By Dheeraj Sehgal
We are all creatures of habit and it is good to see how diligently people take backups of their work, pictures and contacts on phones among other things. But what about life’s backup plans? A friend told me that his wife’s successful boutique store was his financial cushion. I wonder why we sometimes miss out on the obvious by ignoring life insurance as a way to ensure that our dependents have a real backup plan to address their future financial needs.
Our society is changing—small and nuclear family is a reality and there is a marked change in the aspirations among working youngsters. The ‘save now, spend later’ mantra is losing out to ‘spend now and pay later’, with easy borrowing options. Today, there is a loan for salary advance, marriage, car, home and the latest gizmo that comes out.
The smart and logical step is to opt for a term insurance plan which provides with the necessary backup to realise the family’s financial goals. In its most basic form, a term insurance plan is a form of life insurance cover which provides coverage for a defined period of time, and if the insured dies during the term of the policy then a sum assured is payable to nominee.
Managing costs
There could also be situations in life which impact one’s ability to earn, such as a disability arising from an accident. While one could manage the treatment cost, the disability may impact future earning capability. Likewise, there are health conditions such as cancer or heart ailments which could rob many of their future earnings potential. Given the increase in incidence, a financial backup becomes a necessity to consider.
Term plans offered today are a culmination of insights gathered over the years, hence allow policyholders to tailor it to suit their needs. The numerous combinations possible today include flexibility to include critical illness cover, child education cover, increasing life cover, return of premium option, whole life cover and cover for spouse among others.
With the scope to increase the insurance cover each passing year, term insurance automatically addresses the increasing needs at every stage in life. The short-term premium payment with whole life insurance cover till one turns 99 is a feature that provides policyholders with peace of mind and a backup for life. This feature helps people to build a financial cushion for their lifetime.
Return of premium
And for people who view term insurance as an expense, there is a return of premium feature available at maturity of policy in a few term plans today, in case no claim has been made in the policy. Another feature is the child education cover. Given our aspiration to provide the best education for our children, this is an additional cover that can be included with the policy, which makes it an essential backup if you have children.
The premiums of term plans today are very affordable too, some even start at `13 a day for `1 crore cover bought online, depending on one’s age, amount of cover , etc. Some of us who diligently backup data, know how little it costs and how convenient it is to store information that’s important to fall back on when needed. While you can take chances with data on your phone or computer; you cannot afford to do the same when it comes to your family and children.
