Reviewing a term insurance plan as per your financial needs will help you stay aligned on your track to achieving your life goals. Generally, we don't consider reviewing the term insurance policy once we buy it. Term insurance is bought to protect the financial needs of your family. Upgrading the plan from time to time will address the ever-changing protection needs.
Financial advisors recommend reviewing the life insurance policies every year. The primary reason is the policy you had bought a few years ago may not align with your future needs.
Listed below are five reasons you should review your term insurance policy:
There can be times when your term insurance may not cover all the risks for which you seek protection. Term plans offer in-built optional cover or riders. You can add riders to your existing term plan to enhance the protection you are currently getting.
Let us consider an example to understand this more clearly:
Some had a term insurance plan when he was single and working. 5 Years later, he got married. He wanted to add his spouse to the same policy. He opted for a spouse cover, and his wife was added to the same policy.
Some didn't had to buy a new term plan for their spouse as the current plan had the option to cover their spouse too.
With increasing responsibilities, the need for protection will also increase.
A policyholder has to choose beneficiaries while buying a term plan. Beneficiaries, otherwise known as nominees, will receive the death benefit of the term plan. What if the nominee passes away? In such a case, the policyholder has to nominate new beneficiaries.
When the income increases, so as the lifestyle needs. As the standard of living changes, the level of protection will also increase. With an increasing income, you should keep increasing the term cover, so that it aligns with your life goals.
Read more about - increasing cover option in a term insurance plan.
Buying a house has always been one of the common financial goals and probably the biggest financial responsibility. Not everyone have the privilege of buying a house without taking out any loan. We often opt for a home loan to achieve this one milestone in our lives. Ever thought what will happen to your loved ones if something happens to you in between the loan term? A term insurance plan will help the family members pay off the debt that you have. Your family members do not have to go through the financial trauma once you pass away.
Sometimes while looking to cover our protection needs, we often forget to consider inflation which may impact the size of the corpus we have thought of building. The size of funds you save today may not be sufficient 10 years later due to inflation.
You should buy a term insurance plan that allows you to fight inflation.
Canara HSBC Life Insurance iSelect Smart360 Term Plan offers Block your Premium option. With this option, a policyholder can block the premium rate at inception and increase cover up to 100% of the base sum assured in the next 5 years.
Switching your term insurance policy may help you find an effective plan that offer high coverage at low premium with other benefits. For example, you get married, you can add your spouse to the same term insurance policy, which will make it easier for you to manage and track your policy. The same policy may not keep up with your changing needs for years to come. Therefore, it is best if you update or revise your policy as per your financial needs.Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised to exercise their caution and not to rely on the contents of the article as conclusive in nature. Readers should research further or consult an expert in this regard.