Term Insurance for Entrepreneurs

What is Term Insurance?

Most of the individuals’ desire to be a businessman or an entrepreneur and break the malicious circle of monotonous jobs 9 to 5. They become independent in professional decision-making. This sense of responsibility and ownership results in remarkable financial growth for the business and the person. However, being an entrepreneur simply means that you are entering a high-risk area. To safeguard the risk, only protecting your business is not enough, you are also required to protect yourself. This is the case where the term plan comes into play.

Term Insurance is defined as the agreement between the insurance company and the insured (policyholder), where a specified sum of money is paid to the family of an insured person by the insurer in case of the policyholder’s death. While understanding the definition and meaning of term insurance, it is important to know that Term insurance is the simplest and purest type of life insurance policy that provides overall financial protection to your loved ones against life’s eventualities.

Note: Now that you know that what is term insurance plan you can easily buy a term plan for your loved ones.

Why Term Insurance for Entrepreneurs is Important?

Below are some of the points that will further make you understand the importance of term insurance for Entrepreneurs:

Irregular Income Source

Unlike salaried individuals working in a 9 to 5 cycle, earnings from your business can be highly inconsistent. Additionally, if you have just started your business and the returns are not coming too high after putting in full effort. As a self-employed person means income generated from it totally depends on the amount of power you are putting in. In such cases, your death can cause financial difficulty both for your business and your family. Thus, it is important to financially protect both of them from such conditions. You can easily purchase a term insurance plan to secure your loved ones and another to protect the business.

Business Liabilities

If you are running a business, its growth always needs funds, be it for expanding the business or for working capital. Financial institutions or banks can provide funds to your business, but this means more liabilities for you. In case of your absence, the business liabilities will slow down your business but also affect your family financially. Term Insurance can help you lessen this kind of risk, thus protecting the family’s finances.

Non-Earning or Financially Dependent Spouse

In today’s times, both partners earn and contribute equally to household expenditures. Whether long time savings or child’s education plan, most houses plan their finances accordingly, keeping all the risks of the future in consideration. However, in a small middle-class-owned business, a part of families still has a single breadwinner. So having a term plan can protect your spouse in long run from the financial stresses in your absence.

Pocket-friendly

The most unique feature of term insurance is its low premium rates. As a self-employed, you may have invested in other market tools that provide high returns. In such situations, plans should only be bought for its basic aspect, which is death or life cover benefit.

Note: You can easily calculate the term plan premium by using the term insurance calculator online tool.

A Hassle-free Safety

Term insurance plans are one of the purest and the simplest types of life insurance policies. These plans are not complex, be it associated with coverage details or rate of return. It offers coverage to the policyholder and a hassle-free payout to the nominee in case of the death of the policyholder during the policy term.

How To Buy Term Insurance For Entrepreneurs?

With all the term insurance benefits discussed with you, the inclination to opt for a term insurance plan naturally increases. So, here are a few steps that you should keep in mind before purchasing a term plan:

Policy Term: As an Entrepreneur, you are definitely going to work more than a salaried person. Let’s say, a salaried individual works till 60 years of age whereas a self-employed person would work for another 10 years. Always make sure to choose a plan that provides you coverage till 85 years of age at least.

Premium Payment Term: For a salaried individual, a regular premium payment option is the right way as they have a regular income flow. Whereas, for an entrepreneur, it is important to pay all the premium amounts as early as possible using option-limited premium payment terms. With this option, you can pay for the whole policy term just within a few years and become stress-free.

Suitable Sum Assured: Before purchasing a term plan, ensure to decide an adequate sum assured. The sum assured amount should be equal to all the outstanding liabilities, expenses, and loans required to maintain the existing lifestyle and achieve life objectives such as marriage, retirement, and children’s education.

Medical Tests and Declarations: Make sure to completely and correctly fill the proposal form at the time of purchasing a term insurance plan. You should undergo the medical examination as requested by the insurance company. This ensures that the company is fully aware of the medical history/condition and you have not repressed any facts related to your pre-existing ailment or health, thus this will help your dependents while applying claim.

Note: Check out the best term insurance plan in India and choose one that suits your requirements.