The ongoing pandemic has revealed what an unexpected event could do to your life. The resultant economic slowdown has impacted family earnings, and the loss of numerous lives has led to loss and grief for many families.

Never has the importance of having financial stability been felt more. Being prepared to handle uncertain events is crucial, particularly considering one's financial commitments. So how do you stay financially protected? Have you been introduced to the benefits of term insurance?

Let us discuss how a term policy can lend a helping hand during extreme financial distress caused by unexpected life events.

What is a Term Insurance Plan?

Term insurance is a pure life insurance policy that provides a lump sum death benefit to your nominee in case of your unexpected death. It is considered one of the best financial products to avail of a huge sum assured at an affordable premium. You can also increase or decrease the sum assured based on your commitments at different stages in life. The plans also offer many flexible features in terms of premium payments, payout options etc.

You can analyse, customise and buy term insurance online for maximum benefits. So let us go ahead and understand how to make the best use of a term policy and stay protected.

Here's How You Can Stay Protected with Term Insurance

If you have decided to opt for a term policy to ensure financial protection for your family during unexpected events, there are certain aspects that you need to focus on, keeping in mind your financial needs. If you account for these factors, you can get the maximum protection from your term plan.
 

1. Ascertain the right sum assured: As one of your primary responsibilities, you have to ascertain your family commitments in the short term and long term. It is important to focus on this assessment to determine the sum assured required in your term policy.

   
   For instance, if you are the only earning member in the family, it is necessary to derive an estimate of the daily expenses needed to manage the household, plan for your child's education, pay for your parent's medical expenses, etc., in your absence. It is advisable to decide on the sum assured based on these factors while simultaneously accounting for the inflation rate.




2. Decide the premium and the policy term: Once you have decided on the quantum of the sum assured, it is time to decide the premium and the policy term. Before determining the premium that is feasible for you, you have to analyse your steady flow of income and your current financial situation. Based on the extent of the amount you can afford to pay regularly, you can decide on the premium. You have the flexibility to pay the premium monthly, quarterly, semi-annually or annually.

   
   And, it is always best advised to choose a longer policy term for accumulating a huge sum assured with a reasonable premium. You can use our online life insurance calculator to try different combinations of the sum assured, policy term, and the premium to decide on the best option for you.

   
   You can use the Tata AIA life insurance calculator to determine the sum assured and the applicable premium based on the nature and extent of coverage you desire.




3. Choose the right payout option: Term insurance policies provide flexible payout options to accommodate individuals' financial needs. For instance, with the TATA AIA term policy, you can opt for the death benefit as a lump sum or regular income. For our other plans, you can choose the starting point of the income based on your preferences.

   
   If you are planning to retire early, such a customised term plan is an ideal option. You will start receiving the income from the income start age you have mentioned while also ensuring the death benefit is available for your family in case of your unexpected demise.




4. Choose the required add-on rider^# options: Term insurance policies also provide a range of add-on rider^# benefits for increasing the financial assistance you can get during difficult medical scenarios. Some of the most prominent riders^# are the critical illness rider^#, accidental death benefit rider^#, and the terminal illness rider^#.

   
   For instance, with the critical illness rider^#, you can get the insured amount payable during the policy term for your treatment and hospitalisation expenses in case you are diagnosed with a critical illness.




5. Invest from an early age: Now that you have understood some of the important parameters of a term policy, it is essential to invest early to reap the best benefits at an affordable premium. Furthermore, it is extremely unlikely that you could have a pre-existing illness or a specific health disorder at a younger age.

   
   Therefore, the risk of death is extremely low. Insurers consider these factors while deciding the premium. Therefore, investing early with more sum assured and a lesser premium rate is a smart decision.




6. Stay insured: The final and most crucial point while ensuring death benefits with a term plan is to stay insured during the policy term. Many people decide to surrender the policy or miss out on the premium payments owing to temporary financial stress.

   
   However, if you plan to manage unforeseen financial circumstances with a contingency fund reserved for such purposes, you can get the desired protection for your family.
    

Conclusion
 

Uncertain events and the resulting financial commitments can turn out to be a hazard for your family, especially in your absence. Term insurance in India has been introduced to help individuals get protected against such events with precise planning. However, it is important to invest in such plans smartly for the best benefits.
 

Ascertain the sum assured based on your family commitments, decide on the premium, and policy term, choose the necessary riders^# and payout options, invest early, and most importantly, stay insured for protecting yourself to the maximum extent possible!
 

L&C/Advt/2023/Jan/0279