The primary purpose of purchasing a term life insurance plan is to provide a robust financial safety net to your loved ones, so that they have enough money to take care of their needs, in case of your untimely demise. While selecting the term plan cover, however, many people choose the term insurance cover of Rs 1 Crore, because they believe that an eight-digit figure will be the right coverage for them. Even though this sum of money is sufficiently large, you need due diligence upfront to make sure that you have got the math right.
Essentially, iSelect+ Term Plan is a pure life cover policy, under which you choose an adequate cover amount that covers your existing liabilities and future financial needs. Subsequently, you agree to pay a pre-determined amount of premium for a specific number of years. On the other hand, the insurance company promises to pay the cover amount to your family in case of your unfortunate demise within the policy period.
There are usually no maturity benefits paid under a term life insurance plan; however, they provide a higher coverage against lesser premium payable than the other life insurance products available. To choose the right cover amount under iSelect+ Term Plan, you need to consider the following factors –
Here it is essential that you consider making a few assumptions and be conservative in your estimates regarding how much term insurance cover will be right for your family. Hence, for example, if you think that your family will need a sum of Rs 60,000 in monthly expenses, you must nevertheless estimate the monthly costs to be Rs 70,000, while calculating the term cover.
Overall, while determining the right term life cover for your family under iSelect+ Term Plan, you must factor in liabilities such as home loans, credit cards, and any other money that you owe to others. Moreover, you must consider adding any investments that you may have made over the years, such as provident fund, mutual funds, fixed deposits, and real estate, so that your family can access these assets upon your demise.