Death is inevitable. As the sole wage earner of your family, it is important to have the right financial resources in place including life insurance to make sure your loved ones are financially protected even if you are no more among them. Oftentimes, having a savings account may not be sufficient for your family to fulfill their financial needs especially if there are some major dues like a home or auto loan. This is where having the right life insurance policy comes into play and offers your family financial protection.
This is where a term insurance policy plays an important role in giving your family the financial security they deserve. In the event of your untimely demise, the benefits received from the policy can help the family deal with the financial losses.
Since there are two most popular types of insurance 1) whole life insurance 2) term life insurance, we will discuss how term life insurance sets you free by providing your family with enough coverage.
What is Term Life Insurance?
Term insurance is a type of life insurance that offers coverage against the uncertainties of life for a set period of time. You can choose a particular tenure and sum assured when buying term insurance. In case you pass away during the policy, the insurer will pay the sum assured (also called death benefit) to the nominee.
Here we will have a look at the benefits of a term insurance plan and how it offers a sense of financial freedom.
Term Life Insurance Offers Adequate Coverage
A term life insurance plan not only provides protection from early death but also offers coverage in case of serious health issues like cancer, and injuries caused by accidents. It offers adequate coverage to help your family meet their financial needs even if you are not around. The death benefits can be utilized on several things like funeral costs, home loans, and mortgage repayment etc.
It is affordable
Investing in a term life insurance policy is the best way to get enough financial protection without paying expensive premiums. The premium of a term insurance policy is lower than other insurance plans. This means anyone (even 30 years old) can buy term insurance plan to offer greater financial coverage to family.
Provides monthly income to the family members
Usually, term insurance plans provide a lump sum amount to the nominee upon the death of the policyholder. And if it is difficult for the family to manage that larger sum, the nominee can choose between a lump sum amount and monthly payment. One cans also get 50% of the payment in one go and the remaining as equal monthly payments. Term insurance comes with plenty of flexible options along with enough coverage to support your family in your absence.
Along with offering greater financial protection to your family, a term insurance plan also helps you save a big deal of money in terms of tax. The premium a policyholder pays for this type of insurance is eligible for tax deduction. Furthermore, the amount received from the insurer as a death benefit is also exempted from tax.
Return of premium option
Unlike other insurance policies, the term insurance policy doesn’t provide return on investment. Hence, if you don’t want to keep your plan continue, you can opt for a return of premium. In this way, you can get the premium back that you have paid towards your term life insurance plan.
Accelerated death benefits
At some point in your life, you might suffer from critical health issues and the medical treatments can easily exhaust your entire savings. This is where term life insurance with accelerated death benefits can offer you greater financial support to fulfill your medical costs. So, make sure you buy a policy with accelerated death benefits so you can access your death benefits even if you are alive.
With plenty of term insurance plans available these days, choosing the right type of insurance plan is important. That’s why, you should look for several insurance offers, their benefits, premium amount and duration to make right insurance buying decision. Use of a term insurance premium calculator is another best way to calculate the premium amount you will be paying.