Life and its unpredictability are what make it worth living. You never know what the next minute has in store for you. While this can give thrills to life and make it an adventure, the surprises are not always welcome.
No matter how well you earn right now if something unfortunate should happen to you, your family’s future becomes uncertain. The fear is quadrupled when you have a big family packed with parents, a spouse, and children. That is why securing their future for uncertainty in life is the best decision.
And, that’s where term insurance comes in.
A term insurance plan is a policy that gives coverage for a specified term during which, if the insured person dies, the sum assured will be paid to the beneficiaries.
In simpler terms, a term insurance plan guarantees that the beneficiaries (your family) will be entitled to a specified sum of money if you meet with unfortunate death.
Why is Term Insurance a good investment?
1. Financial security for your family
Death can come knocking at your door at any time. You cannot say no to it. The only thing you can do is secure your finances, so your family has no worries if and when you are gone.
You don’t want your parents to be evicted from their home during old age or your spouse to default on EMI payments or your children to land themselves in school fees debt. This is why setting your family with a fund is essential. Term insurance plans exist for that purpose and give that kind of financial stability to your family to help them meet their monetary needs.
Think of term insurance as a kind of investment where you are financially securing your family’s future. They will be financially set for years to come when you invest in term insurance.
2. Affordable premiums
The best thing about term insurance is that it offers a high return at highly affordable monthly premiums. Sometimes, the premiums are less than that of an average meal’s cost! So you spend a very minuscule amount of money every month and get a high sum assured for situations where your family will need money after your death.
The monthly premiums are so low; they will not pinch in your monthly budget. A life-long investment for such a low price is a steal deal and an investment worth making! On the other hand, if you have less time to spare or think, you should just opt for life insurance plans
3. Tax benefits
We do so many things to save taxes, but do not pay attention to options already in front of us! Term insurance is a great way to save on tax payments.
The term insurance premiums are tax-exempt, and you could save thousands every year on taxes if you invest in term insurance. This way, you secure your family’s future and save on a massive load of taxes on your income. A stellar example of killing two targets with one shot!
4. Early-mover advantage
The thing with term insurance or any kind of insurance plan for that matter is this- the early you move into this investment, the better it’s going to get for you.
Term insurance plans offer an early-mover advantage where you can start putting money in a term insurance plan of your choice from 18 years of age till 65. Many people move into it when they are in their late 20s, something which is not so advisable.
It’s better to start investing in term insurance when you’re young and have high earning potential. A step like this will reduce your burden as you begin to age, and the expenses start increasing.
5. Easy to understand
The economic gibberish is not for everyone to understand. The financial jargon in many investment plans can make you sweaty and rethink your investment.
It is certainly not the case with term insurance plans, which is one of the easiest-to-understand plans. All you need to do is get yourself one, pay your premiums on time, and set it! No other frivolous regulations. Term insurance plans also happen to be some of the cheapest ones when compared to other plans.
Term insurance plans are like an all-in-one investment. There is not much that you have to do; hassle-free, and has high returns. Besides, the claim rejection rate for term insurance claims is extremely less. What else is there to ask for when you’re investing in insurance?