Life Insurance: Why you need to have a term insurance cover

Published: July 3, 2020 1:15 AM

Term insurance has evolved from being a pure risk low cost life insurance policy, to one which is feature-rich and packed with risk covers.

Life’s uncertainty is not about the possibility of just not waking up one morning; it is also about being disabled tomorrow.

By Sameer Joshi

The coronavirus pandemic has changed the way we live. We can no more step out of homes without masks, sanitisers and other mandatory precautions, while maintaining social distancing. With fatalities rising, people are worried about their lives and many have been reviewing their life insurance cover. Those who are yet to relook at their life insurance cover, this is a good time to review and revisit their insurance needs and existing policy cover.

As responsible adults, we need to take care of the financial needs of our near and dear ones. At the same time, we need to have backups for our life goals. Yet, several surveys indicate how even among the insured Indians, under-insurance is common. Take out your life insurance policy documents and check whether the total life cover you have will be sufficient for your family if you are no longer around.

Life’s uncertainty is not about the possibility of just not waking up one morning; it is also about being disabled tomorrow, thus reducing the ability to earn and manage your life. Disability is an aspect that can strike anyone as much as critical illness, and the cost of treatment is high for both.

Don’t be a victim of oversight

Life insurance policies protect the financial future of your dependents, hence there cannot be any compromise on the quantum of life insurance you take. Through term insurance, you can get the opportunity to be adequately insured, and at the same time pay nominal premiums compared to other life insurance products.

Term insurance has evolved from being a pure risk low cost life insurance policy to one which is feature-rich and packed with risk covers that could be customised to suit different sections of the population. Today, term plans combine the risk cover with critical illnesses cover that include several critical health-related conditions that one could face. There are policies with child education cover option, cover for spouse and one where the premiums are returned at the end of the policy tenure, if the policyholder survives.

There are policies available at online platforms that come with a premium cost as low as `13 a day for `1 crore cover for say, a 25-year-old individual. The actual premium would depend on factors such as the age of the policyholder, the combination of insurance cover he opts for, etc.

Just the way there is no omission when it comes to insuring one’s car, even among the safest of drivers, there should not be any compromise to one’s life insurance needs. A lesson to learn from the Covid 19 pandemic is that anyone can be impacted. What people need to do is act prudently now to adequately insure their lives and not expose their families to financial uncertainties.

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