Life Goals Loading…

12 Blue cross

Notifications12

  • The Most Comprehensive Tool To Plan Your Child's Future

    START NOW
  • Get Promoted to Your Dream Role Post Retirment

    WATCH VIDEO
  • Enjoy Guaranteed* Life-Long Income with Bajaj Allianz Life Guaranteed Pension Goal

    KNOW MORE
  • There is lot to remember in Life, Set renewal premium payments to Auto Pay

    WATCH VIDEO
  • Get Life Cover worth Rs.1 Crore at Rs.21 per day2 – Bajaj Allianz Life Smart Protect Goal

    CALCULATE NOW
  • Fulfill your Life Goals with Bajaj Allianz Life Goal Assure

    KNOW MORE
  • Life Insurance Term Plan with Return Of Premium

    WATCH NOW
  • Get your Life Goals Done with Bajaj Allianz Life Smart Assist – BINA MILEY MIL-KAR

    KNOW MORE
  • Paying your Renewal Premium is Quick and Easy!

    PAY NOW
  • Know the right amount of Insurance you need in just a few steps!

    START NOW
  • Avail Term Insurance Tax Benefits under Section 80D

    READ MORE
  • Know how to invest money during the covid-19 pandemic!

    READ MORE

Thanks for sharing your details, A Sales representative from
Bajaj Allianz Life will contact you shortly.

Dear Customer, we request you to connect with us in our next business working hours, (Monday to Saturday 24*6) Thank you, Have a great day ahead

Have Us Call You

Have Us Call You!

Please enter a Name
Please enter a Mobile No.
Please check the box to proceed

6 Life Events When You Should Review Your Term Insurance Coverage

When to review term insurance coverage

6 Life Events When You Should Review Your Term Insurance Coverage


calender-blue

March 11, 2021

By : Bajaj Allianz Life

Life can throw unexpected incidents your way when you least expect it. Some may be welcome changes, while others may not. For the unexpected unfortunate incidents, what you need is a financial safety net that can help you and your family to tide over the tough times. The most affordable way to put such a safety net in place is to purchase term life insurance.

Term insurance in India offers you a life cover that goes to secure your family’s financial future. In case something untoward happens to you, your loved ones can rely on the benefits of the term policy to continue to pursue their life goals. Before you decide on a term life insurance plan, you will need to ensure that the cover it offers is adequate. However, it does not stop there. Periodically, and at specific junctures in life, you will need to review the coverage offered by your term policy, so you can make sure it is still sufficient for your needs and your family’s goals.

To understand the importance of this, let us first look at how term insurance in India works.

 

How does term insurance work?

 

A term policy provides you with a life cover with a specific period or "term". This is the tenure over which the coverage is valid. To purchase and enjoy the life cover over the said term, it is necessary for you to pay the insurer periodic payments known as premiums.

In the case of your unfortunate demise during the tenure of the policy, the insurer pays out the death benefits or the sum assured to your beneficiary/nominee. For instance, let us suppose that a policyholder buys term insurance in India offering a cover of Rs. 1 crore, for a policy term of 20 years. If the policyholder dies within those 20 years, the insurance company will pay out the sum of Rs. 1 crore to the beneficiary or nominee of the policyholder.

Now, the coverage that you opt for - it may be sufficient in some cases. However, in others, as your requirements undergo various changes during the course of life, the coverage you initially opt for may become inadequate. It becomes necessary, during such times, to review the cover that you have in place.

 

Why is it important to review your term insurance cover from time to time?

 

There are many major changes that could occur in life. Most of these will come bearing potential additional costs. As you grow on the path of your career, or as you add new members to your family, your financial requirements also continue to increase. Correspondingly, the coverage that you need to receive from your term policy also goes up.

When you enter a new phase in life, the cover you purchased earlier may no longer be adequate. In such cases, you run the risk of being underinsured. Moreover, the consequences of being underinsured can be costly. This is why it is important to revisit the coverage that your term life insurance plan offers from time to time and verify if it is adequate for all the needs that you and your family may have at that point in life. Without such a periodical review, you may not even realize that you were underinsured until a crisis comes knocking.

To make this easier for you, let us look at some common life events when you will need to review the coverage offered by your term policy.

 

6 life events when you should consider reviewing your term insurance coverage

 

1. When you switch jobs

When you switch jobs, you would most likely enjoy a pay hike. This naturally means your quality of living could get better. Therefore, to ensure that your loved ones can continue to maintain that standard of living in case of an unfortunate incident, it is important to review the cover offered by your term life insurance plan. Alternatively, if you move on to a high-risk job, that is even more reason to ensure that you have adequate coverage.

2. When you get married

When you tie the knot, you enter a new phase in life - one that comes with many new experiences as well as new responsibilities. Your term insurance coverage should also reflect this change, in case it is not already sufficient. So, when you get married, take some time to review your life cover and verify that it is adequate to cover your needs as well as your spouse’s.

3. When you have your first child

The birth of your first child is a major milestone in life. It should also mean that your term insurance life cover sees a corresponding boost. Ensure that your life cover is sufficient to help your family take care of the costs of future milestones like your child’s higher education and their wedding expenses. That way, even in your absence, their life goals will continue to be met.

4. When your family grows even larger

Having a second or a third child means that you will, once again, need to review your life cover and make sure it is enough to meet the additional financial requirements that a larger family comes with. Therefore, in case of an unexpected incident, the benefits from the term policy allows your spouse and your children to not only continue to live a comfortable life, but also enables them to keep their life goals on track.

5. When you avail a new loan

Over the course of your life, you may rely on external financing to fund the purchase of a house or a new vehicle. On the other hand, you may even resort to availing personal loans for various reasons. Each time there is an increase in your debt levels, it is a good idea to review the coverage you have in place. This makes it possible to ensure that even in your absence; your spouse is not burdened by the costs of debt. With the benefits paid out, they can settle the liabilities in your name effortlessly.

6. When you inch closer to retirement

As you get closer to retirement, the real impact of inflation becomes more evident. Therefore, performing a periodic review of your term insurance coverage can help you account for the rising costs. A life cover that is not benchmarked to inflation could leave you heavily underinsured. That is never a good idea. So, make it a general practice to periodically review your term insurance coverage from time to time.

 

Conclusion

 

Major life events can be overwhelming, and often, as you are caught up in the emotional aspect of such developments, it can be easy to overlook the financial impact. Nevertheless, ensure that you keep a check on your life cover, so your loved ones are adequately covered by term insurance in India.

BJAZ-WEB-IC-00250/21

Bajaj Allianz Life Videos

Video Icon

Dancing Uncle Is Back | Special Bonus | Bajaj Allianz Life

Contact Us

Bajaj Allianz Life Insurance Company Ltd.

Bajaj Allianz House, Airport Road, Yerawada, Pune - 411 006, Maharashtra

Tel No: 020-66026773

Fax No: 020-66026789

Branch Visit Timings:

Weekdays - 9:00 AM to 3:30 PM

Customer Care Helpline:

1800-209-7272

Monday to Saturday: 9:00 AM to 7:00 PM (IST)

NRI Services Helpline

Monday 7:00 AM to Sunday 7:00 AM (IST)

Sales Enquiry Helpline:

1800-209-4040

Monday to Saturday: 9:00 AM to 7:00 PM (IST)

For NRI: +91 20 67688888 (Call charges apply)

Monday to Saturday: 9:00 AM to 7:00 PM (IST)

Find Us Online

The above information is for general understanding and is meant to educate the general public at large. The reader will have to verify the facts, law and content with the prevailing tax statutes and seek appropriate professional advice before acting on the basis of the above information.