Term insurance is the simplest and purest form of life insurance, which provides the policyholder with financial coverage for a fixed period in exchange for a fixed premium – hence the name ‘term’ insurance policy. Choosing and investing in the right term insurance plan is extremely important for people who have dependents and the right term insurance plan offers protection as well as value for money. The premium of the best term insurance plan you choose depends on various important factors including age, gender, premium payment term, policy term, sum assured, etc.

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What Is Term Insurance?

Term insurance is a pure life insurance product, which provides financial security to the policyholder. On the death of the insured during the policy term, the beneficiary receives the death benefit as defined under the term insurance plan chosen.

Example: A 24-year-old healthy, non-smoking male has a plan of Rs 1 crore for his dependents for the next 25 years. If he buys a term insurance policy, he will have to pay only Rs 702 per month excluding taxes (premium for Max Life Smart Secure Plus plan).

Why you should buy term insurance

People from all walks of life understand the importance of buying a term insurance plan that best suits their needs. With the fast-paced life and increasing uncertainties in the form of the Covid-19 disease, every family needs financial protection under a term plan to deal with the financial impact after losing a loved one, especially the breadwinner. It also helps the family repay loans like car loans and home loans.

Here are some reasons why buying term insurance is important:

Being the earning member of your family, you are responsible for the overall well-being of your spouse, parents and children. Buying term insurance is important to ensure that you fulfil your obligations towards your loved ones even when you are not with them or around.

You may have acquired assets like a home, office or vehicle by taking a loan. By carrying a term insurance plan with you, you can ensure that your loved ones do not suffer after you due to the burden of these loans.

The unfortunate death of the breadwinner in the family can make life difficult for the family members. Even though the best term plan cannot bring back the departed loved one, it can help mitigate the financial hardship of the family.

Life is full of uncertainties. This is clearly evident in the wake of the coronavirus pandemic. The best term plan can keep us financially prepared for the various adversities of life.

Who should buy a term insurance plan?

Death, disability, illness, all of these are rarely discussed. However, these three are realities that you certainly cannot ignore. Term insurance is an instrument that can protect you and your family from financial hardships caused by these three and similar devastating situations.

So, people who have financial dependents should buy a term insurance policy. They could be:

The term policy will act as a source of financial support for the children, ensuring that they are not deprived of the opportunities life has to offer.

Young professionals who have multiple financial responsibilities can benefit from low term premium insurance plans.

You can secure your spouse’s financial future with a term insurance plan, giving them a truly long-lasting gift.

For example, there is a family of four, where the father is the main earner and he has bought a term insurance policy. The family needs around Rs 50,000 every month to meet regular expenses like rent, food, other groceries, electricity, water, education fees, etc. This is in addition to any loans taken.

In case of an unfortunate event, life goes on and so do essential expenses. The family will still need Rs 30,000 to Rs 40,000 per month to meet all their needs. Here, an adequate term insurance cover comes in handy. It provides the family with the following:

Loss of life and property cannot be compensated. But, a term insurance plan can help meet the financial needs of the family.