Why we should by Term Life insurance

Term Life Insurance Plans are the best in India i would answer few queries which are generally raised to the above contention:

Term plan or Term Insurance Plan or Term Life Insurance Plan is a pure risk plan which provides a lump sum benefit to survivors in case of death of insured.

A.The Term insurance Plan does not provide Returns on investments?

Insurance is not a preferred instrument for saving, returns and liquidity. If your financial goals are saving, returns and liquidity then there are many instruments which on any day give better returns, have better liquidity and are better savings instruments than insurance.

Instruments like saving bank, Recurring deposits and FDR in bank or post office are better saving and liquidity options than insurance, Equity, Mutual funds, Debt funds give better returns and liquidity than insurance on any day.

But if your goals are security of your loved ones then Term Life insurance is a very good option.

B.I am healthy why should I invest in a term plan?

Health in incidental but looking at anecdotal data and changing life styles and better diagnostic and medical services chances of being affected by a morbid disease including life style induced disease is on a higher side and medical research proves Indian have propensity towards MID body obesity with diabetes and hypertension.

Secondly India has the highest number of casualties as a result of Road Traffic accidents. So chances of any eventually happening is more than ZERO , in an society where chances of untimely mortality is above ZERO investing in a Term Plan is a must and need of the hour.

C.I am unmarried or never plan to marry or have no children or do not plan on having children for whom and why should I buy term plan?

not being married or not having a child is incidental today but tomorrow it may/will change and because of improvement in living standard, easy availability of financing chances of a person leaving huge liability in form of Home Loans, Credit Card outstanding's , Motor Loans etc. is very high.

When a person jots down his / her financial goals for his/her life planning; making arrangements for settling outstanding liabilities in case of any eventuality is an important goalpost.

Nobody would like to leave his /her survivors to inherit a liability which will be a burden on their shoulder and affect their future adversely.

Buying a TERM Insurance Policy is future, long term financial planning not an investment goalpost.

D.Who can and should buy Term Plan and how much sum insured is enough?

Everybody who is in job, business, self-employed, professional should get a Term Plan. Being married or not married, having children or not is purely incidental to that time.

Human Life is unquantifiable and nobody can put a value to it but we can calculate our future liabilities and the following could be some pointers:

a. Present age

b. Present income or earnings

c. Future growth and increments

d. Future inflation

e. Future cost of living

A broad benchmark can be for a person aged around 30 years, with annual income of 300,000 per annum, should ideally look at cover which is 100 times present income IE Rs. 3 crore cover.

E. What is the ideal age to buy Term Life Insurance?

There is no ideal age to buy term plan but every moment is best time, but it is best one buys the cover before the age of 45 as after 45 many factors come into play and insurance companies put in many conditions and underwriting checks before accepting a risk.