Thu. Mar 28th, 2024

Life is unpredictable, and you can never know when something untoward will happen to you, taking the primary source of income away from your dependents. In addition, if you are the only member with an income in your family, your dependents may have no other financial safety net to rely on in the event of your untimely death.

A term plan is a popular life insurance product for dealing with such contingencies. It provides a slew of advantages to your family members in case of your untimely demise. With a comprehensive term plan for your family, you can be confident that their financial future is secure, even if you are not present. 

Let us begin to understand how a term plan can help your family.

How can term insurance help your family?

Term insurance plans can be beneficial for your family in a variety of ways. However, before you buy a term plan, learn about all the term insurance benefits your family will receive.

  • It serves as a substitute for lost income

Term insurance policies are pure life insurance. This means term insurance revolves solely and exclusively around adequately securing your family’s future finances. This type of insurance compensates for income loss when one or the only earning member of a family dies unexpectedly. The term insurance benefits paid to the beneficiaries help to replace the income they lost due to the policyholder’s untimely death.

  • It contributes to the upkeep of your family’s way of life

Some families with working couples have two streams of income to rely on. Even if there is only one earning member, the family becomes accustomed to a particular way of life. The level of income earned corresponds to everyone’s needs and goals. However, when a family’s earning member dies unexpectedly, term insurance death benefits allow the surviving members to maintain their standard of living.

  • It makes your children’s dreams come true

Your children’s future goals are determined by your income and your spouse’s income (if you are both working). If one or both earning members die unexpectedly, the children will be left without an income to support their growth, dreams, and aspirations. This is where term insurance can come in handy. The benefits of a term policy can help ensure that your children’s life goals are not derailed, even if you cannot provide for them.

  • It assists your family in meeting significant expenses in an emergency

You and your family may have some major life goals that you want to achieve. For example, you’ll want to buy your home a few years later. Alternatively, it may imply sending your children to the best universities. You might even have some high-interest debts to pay off. Unfortunately, in the event of your untimely death, the loss of income may make it difficult for your family’s surviving members to meet these significant expenses. However, term insurance allows them to cover the same. 

Some additional features of term insurance plans for family

Some term plans come with additional maturity benefits. These are given through the return of the premiums you have paid over the policy term if you survive the policy. The premiums are returned to the policyholder after deducting the applicable charges. Many often choose this since it ensures that the investment returns as a lump sum in the future, which can help meet various family goals.  At the same time, opting for a joint life policy means you and your dependent can be covered under a single policy.

A term plan calculator is an online tool that assists you in calculating the premium amount required for your selected life coverage and plan benefits. You can use this free online calculator to determine the approximate premium amount for your plan. Term Plan calculators can calculate premiums for various payment frequencies such as monthly, quarterly, bi-annually, or annually. This calculator will help you plan and allocate the requisite premium amount in your monthly budget. This is a must to ensure that you do not miss your premium payments and can comfortably maintain your policy throughout its given tenure. 

There are tax benefits under these plans as well, on the premiums paid, in the form of exemptions up to ₹1.5 lacs under Section 80C of the Income Tax Act of 1961. There are flexible options for premium payments as well. In its base form, the term insurance plan for a family will come with death benefits for the nominees without any other returns or maturity benefits. 

Conclusion

A term plan is a must in your portfolio if you are planning to secure your family’s financial future. But first, you must understand the nuances of buying a term plan and then select the one with the right coverage and features so that you and your family can be at peace knowing that you are prepared for all certainties. 

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