Why Entrepreneurs Need Term Insurance Plan

25-August-2021 |

Having your business endeavour is a thrilling experience. You get to explore a line of work you are passionate about, and you can work on your terms. However, when you are self-employed, you have additional responsibilities and an unstable income.

As financial stability is an important part of life, entrepreneurs must invest in the right financial tools for a promising future. Buying term insurance is the first step in the right direction. A term plan protects the financial standing of the policyholder’s family in the unfortunate event of their untimely demise.

Financial advisors recommend looking for an online term plan as it enables an easier comparison of different policies. This also makes it easy to check different term insurance quotes from the comfort of one’s home.    

 

Why is Term Insurance Important for Entrepreneurs?

A term plan is purchased to protect your loved ones from unpleasant scenarios. Aside from protecting your family, term insurance can help you extend this cover to your business as well. For example, if you have started a business with some partners, the payout from the term plan can help them advance on the dream you envisioned together, even in your absence.

While money cannot replace an individual, it can certainly help sail through challenging times. Term insurance for business owners will ensure that the financial goals of your family, as well as your business, are within reach even after your passing away.

Here are the term insurance benefits for self-employed individuals:-

  • Protection Against Unsteady Income

The usual 9 to 5 commitment that applies for a salaried individual does not bound a business person. However, the income source for the latter is highly irregular. This is especially true in the initial phase of the business, where one needs to pour in a lot more effort before the endeavour becomes lucrative.

In such an event, demise can lead to severe financial setbacks both for the family as well as for the business. Preventing such precarious situations, therefore, becomes a responsibility. This is where term insurance can come to the rescue and provide financial security to the business as well as the family.

To ease the insurance purchase journey, insurance providers encourage customers to buy an online term plan. You also get cheaper term insurance quotes when you seek insurance online.

  • Protection Against Business Liabilities

It will come to you as no surprise that businesses require capital investment to grow – whether it is for working capital or business expansion. Although banks can assist you with the finances, this adds to your liabilities.

As an entrepreneur, you cannot let the liabilities put you down because they will eventually lead to profit generation. However, if you were to pass away without having settled your liabilities, this will not only adversely impact your business but will also become a burden for your family.

Term insurance for business owners is meant to mitigate such risks.

  • Protection For Financial Dependents

Contrary to popular belief, term insurance is not a financial asset only for the married. Any individual who has financial dependents such as aged parents to look after must secure the life of their loved ones through a term plan.

While the world is now witnessing a transformation where both partners earn to provide for the family, there is still a certain section that only has one breadwinner who contributes to the finances of the house. A small family-owned business cannot alone supplement the needs of the family if the sole breadwinner was to pass away.

For such individuals, a term plan becomes the essential addition to their financial portfolio.

  • Transparent Financial Protection

When you are involved in your business, you cannot afford to spend time trying to decode complicated investment avenues. Term insurance is one of the easiest investments to understand. The policyholder simply has to make regular premium payments, and if something happens to them, the insurance provider will give the surviving nominees the death benefit.

Unlike other insurance packages, there are no complicated conditions associated with the rate of return or the coverage. A term plan is a pure life insurance cover.

  • Reasonable Cover

One of the greatest term insurance benefits is that it is a highly affordable cover. It gives a high sum assured for a reasonable premium amount. This premium is further lowered with an online term plan purchase.

It is this benefit that relieves a business person of their financial concerns because they get to invest their money into business instead of pouring in a high amount towards expensive investment avenues.    

 

Term Insurance Benefits for Business

Aside from the protection it offers to your family, term insurance also has business benefits. It can help achieve important business milestones. Here are a few ways in which a business benefits from a term plan cover:-

  • A term plan makes it easier to get business loans. No one knows better than an entrepreneur that to make money, it is essential to spend money. However, to get a loan, banks require certain documents that can show them that the loan can be repaid. Term insurance qualifies as a reliable financial backing to provide a loan against.

  • Several entrepreneurs would like their businesses to continue their legacy even after their passing. Term insurance is an important component of succession plans as it can help finance the business endeavour.   

 

Tata AIA term insurance plan offers a comprehensive protective cover to help you achieve your business goals fearlessly. It has a host of term plan options to address your financial requirements. The flexibility of premium payment methods and the choice of riders# further enable the customisation of the policy.  

 
 
To conclude

Self-employed individuals need to protect both their personal as well as business obligations and a term plan is the most affordable way to do so. If you are pressed for time, you can easily get term insurance quotes and policy information online.

While choosing a cover for your business, it is important to consider your outstanding debts and liabilities. If ignored, these liabilities will have to be looked after by the surviving beneficiaries, which might become troublesome.

 

L&C/Advt/2021/Sep/1581

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Disclaimer
  • 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 they will be subject to Company’s underwriting and acceptance.

  • For more details on risk factors, terms and conditions please read the 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.