A major concern that many of us have is, what is going to happen to our family if we are not around anymore. If this thought keeps you worried through the night sometimes, fret not, you are by no means the only one. Every responsible individual wants their family to have a decent life without compromising on the financial part, especially when they are not there. And to make sure you properly plan to take care of your family in such circumstances, you can take term insurance.
Ever since the beginning of 2020, COVID 19 has hit the world and we have lost so many people. Some of them were elderly, while others couldn’t even make it to their mid-30’s. We have seen so many families got affected because of the sudden demise of the sole bread-winner of the family. To prepare for such an unprecedented situation, you can check out the term insurance policy andmake a plan that you think can benefit your family the most in your absence.
Nevertheless, there are several advantages as well as disadvantages of term insurance, which you must be aware of before you make up your mind. Here are a few of them discussed below:
Term insurance advantages
- Affordable:Term insurance is one of the cheapest forms of life insurance that you can purchase. The premium that you need to pay is totally affordable and you get to choose the premium that you are ready to pay. If you are young, you can easily find term insurance as per your budget.
- Covers short-term requirements:Term life insurance covers temporary obligations. Many people purchase mortgage life insurance which is also a term life insurance that pays off the EMI of your home in the event of your death.
- Simplified:Term insurance is very easy to understand. It does not come with several complicated variables. When you buy a term insurance plan, you buy death protection without any equity.
- Guaranteed rates:The rates offered are guaranteed. You can lock-in rates for tenures such as 1, 5, 10, 15, 20, 25, or 30 years, depending on your requirements.
- Option for conversion: Many of the term policies offer conversion option which enables you to convert your term policy into a permanent policy without any proof of health.
- Can be purchased online:Just like groceries, you can buy your term insurance online. You can in fact visit the website of IIFL Insurance and check all the details related to the term insurance policy. You can compare the plans and purchase the one that suits your needs.
Term insurance disadvantages
- No cash value:The policyholder does not get a penny out of this plan. It is the beneficiary who will get to avail of the financial benefits of the plan. And if the policyholder buys a 30 years plan and survives more than the tenure of the plan, then even the beneficiary will not get any benefit.
- Expensive for older people:If you are elderly, you already go through several expenses. Also, to buy this plan, you would need to undergo various health checkups, which would require you to spend more money.
- Limited Coverage under some plans:Your family will not get any benefit from this plan if the circumstances of death do not meet the circumstances specified in the policy. For example, if the critical illnesses are not covered under your term insurance plan and you, unfortunately, develop a critical illness and expire, then there will be no payoff received by your family.
Nevertheless, you will still find more advantages than disadvantages of the term insurance plans. Also, when you are purchasing one such insurance plan, you need to keep in mind the disadvantages to make an informed decision. If you feel like exploring more on the subject of term insurance, you can browse through the IIFL Insurance Knowledge Centre. You will get the answers to most of your queries.
