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Term Insurance Plans for Entrepreneurs: A Complete Guide

02-08-2022 |

Term insurance is the simplest and purest form of life insurance. Its core purpose is to provide financial support to the family members of the sole or co-income earner. The support given is in the form of a monetary payout to the family in the aftermath of the breadwinner’s unforeseen death.

 

However, most term insurance plans also provide additional financial security during temporary but life-altering eventualities like an accident, critical illness, physical disability caused due to an accident, job loss, and more. You might think that this kind of financial protection is necessary only if you have a 9-5 or corporate job and not if you are a business owner.

 

Because if being a business owner means you have the potential to rake in high profits, it also means you are also prone to risk and more financial loss. This is why you need to be all the more vigilant about your financial security and your loved ones.

 

Here is where a term insurance policy can help. 

 

 

Why Do Entrepreneurs Need a Term Insurance Policy?

 

Term insurance for business owners or entrepreneurs is necessary for the sole fact that their family can stand to lose out on a lot in their permanent absence after death. Most successful entrepreneurship comes at the cost of burning one too many midnight oils, 24x7 work, and hardly any time-offs. The consistency and grind are real with running a business, and the chances of making losses are always at the door.

 

Moreover, most entrepreneurs take on the responsibility of providing for their entire families. Even though the trend in sole working spouses is weaning and more and more couples are co-income earners in today’s times, the majority of entrepreneurs still have non-working spouses. So, having a financial backup is a necessity, not a luxury.

 

 

Why Term Insurance For Entrepreneurs is a Good Investment?
 

 

  • It provides financial support to your family in your absence

    One of the foremost reasons a term insurance policy for entrepreneurs is crucial is to secure a regular income source for their loved ones in their absence. A term insurance plan offers a good payout or sum assured that can help your cherished ones continue to lead their lives.

    They won’t have to compromise on their lifestyle or neglect their goals because of the sudden absence of income. Instead, they will have a replacement with the term insurance payout.

 

  • It takes care of pending loans and liabilities

    Even in your unfortunate absence caused due to demise, you wouldn’t want your business to run out and the efforts you put behind it to go to waste, especially because of a few pending debts and loans. Unless you leave your business in good hands, it might face financial hardship without your presence. To ensure any pending loans do not get in the way of your continued success, you will require a term insurance policy. The sum assured received from a term insurance policy might help you in clearing obligations on your part and give your business time until someone capable steps up to run it.

 

  • Ensures that their business continues to run

    A successful entrepreneurial venture depends on the loyalty and happiness of its employees. Without their boss around, employees will already face an emotional loss. So, a financial loss should be the least of their worries until they can find their way to other jobs or ventures.

    A term insurance plan can take care of your workplace family as well. Your kin can use the payout received to pay your employees their regular salary in your absence. This way, you secure the lives of your employees and their families. Plus, you don’t lose out on capable and skilled team members who can pick up the pieces in your absence.

 

  • Provides additional protection during life-altering eventualities

    Death is not the only instance where insurance for entrepreneurs can come to the rescue. Even during debilitating eventualities like accidents, physical injuries caused by accident, or the development of a critical/ terminal illness, you can rely on the rider# benefit offered under a term insurance plan.

    A rider# is an additional cover that provides an extra layer of financial protection to you and those around you during the aforementioned situations. Receiving this added support can help things run by while you regain the strength to get back on your feet.

 

What to Look for In Term Insurance for Entrepreneurs?

 

  • The tenure of the term insurance plan

    One of the most crucial features you should look for while getting offline or online term insurance is the tenure of the term insurance plan. A corporate individual might work only till the age of 55-60, so they will need a shorter tenured term insurance plan. But as an entrepreneur, you might have to remain involved in your business operations for a longer time, say up to 65-70 years. Pick a tenure depending on your ideal retirement age.

 

  • The premium rates of the term insurance policy

    Premiums are something you will have to pay to the insurer to avail of the benefits under the term insurance policy. 

 

  • The sum assured under the term insurance policy

    While getting term insurance for entrepreneurs, it is a pratice to calculate the approximate or exact amount of coverage you will require. Choose the sum assured amount with care as this will support your family and cover any business expenses for a specific duration. Generally, most people get term insurance based on their current income.

 

 

To Conclude

 

A term insurance policy is vital for everyone earning an income to support their loved ones. As an entrepreneur, providing for your family is an even bigger duty. Term insurance can help ease this responsibility and take care of things when they go unpredictable and threaten to steal your family’s peace and business success.

 

L&C/Advt/2022/Jul/1733

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TATA AIA Life Insurance Co. Ltd will send you updates on your policy, new products & services, insurance solutions or related information. Select here to opt-in.

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TATA AIA Life Insurance Co. Ltd will send you updates on your policy, new products & services, insurance solutions or related information. Select here to opt-in.

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Tata AIA Life Insurance

A joint venture between Tata Sons Pvt. Ltd. and AIA Group Ltd. (AIA), Tata AIA Life Insurance is one of the leading life insurance providers in India. We post everything you need to know about life insurance, tax savings and a variety of lateral topics such as savings and investments in this space. You can access and read a host of different blogs, articles and pages at the Tata AIA Life Insurance Knowledge Center or get in touch with us with any queries or questions!

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Disclaimers

  • Insurance cover is available under the product.
  • The products are underwritten by Tata AIA Life Insurance Company Ltd.
  • The plans are not a guaranteed issuance plan, and it will be subject to Company’s underwriting and acceptance.
  • For more details on risk factors, terms and conditions please read sales brochure carefully before concluding a sale.
  • This blog is for information and illustrative purposes only and does not purport to any financial or investment services and do not offer or form part of any offer or recommendation. The information is not and should not be regarded as investment advice or as a recommendation regarding any particular security or course of action.
  • Please know the associated risks and the applicable charges, from your Insurance agent or the Intermediary or policy document issued by the insurance company.
  • Every effort is made to ensure that all information contained in this blog is accurate at the date of publication, however, the Tata AIA Life shall not have any liability for any damages of any kind (including but not limited to errors and omissions) whatsoever relating to this material.
  • #Riders are not mandatory and are available for a nominal extra cost. For more details on the benefits, premiums and exclusions under the riders please refer to the Rider Brochure or contact our Insurance Advisor or visit our nearest branch office.

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