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Why to Buy Term Insurance in the First Place?


Have you been told that term insurance is crucial? Has everyone been convincing you to get a term plan? Are you confused whether it is actually necessary or not? Well, if you have these questions looming in your mind, we have some answers for you. First and foremost, term insurance is important and you must have a plan. There is no room for confusion here. Take a look at this article to know why it is so vital and why you need a term insurance cover without fail.

Survival benefits of Term Insurance

Broadly speaking, you do not get any survival benefits in term insurance. The reason you buy a term insurance is solely its death benefit. You buy the term plan to protect your family from the financial losses that may occur if you die unexpectedly. So a typical term life insurance plan is not a product that combines the aspects of insurance and investment; it is just a pure form of life insurance.

There has always been complains regarding this, however policyholders over the years have been unhappy at not getting anything in return after surviving the policy period. Keeping this in mind, many leading life insurance companies of India launched the TROP plans. TROP, or term insurance with return of premium, is a type of term insurance plan where you get the premiums you paid over the years, back if you survive the duration of the term cover. A TROP is more expensive than a standard term plan, but it does give you the crucial survival benefit.

Sufficient coverage of term insurance

Like mentioned above, term insurance is a necessity. You should therefore choose a sum assured that is large enough to cover the following:

  • Financial milestones: Every human being has certain financial milestones in life, from sending your kids to the best educational institutions, to helping the settle down in life, as a parent it is your duty to ensure they never face any financial hardships along the way. Sadly, you cannot always be by their sides and may even die untimely. To ensure their dreams are still fulfilled, you need a term life insurance cover that will help pay for their important milestones in your absence. So take stock of all the financial responsibilities you have ahead and choose your term cover accordingly.
  • Loans and debts: If you have certain unpaid loans and mortgages, you need sufficient term coverage to ensure your family can pay off your loans after your demise. It would be very unfair of you to die without repaying your loans and not helping your family in any way to clear them. While having to deal with the grief of your unexpected death, your loved ones would also have to struggle to arrange the money to pay off your loans. If your term cover is sufficient, the death benefit can easily be used by your nominees to clear the dues.
  • Income replacement: Last but not the least, your term cover should be substantial enough to work as your income replacement for the years to come. It ideally should cover the years till your retirement. So if you buy the term plan at the age of 33, it should be bought for at least 27 years. If you die in the meanwhile, the plan will replace your income for the specified period and help your family members to carry on with their lives without any financial constraints whatsoever.

Keep all the factors mentioned above in mind when choosing your term life insurance cover. Also, be truthful when filling in the form and make all the declarations carefully. If there is any error, your loved ones will suffer later. The claim will be rejected and you will not be able to provide them with the financial support you had wished for.

The bottom line

Whether you choose to buy a TROP or a regular term insurance plan, make sure you have a good and sufficient cover. As we saw, there really is no substitute to term life insurance. You can get a large cover at a low rate. This is a very big advantage of term insurance that you must make full use of. So if you still have not bought a good term insurance plan, do so right away. You can go online, run a quick comparison and find the most suitable cover. Make the payment and get the term cover in your name and continue living in a responsible manner.




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