Buying life insurance plans is one of the most sensible decisions you can make to safeguard your family’s financial future. As a provider for your loved ones, you are committed to making each of their dreams come true. But there are limits to how much you can work to make their lives comfortable, even with a second job.
The way to create wealth lies not in putting in more work hours, but in making your money work for you when you can’t. One of the easiest ways to ensure that your loved ones are cared for in your absence is to buy a good term insurance plan. However, ensure that you choose an adequate sum assured amount.
Why is a high sum assured important?
The entire point of investing in a term insurance plan is to ensure that the pay-out is sufficient for your family’s needs in your absence. While you are unfortunately absent, your family is left to grapple with the emotional trauma of losing you and also dealing with the aftermath of your stopped income. Life must go on, and so do expenses that your loved ones can hardly pay for unless they incur debt from relatives, or sell some assets, or have another family member finding employment.
Term insurance pay-outs can finance a range of future eventualities since they are substantially high than other insurance monies. The money can be used to pay spousal support, children’s education costs, emergency medical costs, unpaid debt, household maintenance and bills, urgent home repairs, current investments, etc.
The higher the sum assured, the more comfortable your loved ones will be without compromising on their dreams or the lifestyle they are accustomed to.
How to calculate the right sum assured amount?
Use the insurance provider’s term insurance calculator to arrive at the right sum assured amount. If you don’t know how much it should be, consider two important factors:
- It should beat future inflation
- It should be a sum that is at least 10 times your current annual income. If there are unpaid loans like home loan or a second mortgage on your house, count that amount in the sum assured
The number you arrive at after using the insurance calculator is the ideal sum assured amount. Check the corresponding premium payment before you proceed to buy the term plan.
How to buy term insurance online
- Select the right plan for your family’s needs from a leading insurance provider in India.
- Inform the policy nominee about the terms of the plan, its benefits and how to file a claim.
- Use the online term insurance calculator to find the sum assured and premium payments on the plan.
- Study all plan benefits and riders by downloading the policy document.
- Pay the premium on the plan to initiate the purchase process.
- Next, fill out the online proposal form and submit the required documents for KYC.
- Every year, you can renew the policy online as per the reminder that your insurance provider sends.