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Why Term Insurance Is Important In the Financial Planning Checklist Of Newlyweds

A newly married couple are usually excited to start a new chapter in their life's journey. And, financial planning is one of the prominent decisions to undertake as a collective. The extent of your financial planning and discipline defines your standard of living and your ability to attain your future goals, including your retirement plans. It also affects the extent of your preparedness to face unforeseen circumstances in life.
 

So what financial products constitute the checklist for financial planning? Insurance policies, savings plans, retirement solutions - the list goes on. However, for the high coverage it offers at a low premium, a term insurance plan should be a top priority for everyone, and newlyweds are no exception to this rule.
 

Let us understand why term plans are a pivotal part of the financial planning for newlyweds. But firstly, let us discuss what a term insurance policy is!
 

 

What Is A Term Insurance Plan?
 

Term insurance is the most basic form of a life insurance policy. It is a contract between you and an insurer that promises the payment of a lump sum death benefit to your family in case of your death during the policy term. It can provide more sum assured at an affordable premium, particularly if you save in it early in life. There are also add-on rider# benefits that can enhance your life cover by providing the necessary financial assistance in unprecedented situations.
 

So, why is term insurance deemed necessary in the financial planning checklist of newlyweds? Here are a few pointers that can help you understand this.
 

 

Importance Of A Term Insurance Plan In The Financial Planning For Newlyweds

 

 

  • Ensures financial security - When you start sharing your life with a partner, it is important to discuss and share your individual and combined financial responsibilities. And, if you become the only earning member in the family, it becomes your responsibility to secure your family's financial future. This entails ensuring a financial resource to fund their survival in your absence as well as helping them accomplish their financial goals.
     

    If you happen to be blessed with children in the future, then the extent of your responsibilities and financial obligations will increase. The real challenge is to plan for your future finances in the present and ensure that there is no gap between your family's earnings and expenses, even in your absence. A term policy is an excellent financial product that can serve you in this regard. It will provide a lump sum death benefit to your family in the event of your passing during the policy term.
     

  • Option to include joint life cover - If your life partner is employed, there is always the possibility of sharing the major expenditures of the family amongst yourselves. Therefore, extending the life cover to your spouse is extremely important. And, even if your life partner is not employed, there are certain responsibilities that they may have in the management of the family.
     

    For instance, if your life partner is a housewife, she might take care of your children, cook for the entire family, and work on the necessary household chores. In case of her unexpected demise, these tasks must be allocated to another person, for instance, a domestic help. And it shall be an additional expense for you. Term insurance in India provides you with the option to have a joint-life cover for your spouse.
     

  • Modify plan based on evolving needs - As a newly married couple, you may not be able to precisely estimate your future expenses. For instance, the expenses related to your personal growth, such as purchasing a new house to increase your assets, planning for your child's education, marriage, etc., may require substantial funds.
     

    You can modify your term insurance plan according to your evolving lifestyle and necessary future commitments. This is possible due to the flexible features included in the product. For example, you can increase the life cover when you are blessed with a baby and decrease it when you pay off some of your highest debts with your savings or additional income.
     

  • Extremely affordable option - Of all the life insurance policies available in India, term insurance with protection has the demand owing to its cost-effective features. It offers more sum assured at a lesser premium rate.
     

    At Tata AIA, we have introduced distinct features in our term plans to ensure maximum benefits for our policyholders. For instance, the TATA AIA term plan offers a lesser premium rate for female policyholders.
     

    Additionally, you can use the Tata AIA  online term insurance calculator to determine your premium outflow and find the most cost-effective plan for you and your spouse.
     

  • Helps you maintain your lifestyle - A newlywed couple may need to make a substantial initial investment for their lifestyle, including buying or renting a house, buying furniture, utensils, etc. Furthermore, the expenses of vacations can also be quite high.
     

    Furthermore, once you have children, ensuring their health and well-being become your priority. Due to an unexpected event in life, if you happen to become a single parent, you need not compromise on the standard of living of your family, and a term plan helps you in this regard.
     

  • Option to add riders# - Term insurance for newly married couples can also be enhanced by add-on rider# benefits. The accidental death benefit rider#, terminal illness rider#, critical illness rider# etc., are some of the common riders# preferred by our policyholders.
     

    For instance, if you happen to be rash at driving, there is a high probability of you getting into accidents. In that case, you can take the accidental death rider# and have financial security in such events. Such a cover will provide a lump sum death benefit to your family in the event of your death due to an accident.  It is, nevertheless, advisable to drive safe.
     

  •  

    Conclusion
     

    The life of a newlywed couple tends to begin with beautiful moments. It includes structuring the current life and simultaneously planning for the future. And, planning for the future includes securing it for your new family in your absence.
     

    With a term insurance plan, you can manage your responsibilities. A term policy is extremely cost-effective, flexible, includes rider# options, and has the provision to extend a joint life cover to your spouse. Therefore, as a primary decision post your marriage, you must include term insurance in your financial planning checklist.
     

    L&C/Advt/2023/Feb/0560

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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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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 it 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.
  • #Rider is not mandatory and is available for a nominal extra cost. For more details on benefits, premiums, and exclusions under the Rider, please contact Tata AIA Life's Insurance Advisor/ branch