When you tie the knot, you enter into a completely new chapter of your life with your loved one. As you start your newly engaged journey together, you’ll likely spend weeks or even months planning the perfect wedding to engrave these memories in your hearts. One of the common responsibility that comes with reaching this life stage is planning your finances.
Understanding financial planning and analysis at this level will help you invest wisely and secure your financial future. Preparing a financial checklist as newlyweds? Have you added a term insurance plan to it?
Why should you consider including a Term Plan in your Financial Planning Checklist?
With a term insurance plan, you get a life insurance policy for a set duration offering financial security to both you and your loved ones, in case of an unfortunate loss. Term insurance can help you deal with the challenges as well as help you overcome any financial hurdles that might crop up. You should have a plan to deal with these contingencies and a term plan can be one of the suitable ways to prepare for these unforeseen twists in your life.
● Gives you financial security:
The financial impact that sudden death or chronic injury can have on your life is catastrophic. In case this was to afflict you or your family, term insurance can prove instrumental in offering you the financial security you are seeking. In case the policyholder was to pass away while the policy remains active, the sum assured will be paid out to the nominees, provided all due premiums are paid.
● Can be customised to your life goals:
You can easily customise your term plan to align with your changing life goals. As newlyweds, your lifestyle might change resulting in more expenses.
● Includes your spouse in the same policy:
Most term plans allow you to add your spouse to your policy at a budget-oriented rate as per policy terms & conditions. In other words, you need not buy a separate term policy for your spouse but, instead, add them to your policy as well, which will not only save your money but also your effort and time. Paying premiums for just a single term plan (having both you and your spouse covered), is also convenient to follow up on regularly over the long term.
A flexible term plan can enable you to keep up with these expenses by increasing your sum assured at various life stages. Your lifestyle may change in the coming years leading to more expenses. This might also help you beat inflation in the coming years.
● Gives you additional protection with riders:
To maximise the benefits, you can receive from a term insurance plan, you have the option to add riders to your policy by paying nominal extra premium. Options include critical illness riders, accidental death, accidental disability, and more. Choose riders that will suit your needs for protection and make your term insurance plan work for you.
The Basics of Financial Planning
Financial planning is a science. You need to have the ideal ratio of insurance, savings, and investment to secure your financial future together, especially when you can no longer depend on your parents or relatives for your financial wellbeing. Just saving money is not the only way for one to be financially healthy. When you purchase a term insurance plan, you protect your loved ones from sudden shocks that can derail finances. You also get to be financially secure in case your savings fall short by investing in other avenues. At the end of the day, build a strong portfolio that works for your risk appetite to cushion yourself against potential financial shocks.
Opting for a term insurance policy is wise as it is one of the most useful financial tools out there. As your term insurance premiums will be dependent on your age, the younger you are when you purchase one, the lower the premiums are likely to be. So, it is a preferable to consider purchasing a term insurance policy as early on in your life as possible.