What is Term Life Insurance? Is it Worth Buying?

Is it Worth Buying a Term Insurance Plan?

It is always advisable to purchase a term insurance policy especially if you are the only breadwinner of the family. This plan helps you make sure that all the expenses are covered in case of emergencies.

However, it is important to make sure that you’re opting for the right plan as per you’re your requirements and lifestyle. Here are a few questions that you can ask yourself before buying a term insurance policy to make sure you’re making the right choice.

1. What is term plan coverage amount?

Plan coverage amount is one of the most crucial factors that you should consider while selecting a policy. This is the amount your nominee receives in case of uncertain situations. The amount should be able to support the regular needs of your family term insurance plan for emergencies or major expenses. The golden rule is that your term plan coverage amount should account for 10 to 15 times your annual income. When a person starts early, they get a number of choices with pocket friendly premiums.

2. What is term policy tenure?

Tenure of a policy is the duration which the policy covers. Generally, you can select a tenure ranging from 1 year to 100 years. It is always good to have the longest tenure. You must also check for the renewal options to avoid losing the policy.

3. What is term insurance premium?

The premium is the amount you pay towards the policy. There are single payment policies as well as regular payment policies.

4. What is term insurance policy term?

Policy term can be defined as the number of years you pay the premium towards the policy. When the term is long you can expect a high sum assured with a pocket friendly premium. So, you must always look for long term plans instead of short term. Most of the policies also provide Income Tax deductions according to Income Tax Act. However, tax laws are subject to change.

5. What is term insurance policy’s importance at a young age?

When you’re young, you do not have too many responsibilities. This is why, purchasing term insurance at this stage can help you get good coverage and other benefits at lower premium costs.

6. What is term life insurance policy’s role in married life?

Married life is full of responsibilities towards your spouse and family. Hence it is important to secure them financially.

7. What is term insurance advantage for new parents?

Becoming a parent is one of the most beautiful experiences you can have in your life. The bundle of joy also comes with great responsibilities. So, parents should be well prepared to take care of their little one’s finances. These plans can help in this by providing financial aid for their education, marriage and other major events, even in the absence of the life assured.