If you want to seriously take care of your wealth and family, you need to start with a serious financial plan. However, while you take the first few steps towards planning, you cannot hope to leave your family financially exposed. So, what can you do to ensure financial safety for your family while you perfect the plans for them? When you start searching for financial instruments, the first thing you may come across is a – term life insurance. This is one of the most popular life insurance plans that people are buying to secure the future of their family by paying affordable premiums.
However, before you decide to buy a term plan online, here are 3 things that you must keep in account to choose the best one available:
1. Right Time to Buy
Ideally, an insurance policy should be bought soon after you start earning. Another reason to buy term insurance at a young age is the low premium value in comparison to life insurance. However, just in case you have missed the best time to buy a term cover, the second-best time is now. The crux of the matter is term insurance is a financial need, not a goal or a choice. Without term insurance cover, your family may suffer a financial and social setback in case anything happens to you.
So, once you have started to take care of their wellbeing and goals, term insurance will give you peace of mind.
2. Growing Term Insurance Cover
Another thing you need from your term insurance cover is the ability to grow with your life, especially if you are an early buyer. Of course, your present income will not always remain the same, as well as your lifestyle.
Your term insurance needs to keep following the trajectory of your personal financial growth. Thus, to keep your family adequately covered, you will have to choose one of the following options:
1. Buy a new term plan every few years or after a major financial change in your life
2. Buy a term plan which can grow as your life grows
Buying a new term cover every few years has a few drawbacks. One, you will need to complete the application process each time including the medical check-up, and two, your premium cost will increase each time you add a new life cover.
However, if you have the option of increasing your existing life cover policy, you can avoid the tedious application process and save money. iSelect Star term plan from Canara HSBC Oriental Bank of Commerce Life Insurance gives you the following two options to avoid buying a new policy:
- Continuous growth option: The sum assured keeps growing every year at a fixed percentage until it becomes double its original value.
- Life-Stage Growth Option: You have the option of raising your life cover after the following life events:
- Purchase of your first house with a home loan
While you must adopt the first option at the time of purchase, the second option is always available to you under a normal iSelect Star term plan.
3. Additional Covers you Need
While term insurance is important, there are other risks that your insurance should cover you from. Fortunately, you can add these additional covers to your term insurance plans including the iSelect Star term plan:
- Terminal Illness Rider: Provides financial support to your family in case of diagnosis of a terminal illness like cancer, renal failure, etc.
- Accidental Death: Accidental death can increase the financial burden on your family of recovering your body, or hospital expenses. Thus, adding an extra amount is helpful.
- Accidental Disability Cover: Disability can affect your capacity to earn money. So, while you get back on your feet your term cover should continue. This rider allows a premium waiver in the event of a severe disability.
If you need more time to explore different options and make up your mind, start with the Saral Jeevan Bima. Then find the term insurance plan that suits your family‘s needs perfectly.
Get a Saral Jeevan Bima Cover
Saral Jeevan Bima is a standard term life insurance plan launched by IRDAI to serve the need for financial safety. The USP of this plan is that no matter where you buy this plan, the features and benefits are going to be the same.
So, you can get this plan even before you have time to search for other term insurance plans. Other features of this plan include:
- Accidental death cover during the 45-day waiting period
- Zero exclusions to the death claim except for suicide within the first 12 months of the policy
- The identical premium for the same sum assured (the difference will be there due to individual risk factors such as occupation, smoking habits, etc.)
The plan does not provide other riders and covers. So, you will still need a basic health cover and Mediclaim to ensure financial support during a medical emergency.
Once you have secured the basic life cover and health covers for your family, spend some time learning about term insurance options. Here are a few details to help you start.
Is it Worth Buying a Term Insurance Plan?
Term insurance is an inexpensive alternative to take care of your family's financial needs in case of your untimely death. The term insurance offers a large financial cover for a long period such as 30 to 40 years. However, you might ask if you need a better and bigger term insurance cover since you already have a Saral Jeevan Bima.
Once you have planned your family’s goals and needs, you will get a clearer picture of why Saral Jeevan Bima was only a small part of it. Here’s what your term insurance cover needs to provide to your family:
- Adequate funds (or a long-term regular income) to take care of household expenses
- Funds to meet or pay off ongoing debt
- Sufficient investment money to meet important future goals such as child’s higher education, marriage etc.
If you are the primary financial decision-maker in the family, you need to get a term insurance cover that can take care of all three. Adequate term insurance cover is 10-15 times your annual income. Generally, by any estimate, this much life cover is sufficient to take care of your family’s most important goals and needs.
Also, if you encounter other important life goals for your family, you can invest using life insurance plans like ULIP and savings plan. This way you can ensure the goal achievement and keep it covered from your untimely demise as well.