Term Insurance Plan - Do You Have It

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When I got married the first thing I have done is to get a Term Insurance plan, not to save taxes or not for a secure retirement but for only one reason i.e to protect financial health of your family if you die an untimely death. Though people used to die untimely before too this pandemic has shown us that your life is so cheap and thus a simple virus can give you an untimely death.

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We need to think about what will happen after our death, though you might have built a great crypto portfolio but does your spouse knows about the key or other things. Not really, but with term insurance you give the policy papers to them for their financial health. That money will look after their expenses after you are gone. If you are too rich then it doesn't matter but if you are working-class then this is an important step for having financial freedom not only for you but for your family.

Though the good memories always stay after you are gone, but financial piece is what you need and it's very easy to have too. It's up to you to decide how much insurance you will take but what I think is you should take that much policy amount that if that money goes to a fixed income will generate a monthly income to support monthly expense for your family. This is very much needed for people who have a debt with them. For example, you might have a home loan worth $100,000, so you should have at least that amount of term insurance or even double to that amount so that after you are gone your family can stay in that home and also get the monthly income.

In India, LIC is a famous Life Insurance policy. But that is not actually termed insurance they are just mere policies which not even give you good returns and not the good sum after the death. These policies don't solve any of the financial problems. And the problem is almost everyone has LIC in India including me which I have to take because of family pressure. You can't surrender your LIC just because of your family, but you can still buy a pure Term Insurance for the family's financial health.

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PC: Pixabay.com

Term insurance is just like paying a price to cover your life, if you live till the end of the policy (which I think everyone should) then also you gain and if you had untimely death then also you gain because your family gets a lump sum amount for their financial health. What I think is that the day people in India realize that it is the best interest to separate investment and insurance products, then only they can move towards solid financial security.

Also, the question arises how much cover you need, as I said earlier it should be 8 to 10 times of your yearly income or if the total amount goes to bank FD can give today's monthly expense. Though this is totally subjective on how much you would like your family gets. People always delays their term insurance including me, I have taken it last year. But the early you buy the better because the premium amount does not change for the life of the policy. That means whatever premium you are paying today, you will pay the same premium after 30 years if your age says 30 and you too the policy up-to 60 years.

So term insurance, do you have it. If Yes, congrats that you are one step ahead of your financial planning. If No, then don't waste time to have it.



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