Can you afford not to have term insurance plan?
‘Term insurance plans are not very beneficial because they don’t have a maturity benefit’. ‘I don’t need a term insurance plan because I already have planned for my family’s finances in my absence’. ‘Term plans are a waste of money because they don’t yield any returns’. These are some common sentiments which most of you have for term insurance plans. These beliefs make you abstain from buying a term plan. Are these beliefs correct?
Contrary to your pre-conceived notions, a term insurance plan is an absolute requirement. The financial security which the plan can provide cannot be found elsewhere. If you believe that the plan is not very important ask yourself the following questions. Find out if you can afford not to have a term plan –
Would my spouse be able to meet the financial loss associated with my death?
Couples create financial goals for their family and save towards achievement of those goals. If you are a single income family your spouse depends on your income for meeting the everyday expenses and planning for the future goals. In case of your premature death, the financial loss suffered is tremendous. Even if you are in a double income family, your spouse might not be able to supplement the loss of income caused by your death. You should, therefore, understand whether your spouse has sufficient financial resources to substitute your lost income if you die early.
In my absence, how will my family manage its lifestyle expenses?
Many of you have invested your savings and created emergency funds to take care of your family’s future financial needs. However, in case of your sudden death will these investments and emergency funds be enough to cover for your family’s expenses given that inflation is rising at a steady pace? would your investments be sufficient to meet your family’s expenses for years to come?
A term insurance plan provides you a common solution to all the afore-mentioned questions. By having low premium rates the plan allows you to buy a considerable sum assured. You, therefore, insure your life for a sufficient amount. In case of your premature death the sum assured is paid which, being of a considerable size, solves your family’s financial dilemma. Your family can use the plan’s benefits to pay for your child’s higher education, for meeting their lifestyle expenses, for giving your spouse the necessary financial support and also for paying off your liabilities. The plan, therefore, presents an all-in-one solution for all your financial needs. Doesn’t it, therefore, become important?
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A term plan is important and should form a part of your financial portfolio. If you are thinking of skipping out on the plan, revisit the above questions once again. I am sure you would be forced to accept the importance of the plan.
Here are some more questions which would force you to think twice if you want to avoid term plans
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Also, check out our video to understand Why you should buy term insurance plans