Secure Your Family’s Financial Future with a Term Insurance

Life Insurance: The necessary financial planning product

Keeping in mind the ever-increasing inflation and desire for wealth creation, purchasing a life insurance plan while still making money is not only wise but also an integral aspect for building a fruitful financial legacy for your family. With the wide number of options available in terms of financial products as well as competition in the financial industry, it is imperative that you make the right choice and focus on building the right portfolio while doing your financial planning.

Life Insurance is the best way to secure your family’s future in the unfortunate event of your passing. Further, term insurance is considered to be the most suitable financial planning product with the ability to secure a sum assured of 15-20 times your annual income without the burden of heavy premiums.   

What is Term Insurance?

Term insurance is a life insurance product where you agree to pay a fixed sum of amount or premiums to the insurance company for a fixed term in exchange for a sum assured/death benefit for your family and loved ones. You can buy term insurance either online or through physical insurance agents. However, most people nowadays prefer buying their term insurance online either through the company’s website itself thereby, eliminating the middleman or through websites of online aggregators where you can compare plans’ features, terms, rates, claim settlement ratio, etc. across several companies. Buying term insurance online may be  cheaper than buying one through agents and buying it through the company’s own website will be cheaper than an aggregator, since the commission or brokerage would be completely eliminated. 

Why should you include Term Insurance in your financial planning?

The main advantage of making term insurance a part of your financial planning is that the premium payment is much lower than the payable under a basic endowment plan. Further, the coverage is broader as compared to a basic life insurance plan bought at the same premium amount.

There are various kinds of term insurance available in the market which you can opt for based on your financial planning requirements:

1. Level/ Basic Term Insurance Plan
   This is a regular vanilla term plan where you agree to pay a fixed premium to the insurance company for a specific pre-defined term in exchange for death benefit/ sum assured payable to your family in an unfortunate event of your passing. The coverage under the basic plan is relatively sizeable.
   
2. Increasing Term Insurance Plan
   In this plan, the coverage increases every year at a pre-determined rate. This plan takes into consideration the inflation rate and ensures that the insurer is never underinsured. Under this plan, the premium amount is relatively much higher. 
   
3. Decreasing Term Insurance Plan
   In this, the coverage decreases every year. The main reason why this plan is included as a part of someone’s financial planning is to cover repayment obligations that reduce over time, such as a home loan or education loans. In this plan, the premium amount is relatively lower than a level or increasing term insurance plan.  
   
4. Term Plans with Riders
   Riders are additional coverages that you can opt for at a nominal rate over and above your basic term insurance plan. Some of the popular riders include waiver-of-premium cover, accidental death cover, loss of employment rider, disability coverage, etc. 
   
5. Term Plans with Return of Premium
   This is like a typical life insurance plan but with a pre-defined term. In the event, the insurance holder outlives the term of the term insurance policy, the premium paid by him is returned back to the holder post completion of the term.
   

Term insurance plans are attractive forms of life insurance since they provide you with the benefit of not only tax saving under Section 80C of the Income Tax Act, 1961 for your financial planning along with the death/maturity benefit of a life insurance plan but also offers you a much higher coverage at a lower premium.  

Visit PNB MetLife to know more about Long Term Savings, Term Insurance & Term Plan