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Open in case of death

Term Life insurance exists to protect your family from financial disaster in case of your death - don't scrimp on it

Open in case of death

Nothing is certain except death, corruption and taxes. However the unexpected death of a loved one can cause damage over and above the emotional shock and grief it inflicts. It can be financially catastrophic - affecting your life chances if you are financially dependent. Alternatively if there are people in your family who are dependent on you - it can cast a shadow on their future. What type of insurance addresses this significant risk? You will come across terms such as whole-life, endowment, money-back and child plans. None of these will do the job as well as term life insurance.

What is term life insurance?
Term Life insurance is insurance in its purest and simplest form. It only pays out in case of the death of the person whose life is insured. It does not involve any kind of investment. It does not payout a lump sum if you reach a certain age or periodic amounts at specific intervals. The lack of these add-ons, special features and bonuses dents the popularity of a product that otherwise does its job better than any other - because it costs a great deal less.

I get nothing if I don't die?
This line of thinking, though it is a strange distortion of priorities occurs to many consumers. They feel like they've 'lost' the value of the premium they have paid - ignoring the fact that they've actually won by being alive! Yes, term life insurance pays nothing if you outlive the insured period but that is a small price to pay for getting to live longer. Other types of insurance pay lumpsums at certain ages or periodic amounts every few years in case of survival. However after comparing their costs, fees and charges with simple term insurance, you will find unambiguously find better value in the latter.

When do I need term life insurance?

Protecting your parents
Dying may be far from your mind when you are young and just starting your career. But take a moment to recollect that your parents are getting old. If they are financially dependent on you in any way or likely to become so, as they use up their savings, you need to consider buying term life insurance. They may have also guaranteed your educational or home loans and this burden will fall directly on them incase of your demise.

Protecting your home
You may have bought your first home and the EMI is eating away at your pocket and peace of mind. In such a situation, spending money on a term life insurance premium may be the last thing you want to do. However once again, consider the magnitude of the event you're protecting your family against. Your death without a safety net can destroy for them, the very house dream you toiled for.

Protecting your children
With children in the mix, making investments for their education seems like the most important thing to do. A whole category of insurance policies called 'child plans' tries to cater to this need. However it is important to distinguish it from the risk to their future due to your death - the latter is much greater. A child plan may not cover the full amount you will need for their future in case of your death.

Don’t forget your better half!
Many of us take our spouses for granted. They help us in countless ways, both small and large. In some cases they cook for us and clean for us and in others they pay for our medicines, our holidays and our hobbies. Whilst the situation of a housewife is clear-cut in terms of dependency, working spouses may also depend on us financially in small but important ways, whether it is a joint health insurance policy or them living in our parental house. Where there are children, the risk is many times greater. Let us make sure that they do not suffer when we are no more. 

There are many situations and circumstances in which your family can be harmed by your unexpected death. You will not be able to foresee many of these. Term life insurance holds out the best answer to this risk. Buy it before it's too late.

Story Updated on 16th July, 2016.