Life is full of unpredictable events, and you have no control over them. The only thing in your hands is to plan for any such mis-happening so that your family will remain secure. That is where a term plan comes into the role. In case you are the only breadwinner of your family, the policy helps in covering their expenses if you leave them in uncertain situations. However, many people still do not prefer life insurances, as they feel it is an unnecessary expense. If you think the same, you may need to consider the policy once again.
Here are a few factors that make term plans a must-have in your investments.
People prefer to put their money in savings or other investment options than in term insurance plans. The reason for this choice is that they get their money back on maturity. However, it is generally observed that the saved amount fails to cope with inflation. Even if they keep their money for a long time, it will not return as much as the term plans offer on death.
There are several add-ons, which can be included in your term plan to make it more effective. So you get monetary benefits not only after your death but even in times of critical illnesses or any such situation. Though riders increase your premium cost, you realize their value at the time of need. On the other hand, you will only have a fixed amount available if you put your money in savings. Plus, it will get degrading with every use.
No Market Risks
When you put your money in investments, you put it at risk of the market. You can only expect benefits from these options if you put them for the long term, or the market is exceptionally in your favor. But there is no such problem with term plans. Your family can easily avail the money after your death. Plus, the assured sum does not get affected by the market conditions. So you need not worry about the amount going up or down.
Another interesting part about term insurance plans is that you can opt for a payout according to your family’s requirements. For example, you can choose between lump-sum or regular income, whichever suits the needs. Savings or investment options usually do not have this advantage. This lack of flexibility can affect your family’s financial conditions after you die.
The conventional life insurance policies used to be expensive as they had several aspects connected to them. However, term insurance plans are dedicated to death coverage. So it proves to be extremely cost-efficient. You can decide the premium based on several factors, such as sum assured and policy tenure. Therefore, it will not be heavy on your pocket, and your family’s financial future would be secured for unforeseeable circumstances.
You cannot decide the direction of your life, but you can certainly plan for adverse situations. A term insurance policy takes care of all your dependent family members and ensures they do not face any problems after your death. You can look for Guaranteed Future Plan as well. With the above-mentioned factors, you will be able to see how a term plan serves better than all savings and investment options.