How Important is to Focus on 3Ds’ When Buying Term Insurance Plan?
Now that we are in 2021, each one us wish that this year is better than the last year. Indeed 2020 has been life-changing, from the insurance perspective, people realised the importance of insurance significantly especially a term insurance policy.
Well, a term insurance plan is more than just a death benefit. A term plan is a must for anyone who has immediate dependents and liabilities as well. Buying a term insurance plan is a must for sound financial planning. We know thinking about demise sounds unpleasant and disturbing; however, it is better to plan today as death is the harsh truth. An eventuality ever comes around with prior notice.
Imagine what if tomorrow you are not there to take care of the financial needs of the family? How will your family deal with the financial turmoil? Have you ever given it a thought?
Well, the answer to all the queries is buying the right term insurance plan and secures the financial future of the family even if the worst happens tomorrow.
You Do Not Buy Term Plan Every Day
When it comes to buying a term plan, you need to be well-informed so that you take a wise decision. Buying a term plan is different than buying everyday essentials.
It is because you are not going to buy a term plan every day, weekly or every month. You do it once in a lifetime, therefore, it becomes important to be familiar with all the ins and out of the term plan.
Choosing the right term plan could be a daunting task. In this article, we will discuss term insurance and how it enables in building a shield against the death, disease and disability (3Ds’).
Understanding the 3Ds’ of a Term Insurance Plan
- Death: The passing away of a loved one is not easy and it is hard to accept. It becomes even more strenuous if you were financially dependent upon them. This is when a term plan comes into the picture when you need not worry about the finances. A term plan offer death benefit to the nominee mentioned in the policy in case the policyholder passes away while the policy is still active. Apart from the death benefit, a term plan also offers tax benefit on the paid premiums and tax-free payment to the beneficiary in case of demise. A term plan is of more importance when you are the primary earning member of the family.
- Disease: Undoubtedly, most of us live a stressful and unhealthy lifestyle and more prone to chronic illness or diseases. Therefore, when you are planning to buy the term insurance plan enhance the protection by choosing the critical illness benefit. There are different term insurance plan options accessible that offer cash payouts to the policyholder when diagnosed with critical ailments like a heart attack/ stroke, cancer, multiple organ failure, etc. are covered within the policy. Having any of such illness not only adds up to the hospital expenses but also impacts career and disables an individual from earning a livelihood. Buying this rider implies that it help you to manage the everyday expenses such as education, hospital visit expenses, home rents, and so forth. For example, if you buy a term plan for the sum assured of Rs 1crore and an additional critical illness benefit for a sum of Rs 25 lakh. Then after 5-10 years, in case you suffer from any disease that disables you from earning the company will pay a sum of Rs 25 lakh so that you can manage the expenses. In case you loose life during the policy term then the dependents will receive Rs 1 crore. A critical illness plan can be bought in two ways, one as the standalone plan that is offered by insurers offering life and health insurance and one as the rider with the term plan.
- Disability: The financial responsibilities are never as easy as it sounds. Financial responsibilities include taking care of everyday expenses and the needs of the family. However, if the breadwinner of the family suffers any disability due to an accident or a mishap it becomes extremely challenging to manage. Any individual can suffer any temporary or partial disability. When you have chosen the right cover, the term insurance company pays the sum assured to the assured person to compensate for the financial loss. There are insurance companies in India that also waives off the future premiums in case the assured is permanently disabled. When buying a term insurance plan, make sure that you include the accidental disability rider benefit and enhance the protection of the plan easily. The payout plans and conditions will differ from one insurer to the other.
Wrapping it Up
Gone are the days when buying a term insurance plan was a daunting task. Today with a plethora of options available and in the COVID-19 times, it is recommended to buy the term insurance plan online at an affordable premium.
The best term insurance plan will protect you even better by covering against the most important Ds’ death, disease and disability. There is as such no best time to buy a term plan, the earlier, the better.
Written By: PolicyBazaar - Updated: 22 January 2021