Term Life Insurance provides financial support and reduces uncertainties in business and human life. The policy provides safety and security against a particular event. There is always a fear of sudden loss. Insurance provides a cover against any sudden loss.
The life insurance coverage depends upon a few factors such as your current annual income, financial future liabilities, financial goals, your age at the time of purchase, and several other such responsibilities. However, before getting a term life insurance policy, you’ll have to figure out the right plan for you.
What is Term Insurance
Term Insurance is an agreement wherein an insurance company agrees to pay a specified amount after the death of an insured party as long as the premiums are paid and up to date. Policies give insured persons the assurance that their loved ones will be financially secured even after their death.
Choosing a Term Insurance Plan
- Family And Work Situation
Your insurance requirements will be influenced by your family situation, your age, your health situation and whether you are an owner or self-employed individual. Getting insurance is important, whether you are single or in a relationship. In the event of your death, your loved ones will have to pay off any financial liabilities you have.
In addition, they may also have to bear some of your shared responsibilities, such as your credit card fees, your car payment, mortgage payment, or any other payments. If you buy term insurance coverage, your debts will not be a burden for your family members and they can fulfil such financial obligations with ease.
- Life Insurance
A Term Life Insurance Policy is an effective financial tool, it lets you ensure you and your loved ones’ providing financial security in bad times. An unfortunate event like a sudden death of the breadwinner of the family could have a major impact on the financial conditions of the family.
It is best to start thinking about it now and get a policy that will let you cover your needs as a self-employed person and will avoid future concerns for your family.
a. Life Goals – Your personal, family and professional goals will also determine your choice of life insurance plan. This will help you evaluate how much life insurance you need to take out to protect your loved ones in the event of death.
b. Type of Coverage Required – Whether you want an insurance coverage that generates liquidity and surrender value whenever you require or a long term lock-in period tenure. Once you make a decision, you will be well equipped to choose the term insurance plan that works best for you. You can also take the help of a financial security advisor to guide you based on your requirements and direct you to life insurance that meets your needs.
What is a Term Plan Calculator?
A term insurance calculator is an online calculator that helps in calculating the amount of premium payable under the term policy. You would have to mention your age, the coverage that you need, the term of the plan, for how long you want to pay the premium, the frequency in which the premiums would be paid based on your occupation, medical history, etc.
These details will directly affect the calculation of your insurance premium and give you the final premium payable.
How much term life insurance do I need?
A large part of selecting a life insurance plan is by determining how much money your dependents will require. One basic rule of thumb is that the death benefit on your insurance policy should be equal to seven to 15~20 times the amount of your annual salary. The reasonable amount suggested by insurance providers for an insurance policy is six to 10 times the amount of buyer’s annual salary.