Life is filled with uncertainties; you never know what might happen the next moment. How would you ensure the financial security of your family in your absence? There are plenty of options available to secure your life and be prepared for the uncertainties. Among all the mechanisms, insurance plans are the most secure way to keep things in balance. There are different types of insurance plans that suit different requirements of yours.
Term insurance is a preferred plan that gives you an assured sum for a specific period of time. You get a death benefit as well, so when the insured dies before the maturity, the nominee will get the sum assured. Term insurance is part of life insurance plans. You can think about a term plan as an umbrella that covers all your financial needs. There are plenty of things that you need to determine before taking up a plan.
Questions You Need To Ask Yourself Before Deciding The Duration of Online Term Plans
- What financial difficulties may arise in your family in the coming future?
- What contingency plan is needed to cover your liabilities?
- What are the large expenses that can arise in the future?
- Is the outstanding amount left after paying the debts enough to cover your family’s financial needs?
Once you find answers to these questions, you will be able to understand the right duration and also the sum to be assured for a term plan.
Factors to Consider While Deciding the Duration of Your Term Plan
The first thing to consider is your liabilities. You need to check your current liabilities and the ones that will arise in the future. For instance, if you have a home loan for 20 years, your term plan duration must be at least 20 years. Liabilities will give you a clear idea of planning your term plan.
The long tenure can be often expensive, so it is essential to consider the affordability as well. You would not want to stress yourself financially in paying the premiums. Hence, check whether you are able to afford the premium within the given duration.
The family profile becomes an essential element to choose the duration of your term plan. Let’s take an example: if you have a child and planning for his/her education, then a term plan with a duration of 18-20 years would be sufficient. This way, you can consider your family needs while adjusting the tenure.
Dependents and Commitments
Can your family survive without you or any financial backup left by you? Maybe not. Hence, it is highly essential to consider your commitments towards your dependents. If you have debts on yourself and worried about how your family will take care of them after you, you can take a term plan with similar liability duration.
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