only thing you need to do is purchase the policy and pay the premiums either all at once or as needed.

Before allowing you to purchase a 5-year fixed-term life insurance policy, insurance companies consider a number of important factors. These include age, gender, family history, current health and medication, state of residence, tobacco use and other lifestyle habits, and the death benefit amount.

The above information determines the premium amount the policyholder must pay. The nominee receives the term insurance payout in case of the policyholder’s unfortunate demise during the policy term. If the policyholder survives, the term plan does not offer a maturity benefit.

 

Key features: Term life insurance

Death Benefit: 

A term life insurance policy with a 5-year term provides a death benefit to the policyholder's beneficiary if an unfortunate event occurs during the policy term.

The death benefit is equal to the sum assured selected at the time the policy was purchased and provides peace of mind to the policyholder and their dependents.

Lower premiums for certain groups: 

Even if you are a smoker or tobacco user, purchasing a term life insurance policy can be beneficial as it allows you to enjoy lower premiums compared to whole-life policies.

Also, many insurance companies offer lower premiums for female policyholders to ensure that coverage is accessible and affordable to all.

Additional supplemental insurance: 

To increase the coverage and protection of your existing term life insurance policy, you can opt for add-ons or riders. These riders provide additional coverage and help meet your specific needs.

Tax benefit: 

If you opt for a term life insurance policy of 5 years, you will also get tax benefits under Section 80C and Section 10(10D) of the Income Tax Act 1961. This will not only provide financial protection to your family but also help you save on taxes, making it a wise investment decision.

Smart planning: 

Planning for the immediate future can be made easier with a 5-year fixed-term life insurance policy. It provides peace of mind during the policy term.

Limited premium payment option: 

Many insurance companies offer a limited premium payment option that allows you to pay premiums for a fixed term until age 60. This flexible payment option helps you plan your finances better and ensures that you do not have to worry about premium payments after a certain age.

To summarise:

Are you worried about the financial security of your loved ones? We can help put your mind at ease! HDFC Life Click 2 Protect Super is a plan tailored to meet your needs. With the option to customise coverage with add-on riders, you can extend the coverage of your policy at an affordable rate.

Can I Hold Multiple Term Insurance Policies?

Yes, you can have multiple Term Insurance Policies. While many people are covered by one term insurance policy, multiple policies can be useful after a certain life event to help with your estate planning. 

Having a backup plan to safeguard your family's future is more important than ever in today's unpredictable times. A term plan provides an affordable and effective way for you to ensure financial security for your family. When you buy a term plan, you ensure your family's financial future remains secure in case of an unfortunate event. With the right riders, a term plan can also help you after the diagnosis of critical illnesses such as cancer and heart disease. 

However, a major concern is whether having more than one term of insurance coverage is appropriate or recommended.

What Is Term Insurance and Why Should You Consider Buying Multiple Term Insurance Policies?

Term insurance is a wise investment that secures the financial future of your loved ones. Having multiple policies can provide better coverage. It's crucial to consider the terms and conditions of each policy before purchasing one and be sure to disclose all previous policies when applying for a new one.

With multiple policies, you can ensure sufficient coverage for changing financial needs at different stages of life. Nonetheless, non-disclosure or misrepresentation can lead to claim rejection.

How to Decide Whether It Is Necessary to Buy Multiple Term Insurance Policies?

It is important to consider a few things when deciding whether more than one term life insurance policy is necessary.

First and foremost is the amount of coverage that you need. It is important to ensure that your family would be taken care of financially if something happened to you. Having multiple policies with different coverage amounts can leave you with sufficient overall coverage.

In addition, determining whether you can afford multiple policies is another thing to consider. On a budget, it might not be possible to purchase more than one policy, and you'll have to weigh the benefits against the cost. Also, you should consider whether you will need coverage for different lengths of time.

Benefits of Getting Multiple-Term Insurance Policies

● Human life value:

Human life value is the amount of money an individual is likely to earn during their lifetime and helps in calculating how much life insurance to purchase. In addition to receiving the combined benefits of both policies, a life insurance policy with a fully human life value will ensure your family gets the full value of your life if something happens to you.

●  Additional responsibilities at every stage:

Although term insurance covers you for a limited period of time, as you age, you will experience additional responsibilities as you reach certain milestones. Investing in more than one term plan ensures wholesome protection to deal with these responsibilities.

● Enhancing with a rider:

A rider can help strengthen an existing policy at a nominal additional cost. You can opt for different rider options when you purchase more than one term insurance policy for comprehensive coverage. Term insurance can be combined with multiple add-ons to get the benefits of different policies because each insurance provider has different rider options.

● Increase your chances of successful claim settlement:

You have twice the chance to get a term insurance payout when you have two term insurance policies. If one insurer rejects the claim for any reason, the family can use the second policy to get the sum assured payout.

● Differing Maturities:

You should choose a term plan that aligns with your changing financial goals and priorities as you move through different life stages. Your goals will be different at 25, 40, and 50. A term plan that aligns with your evolving liabilities and requirements will help you make the right decision

● Reduces the chances of claim delays or rejection:

By spreading the risk across multiple insurers, the risk of rejection or delay of claims is reduced. Having more than one insurer reduces the possibility of having the same concerns in all plans, but withholding critical information unintentionally can result in claim rejection or delay. It's essential to disclose accurate information at policy inception.

Conclusion:

When purchasing two-term life insurance policies, you can attain enhanced financial protection and increase your beneficiary’s chances of receiving a claim settlement. Always disclose all information from your existing policy before purchasing another.