Term insurance is one of the most popular forms of life insurance simply because it provides substantial cover at a very affordable rate. Everyone from a junior clerk to a senior magistrate can afford a term plan. However, these plans are better suited to certain people than others. Read on to know more.
Who exactly needs a term plan?
If you are wondering whether or not you require a term plan, then you first need to answer a few questions. How many people are dependent on you? What are your savings? Will you be inheriting a lot of money? Does your family have any other source of income? Once you have answers to these questions, you will be able to understand whether or not you would require a term plan.
I have a wife and two children. Do I need a term plan?
A person who has dependent family members definitely needs a term plan. A term plan provides financial assistance to the nominees when the policyholder suddenly dies and the monthly income stops. So obviously your wife would need the money to pay for your children’s education and also to run the household.
I don’t have a lot of savings. Do I need a term plan?
A person who doesn’t have a lot of savings most definitely needs a term plan. A person who has a lot of money saved can still hope that in his absence his family can use his savings to pay their bills, etc. However while it is important for a person with savings to also have term insurance, for a person without savings it is absolutely mandatory.
Neither does my wife nor do my parents work. Do I need a term plan?
When there is no other source of income in the family, having a term plan is a complete must. If due to the death of the lone breadwinner the income stops, there has to be provision for a regular inflow of funds.
I won’t be inheriting any money. Do I need a term plan?
People who inherit a lot of money may feel secured about their future and also about the financial security of their dependents after their demise. However, if a person doesn’t have this kind of a fund to fall back upon, it is important to buy a term plan that will provide financial aid to the family after the person’s demise.