What is a Term Insurance Policy?
A term insurance plan is a simple step towards financial protection. It offers life coverage for a fixed number of years, called the policy term. If the life assured passes away during this period, the nominee receives a payout called the death benefit. This money can help the family cover daily expenses, pay off debts, or manage important life goals.
Term insurance is known for being affordable. It gives you life cover at an affordable premium. Some plans may also offer a return of premium if you survive the policy term. There are no savings or maturity benefits with term plans, which is why they cost less than other life insurance plans.
Why Should Newlyweds Buy Term Insurance Plans?
Starting your new life with a term insurance plan can be a good financial decision. It prepares you for the future and helps you deal with unexpected events.
Affordable Life Cover
If newlyweds are in their 20s or 30s, they can get coverage at an affordable premium. This is because young and healthy individuals are seen as low-risk by insurance companies.
Maintain the Standard of Living
If one partner passes away, the other could struggle financially. Term insurance provides financial support to the nominee to take care of the expenses.
Assist in Repaying Outstanding Debt
Loans are commonly taken by couples for common purchases, such as homes, cars, or technology. A term insurance payout can assist in repaying loans so that the surviving partner isn't saddled with responsibility.
Inheritance for Heirs
Often, when couples start a family, they want to secure the future for their kids. The sum assured received from the Term insurance plan can help your child continue living a financially secure life even if a parent is deceased.
Tax Planning
The premiums paid for term insurance may qualify for tax advantages under relevant provisions of the Income Tax Act, 1961. Also, the death benefit received by the nominee is generally tax-free.
When Is the Right Time to Buy Term Insurance?
The best time to buy a term insurance plan is as early as possible. When you are young, premiums can be low. Term insurance for life planning in the first year of marriage can help you build strong financial protection from the beginning.
Why is Term Insurance Important at Every Stage in Your Life?
Life keeps changing as we grow older. Our needs, dreams, and responsibilities also change. Term insurance helps protect your family during every stage of life. Whether you are young and single, newly married, raising children, or planning for retirement, term insurance can offer peace of mind. Let’s see how it helps at each stage.
Young and Single – Building a Foundation
- When you are young and single, you may not have many responsibilities.
- But this is the best time to buy term insurance because it is affordable when you are healthy and young.
- This helps you build a strong financial base early in life.
- In case of your unfortunate death during the policy term , the money from the policy (sum assured) can financially support your parents or other family members.
Marriage and Family Planning
- Getting married is a beautiful phase in life. But it also brings new duties and financial planning.
- You and your partner now share dreams, plans, and expenses.
- Term insurance becomes more important at this stage. Let’s see why:
Protecting Your Spouse
- If you met with an untimely death during the policy term, your partner should not struggle financially.
A term plan ensures they get enough money (the death benefit) to continue living comfortably.
Homeownership
- Many couples buy a home with the help of a loan.
- If you are not around, your spouse might find it hard to pay EMIs.
- The death benefit from the term plan can help assist with payment of these EMIs.
Raising Children
- After marriage, many couples have children.
- You want to give your child a good future, right from school to college.
- The death benefit from the term insurance plan can help pay for your child’s education and financial needs, when you are not around.
Daily Expenses
- Running a household includes bills, groceries, fees, and medical costs.
- Losing one partner’s income can make things difficult.
- Term insurance helps your family manage all these without stress.
Health and Future Security
- You can add riders to your plan, like an accidental death benefit rider, a critical illness benefit rider or a waiver of premium.
- These riders offer more added coverage at a small extra cost.
Buying term insurance early in your married life helps your family stay strong and safe financially.
Adapting to Midlife Changing Needs
- Midlife brings new challenges—aging parents, school-going children, and sometimes higher medical needs.
- Term insurance becomes a strong financial safety net.
- It ensures your family can handle big life expenses like education, home EMIs etc.
You may also have new loans or responsibilities that can be paid through the amount received by the insurance company as death benefit. A term plan gives support when your family needs it, in case of your untimely demise.
Retirement Planning
- As you near retirement, your income may reduce or stop.
- A term plan ensures that your spouse or dependents do not struggle after your death.
- The sum assured helps them manage daily costs, medical bills, or home care needs.
- It also ensures you leave something behind for your loved ones.
Things to Consider Before Buying Term Insurance
When you decide to buy a term plan insurance for your loved ones it is important to look at a few simple but important things. These will help you choose the right plan for you and your family. Let’s look at the top things you should think about:
The Sum Assured
- The sum assured is the amount of money your family will get if you die during the policy term.
- It should be enough to help your family live a comfortable life without your income.
- Also, consider any loans or money you owe—like a home loan, car loan, or education loan.
- Think about school fees, rent, or other big expenses your family may have.
- Pick an amount that helps your family pay bills and meet their needs even in the future.
Additional Riders
- Riders are small add-ons you can take with your main policy.
- They give extra protection for a small extra cost.
- For example, you can add an “Accidental Death Benefit Rider.” This means your family gets more money if you pass away in an accident.
- Riders can give you added coverage which can be helpful in different life situations.
- Pick the riders that wisely fit your needs.
The Claim-Settlement Ratio
- This is a very important number to check before buying a policy.
- It tells you how many claims an insurance company settles out of claims they receive in a given year.
- A high claim-settlement ratio means the insurer pays claims quickly and efficiently.
- Always choose an insurer that has a good record of settling claims.
Taking care of these things before buying a term insurance plan helps you make a smart choice. It keeps your family protected and gives you peace of mind for the future.
Conclusion
Starting your new life with term insurance is a smart idea. A term insurance plan not only helps you prepare for the unexpected but also can help establish a solid financial foundation.
Term insurance secures your partner, protects your children's future, and provides peace of mind. As you commence this journey together, make sure to take the time to discuss your goals, your budget, and what type of life cover you both require, so you can start your life together focused, without the worry.
FAQs
Is taking term insurance a good idea?
If you have term plan insurance for your loved ones, your nominee) will get death benefit from the plan if you pass away during the policy term. This money can help your nominee pay bills, loans, or school fees. Term insurance gives peace of mind. The term plan does not cost too much and gives your loved ones a strong financial safety net.
Is term life insurance worth it?
Term life insurance can be very helpful. It gives a life cover at affordable cost. This means you pay an amount called a premium regularly. If you pass away during the policy term, your nominee will get the death benefit. That money can help the nominee(s) meet their daily needs.
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