Term Insurance Your First Step in Financial Planning

Whether you are someone who is young and single with parents depending on you, or you are married with the responsibilities of your young ones, you have certain financial responsibilities and obligations – fulfilling the needs of the family, investing in your child’s further education, planning for a future home, saving for your child’s marriage, etc. All of us plan our savings well in advance towards any such goals. However, any such planning towards these goals can fade away if the income-earner of the family were to be no more. For this same reason, every individual must hold protection. Term insurance is a cost-effective way of financially securing your loved ones.

A term insurance policy is the simplest kind of life insurance. In such a plan, the insured pays a fixed premium in return for a pre-specified amount of money from the provider to the appointed nominee in case of the demise of the insured during the term of the policy.

The sooner you buy an insurance policy, the better it is for you. Ideally, a life cover should be bought as soon as an individual starts earning a stable income. Many of the young people out there are led to believe that they do not need a term insurance plan or any kind of life cover at an early stage of life. However, with the lifestyle prevailing in people these days with a great deal of stress, lack of exercise, and not a very well balanced diet, it is important to be prepared well in advance. There is no product in the world that can cover the loss of a loved one, but a life cover helps in relieving your loved ones of the financial burden that may occur if the breadwinner of the family is to be not around.

Financial protection is required for two main reasons – to secure future income and to cover any liabilities. As individuals, we all have future goals. Be it buying a home, or a vehicle, etc. Many of us end up availing a loan to fulfill any such aspirations. There is a possibility that during the repayment period the earning member is not around. It is a huge financial burden to leave any outstanding liabilities on for loved ones. A term insurance plan comes into the picture here and can provide stability to your family financially. This can be best achieved by securing your income by purchasing a term plan.

An important thing to remember is, as you get closer to your retirement age, the need for coverage reduces. Therefore, the ideal term of the policy should be up until the retirement age.

It is important for individuals to be completely transparent and disclose all the relevant information to the insurance provider. This is important in order to ensure that your nominee or nominees do not face any complications in the future while settling the claim.

Term insurance plans are offered by numerous lenders in the market. Which is why most of us end up getting confused. It is important to remember that buying the cheapest insurance, or the first policy that catches your eye is not the option. You should thoroughly compare across the providers and choose the term insurance plan that adds the most value as per your needs and requirements.

To further conclude, it would be appropriate to say that a term insurance plan is the first step to building a financial plan.