Are you confused about choosing Term Plan duration? Know how you can do it
Currently, India’s insurance penetration is at 3.7 percent of the gross domestic product (GDP) as against the world average, which is 6.31 percent.
This perhaps means that people still not believe in investing in insurance products probably due to lack of knowledge. Term Life Insurance is one such affordable tool that safeguards your family’s future financially when you are not with them. As a life insurance product, it is intended to help your loved ones handle their expenses without any stress. It has been explicitly designed to cater to the needs of your loved ones in your absence.
However, while buying a term insurance policy, it is necessary to comprehend its meaning correctly so that you choose the right term plan for your family. It is that tenure for which you pay the premium for a term policy. But people often get confused while selecting their term plan duration. While some feel it should be till the working years, others prefer term insurance with a shorter tenure so that they have the responsibility to pay premiums for a lesser period.
Therefore, to select the right term plan tenure here are some useful tips for you to follow:
- Take note of your Financial Liabilities: In today’s time almost, everyone is burden with EMIs of their home loan, personal loan, car loan, education loan or more. Loans have become a necessity to fulfil one’s requirements or dreams. Since a significant part of salary goes into paying EMIs along with family’s needs to cater and bills to pay, therefore with such liabilities buying term insurance considering the right tenure gets ignored. Thus, in such instances, you should take care that the weight of EMIs doesn’t fall on your loved ones in your absence. This can be possible by choosing appropriate term life insurance but remember your chosen term plan should not affect your financial condition more.
- Think about Your Age: Before you decide to buy term life insurance, you must know the connection between your age, duration of term insurance and the premium payable. Early you buy a term insurance policy in your life; lower will be the premium that you need to pay. Also, the longer your policy tenure, lower will be the premium based on a specific insurance coverage amount. If you connect these two aspects, you will understand that a term plan purchased at a young age for a longer tenure say for 40 years or even more can be bought at an economical premium. On the same lines, insurance companies offer term insurance policies to the applicants based on their age. For example, a 50 or 60-year-old applicant cannot get a term plan with tenure spanning to 40 years. Whereas if you are in your 20s, then you can easily get a term policy with a duration of around 40-45 years.
- Look into your Lifestyle: All said and done, our life span relies upon the sort of way of life we choose to follow. With a healthy lifestyle, one can expect a longer life, whereas unhealthy practices increase the risk of uncertainties in life. The main objective of purchasing a term life insurance is to secure your family financially in your absence. It infers that the term life insurance you select must be focussed on the lifestyle you follow. The fact is that only you know better about your lifestyle practices and health; thus, you should make the right decision of buying the term plan rather than anyone else.
- Search for a flexible policy term: The vast majority of people think about term plan tenure as the period for which they need to keep paying the premium. For instance, if an individual picks a term insurance policy with a 40-year term, then he or she just has to consider paying the premium for the following 40 years. What many people don’t know that numerous insurance providers offer policies with lower premium payment tenure; however, the policy continues for a longer period. The accessibility of such choices may vary according to your age. Ensure you check the details of the term insurance before getting it.
Overall, term policy gives sufficient insurance coverage at a reasonable cost. However, it is essential that you examine various aspects of your life before you opt for a specific term plan and a premium payment tenure. If you need some guidance on the same, you can speak to an insurance expert. To do so, you can visit BimaKaro.in and request a callback. Make a wise decision today for a better and secured tomorrow.