The key to leading a healthy and happy life is securing your present while making provisions for your family’s future. In today’s testing times, it is evident that a life insurance plan is the need of the hour, and the ongoing coronavirus pandemic has only made it more necessary than just a tax-saving tool.
Not only are people understanding the importance of living a healthy lifestyle, but they are also leaning towards securing their family’s financial wellbeing by opting for term insurance. Gifting your loved ones, a stress-free life is possible if you make plans for securing their future early and make savings a habit.
It is important to find the best term insurance policy and customise it to your needs before you sign on the dotted lines. Here is a checklist of everything you must do before you zero down on the plan and insurer of your choice:
Know Your Financial Requirements
Before investing or saving, every earning individual has their share of expenses and payments, which need to be accounted for. Right from your home loan or car loan EMIs to saving for a wedding and from providing education to your children’s to investing for their marriage, a lot of expenses can come in the way of your savings.
Paying off credit card bills and putting money aside for your daily or monthly expenditures is crucial to any financial plan. Besides the obvious expenses, it is also important that you have emergency money stashed aside for any unforeseen circumstances that you or your family members might face in the short or long term.
Understand Inflation And Its Impact On Your Savings
The rate of inflation is a very important factor when it comes to planning finances and making provisions for the future. Your expenses in today’s date and time will be different from the expenses towards a similar goal five to ten years from now. Understanding the impact inflation rate can have on your earnings, savings, and expenses will help you plan better and save for your family’s financial security with higher accuracy.
Compare Your Term Insurance Plan From Different Insurers
If you know what is term insurance, then by now, you must also know how crucial it is in your financial planning strategy. When it comes to buying a term insurance plan, make it a point to do your due diligence and shop around. Get quotes from leading insurance companies and compare the term insurance plans of different insurers.
One factor that can help you choose the ideal term insurance is how high of a claim settlement ratio can a particular insurer guarantee because that ensures that your policy’s claim process will be stress-free for your family.
Another factor to consider when choosing an insurer is looking for the additional riders that they offer with the term insurance plan. From accidental benefit to partial or complete disability and from waiver of premium to opting for a survival benefit term plan, you will have many options to pick from.
Remember to customise your term insurance plan keeping your needs in mind and anticipating your family’s needs in the future as well, because an additional rider can make your policy solid.
Use Online Calculators
With the help of online calculators, you can easily get an estimate of your term insurance premiums. If you have the estimate, then it becomes easier for you to plan your expenses and investments accordingly. A term insurance calculator can help you plan your finances and make provisions for your premiums in advance.
You can also decide on your premium paying frequency based on the amount that the calculator shows, i.e., quarterly or yearly premium payment. These online calculators are completely free of cost, and they offer accurate calculations in less than a few seconds, making it easier for you to compare term insurance plans from different insurers.
Save Your Taxes With A Term Insurance Plan
Not only is term insurance a great way to secure your family’s financial wellbeing, but it also allows you to avail tax benefits on the premiums you pay towards the policy. According to the latest update, you can save up to Rs. 1,50,000 in tax with the old tax regime, and one of the instruments under Section 80C of Income Tax Act (1961) is premium paid against a life insurance policy. You can use a calculator to know your monthly premiums and ensure that the annual premium does not exceed 10% of the sum assured in your term insurance policy.
Remember to do your due diligence when it comes to buying a term insurance plan and choose a trusted insurer with a higher claim settlement ratio so that your family does not face too much trouble when the time comes for them to request the claim on your policy. Take the first step towards securing your family’s future and financial wellbeing by buying term insurance and gift them a worry-free life, even in your absence.