Understand the Importance of a Term Plan!

Prashant is a highly paid executive earning Rs 11 lakh per year. Ragini his wife, is a home-maker. They are blessed with two children, aged 11 and 9. Prior to the birth of her kids, Ragini worked as a kindergarten teacher. On Prashant’s income, they are able to comfortably afford their living expenses, school fees, and the mortgage and have accumulated 50,000 in savings.

In spite of a regular fitness routine, Prashant had an unexpected heart attack while he was jogging one morning. Due to late admission in the hospital, Prashant lost his life. Although still mourning, Ragini has to take the stock of her finances. She thinks of returning back to work but after a long break and a mere salary of Rs 25,000 per month, she would be unable to meet the mortgage payments and private school fees. Ragini decides to sell the apartment and purchase an apartment in the outer suburbs. She also decides to enroll the children in a local public school.

After reading the above incident, can you identify a major financial security which was missing?

It could have saved Ragini and her children from financial trauma after Prashant’s death. The missing financial security could have been fulfilled by a term insurance plan. This would mean that Ragini and her children would not have the disruption of relocating while they were dealing with their grief. It would also mean that the children could stay at their current private school where they had their support network of friends. Best education was something that both Ragini and Prashant had aspired for their children and this could still be achieved. Ragini would not be forced to work full time and would be able to support her home and her children. Prashant’s family would be able to continue to maintain the lifestyle they had when he was alive.

Edelweiss Tokio Life – Zindagi Plus is a term plan which will not only provide life cover to the policyholder but also the spouse in the event of an untimely demise of the policyholder. This benefit is called the better half benefit. Under this benefit, after the death of the policyholder, a life cover will start in his/her spouse’s name. This will be 50% of the life cover of the policyholder, up to an amount of Rs. 1cr. The spouse won’t have to pay any premium and the nominee will also get the sum assured.

If Prashant would have opted for a term plan his family would have had a financially secure life.

In short, you must understand the importance of a term plan for you and your family in any unfortunate event.

Don’t let your loved ones become financially disabled if something happens to you.

Neha Panchal - Financial Content Writer

Neha used to be an Engineer by Profession and Writer by passion, which is until she started pursuing full-time writing. She's presently working as a Financial Content Writer, with a keen interest in all things related to the Insurance Sector.