The first step of a sound Financial Planning & Financial goal setting is having a pure term insurance policy. which will take care all the financial need & requirements of a family in the absence of a breadwinner or earner of the family.
Let me share you some insights regarding Financial well being & financial security of dependents.
Term plan is a type of life insurance policy that provides coverage for a certain period of time & will ensure the financial protection for once family. A term life insurance policy is a pure life cover. This is the cheapest form of life insurance cover.
A person can take 10 or 15 times cover of his annual income.
How a Term plan works.
Mr. Rahul, age 28, a software professional, has three dependants – his parents and his wife. Rahul’s annual package is 7 lakhs is good enough to support his family, but he is concerned. Since he is the sole breadwinner, his dependents could be under tremendous financial stress in the event of his sudden & unfortunate death. Therefore, to mitigate the risk, Rahul is considering buying a life insurance policy.
He can get a term cover of RS 1Crore for a policy tenure of 32 years ( one’s working age) for an annual premium of around Rs8,500 – 9,500.
the cheapest available option to claim a large cover. In fact, by paying just 1 percent of his annual salary, Shah will be getting a life cover of Rs1 crore.
So in the event of Mr. Rahul’s sudden & unfortunate death. An Insurance company will give a cheque of 1 Crore to the nominee (dependable parents or wife or both). so this money can be used to take care of financial needs of the family as a sole earner of the family is no more.
Benefits of having a Term plan.
Low premium: The premium for a term plan is relatively lower than all other insurance plans because there is no investment element in the amount insured. a 30 year old can buy a Rs 1 Cr cover with a policy tenure of 30 years for an annual premium of around Rs 8,500 approx.
Protects family against the financial loss of income: A sudden death of a sole earner of the family is a huge stress on the family as the income is stopped but the daily requirements need to be met.
The financial security of once dependents
Flexible premium payments: Premiums can easily be paid annually, half yearly, quarterly and even monthly also.
Riders: Term plans come with different add-on riders which provide extra benefits at a nominal cost.
Accidental death rider
permanent or partial disability rider
critical illnesses rider
waiver of premium and income benefit rider.
so take the first step in order to ensure the financial protection of your family by taking a term insurance policy.