Your dreams for your family are big
If you are in your late twenties, having a doting family consisting of an adorable kid and a loving spouse, you will definitely be dreaming about giving them all the good things in life. You will want your kid to be studying in the best school and college. You’ll want to holiday in the most exotic of destinations with your spouse. Have you ever wondered about what happens to all those dreams if you are no longer with them in their journey of life?
What happens when you are not around?
If the thought of securing their future has not crossed your mind till now, you need to focus your attention on this aspect of life. Think about how to secure your family so that in the event of something unfortunate happening to you, they will not be inconvenienced in any manner. Think about what will happen to your child’s dream if you are not around. Would it not be prudent for you to do something today so that their tomorrow is secure.
A term plan
They need to be given the reassurance that if God forbid, anything happens to you tomorrow, they will not be left stranded and will not have to abandon their dreams because of lack of financial strength. A term plan is the best and by far, the cheapest way in which you can secure your family’s future. A term plan is a simple, traditional type of insurance plan which gives the beneficiary of the life insurance policy a fixed sum on the death of the Life Assured. For instance, if you buy a term plan with sum assured of Rs.1 cr for a term of 40 years, and you meet with an untimely demise within that period, your nominee will get the amount of Rs.1 cr. This amount can be used by your family for meeting their living expenses and will help in keeping their EMI’s regular. This will serve as income replacement till the time that something permanent is not worked out. It may also help them to pay off some loans or offload some liabilities. If for example, you’ve taken an education loan for your child’s higher education, the claim amount can help in paying off that loan.
The best part about a term plan is that for a lesser premium, it gives a much larger cover. For instance, if you buy a market-linked plan, let’s say it gives you a cover of Rs.2 lacs for an annual premium of Rs.10000/-, the same premium can fetch you a term cover of Rs. 1 cr. This is an indicative example only and the actual premium can only be computed on the basis of details like age, gender, tobacco consumption etc. Some plans also have the facility of monthly payouts, which will give your family a steady income for some length of time.
What happens if you don’t buy a term plan
When you are not there to support your family, what will happen is that your family will suffer emotionally as well as financially. The emotional trauma may reduce as time passes, but the financial impact cannot be minimised without financial support. In such times, the family is mostly left at the mercy of relatives and friends. Even though your spouse may be working, it will still be difficult for your family to suddenly cope with only one income as their lifestyle would have already been used to dual income. If you are the sole bread-winner of the family then opting for a term plan is of utmost important because your family members are solely dependent on you for their financial needs. A term plan is an income replacement plan that will protect your family from financial distress, it’ll take care of your EMIs, children’s education, etc. In this way, a term plan ensures that your family is secured even in your absence. It’s a wise decision to secure your loved ones and live stress-free.