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Term insurance – a need for every individual

It may sound absurd when advised to buy a term insurance policy at the early stages of your professional career, but investing in one would probably be one of the best financial decisions that you would make for your future.

 A report published by the Transport research wing under the Ministry of Road Transport and Highways on Road Accidents in India for the year 2016 shows an alarming rate of death due to road accidents in India. From the data available in the report, about 413 people die every day in 1317 road accidents. Furthermore, a study published by the Global Burden of Disease 2016 published in Lancet indicates over 6 million deaths in India in the year 2016 alone due to non-communicable diseases. So if you happen to be the sole bread winner of your family, securing your family from the severe financial instability that seeps in in case of any eventuality leading to your death or permanent disability, becomes even more crucial.

To secure your family from the financial debts, expenses on household living, children’s education and to help them carry on with their lifestyle it is very important for one to start planning at an early stage for a term insurance cover. Some of the reasons why a term insurance is a necessity for every individual are:

  1. As discussed, securing your dependents while you are gone is every individual’s responsibility. Whether it is providing your better half with the much needed financial support after your demise, funds required to educate your children or meet the day to day expenses of your dependents in absence of a constant source of income, term insurance plans cover them all by providing the dependents of the insured a lump sum amount as promised in the plan immediately after the demise of the policy holder, upon claim.
  2. With the accepted uncertainties of life, one cannot really predict death or any eventuality. The financial crisis that befalls your dependents due to any ongoing loans or debts causes havoc. A right term insurance policy takes care of all your dependents’ needs in your absence and provides them with a stable life after you are gone.
  3. Term insurance plans come with a nominal premium amount to be paid for certain number of years. Once you have taken care of the financial stability of your dependents by opting for a term insurance policy, it leaves you with enough flexibility to focus your attention towards other needs or loans and helps you plan better for your retirement.
  4. The reason for buying the term insurance policy as early as possible and while you are still single and in the best form of health is that the premium paid is much lower and you get adequate coverage. As you grow older, the chances of falling sick and having ailments increases, thus increasing the premium amount.
  5. Of the main advantages that novices as well as seasoned investors look for from a term insurance policy is the benefit of tax saving. The premium paid towards a term insurance policy is eligible for a maximum tax benefit of INR 1.5 lakh under Section 80C of the Income Tax Act, 1961.
  6. Riders available with almost every term insurance plan provide support with all medical expenses and expenses made towards lifestyle changes due to disability or treatment for a majority of critical illnesses.

Thus, a term insurance provides the policy holder with a peace of mind that after his or her demise, the dependents are secured enough to never face any major financial crisis.