Unable to Choose Term Plan Duration? Know This
Term insurance acts as a shield to protect your family’s financial future after you. As a life insurance product, it has been designed to help your family members handle the financial aspects of life without worries. If one of your life’s objective is to make sure your loved ones will never have to face a financial crisis, buying the best term insurance policy should be a top priority.
When it comes to buying the best term policy in India, it is essential first to understand term insurance meaning so that you can select the right plan for your loved ones. However, there are people many who feel confused about the term plan duration or tenure to opt for. It is the duration for which you choose to pay the premium for a term insurance policy. While some people think of choosing this premium payment tenure to be a part of the working years, others prefer a shorter one to end the responsibility of paying the premium in less time.
Select the right tenure of the best term insurance policy using the following tips:
1. Consider Your Age
Before buying the best term insurance policy, you must know the correlation between age, term plan tenure, and premium payable.
- The longer tenure you choose, the lower will be the term plan premium based on a specific sum assured.
- The earlier you buy the best term policy in India, the lower will be the premium.
Merge these two aspects, and you will realise that a term policy bought at a young age for a long tenure, say 40 years or more, can be purchased at a budget-friendly premium.
Also, the insurance companies make a term plan available to individuals based on their age. For instance, a 50-year old man cannot buy a term policy with a 50-year tenure. Therefore, if you are young, in your 20s, it is the right time to buy a term plan with a tenure of around 40-45 years.
2. Assess Your Financial Liabilities
Take an example of Mr Vyas, a 30-year old banking professional who draws a salary of 50,000 per month. He is the sole breadwinner and provides for his spouse, children, and parents. Because of the increasing financial needs over time, he borrowed a home loan to buy a new house, and a personal loan to fulfil the cost of children’s education. Since most of his income goes into paying the EMIs of existing loans and meeting household needs, he could not think right about choosing the best term insurance policy for a specific tenure.
Like Mr Vyas, many earning individuals found themselves under the burden of existing financial liabilities. If you have also borrowed short term loans, you must prevent the burden of their EMIs from falling on your loved ones. This can be done by selecting an apt term plan with a tenure that corresponds to an affordable EMI. Keep in mind that your choice of a term plan should not worsen your financial condition.
3. Look for the Flexibility to Choose a Term Plan Period
Most people only know about term plan tenure as the period for which they have to continue paying the premium. For example, if an individual chooses a term plan with a 40-year tenure, he can only think of paying the premium for the next 40 years. What they do not know is that many insurance companies offer the choice of opting for a lower payment tenure while the policy continues for a longer period.
The availability of such options may vary as per your age. Make sure you check the terms of the best term insurance policy before buying it.
4. Ponder Your Lifestyle
In general, the longevity of life depends on the kind of lifestyle we follow. With a healthy lifestyle, one can cross the 100-year mark easily, while an unhealthy one increases the risk of loss of life at an early age.
The sole purpose of buying the best term insurance policy is to benefit your loved ones after you. It implies that the term plan tenure you choose must be based on the kind of lifestyle you follow. The truth says you know better about your health and lifestyle than what anyone else could tell. So, make the right decision accordingly.
Overall, term insurance plans provide adequate coverage at a reasonable price. It is, however, crucial that you analyse various aspects of life before selecting a particular term plan and a premium payment tenure. So, be smart when you plan to buy a life cover for yourself.