Buying a new home? You should consider a term plan!
A term plan is an affordable insurance product that provides excellent protection. If you’re buying a new home, you should consider insuring it wisely.
So you’re purchasing a new house – congratulations! Your joy at achieving this major milestone in your life is unparalleled, and you should be justifiably proud of your most important acquisition.
However, stop for a minute to think about the kind of insurance you are taking to protect yourself and your loved ones from both natural calamities and such events as your death. If you have a loan taken against the house, your death will pass on the liability on to your family. Have you thought about securing them in case of unforeseen situations that may leave them bereft and without a home?
We live in high pressure times, and there is no saying what tomorrow will bring. A good insurance product will hold you in good stead in the future. So if you’re mulling over insurance options for your home, you should be looking at a good term plan. Read More
What is term insurance?
A term plan is an insurance product that allows for low premiums to be paid for a high sum assured. These are extremely popular among customers and term insurance is one of the fastest growing segment in insurance today, all over the world.
When you buy your new home, the bank or financial institution lending you money in lieu of a bank loan will normally ask you to buy insurance. Buy a term plan to meet your home insurance needs. The term plan can be of an equivalent value as your housing loan and for the same tenure. In case of your death, your family will not lose the home for not being able to repay the outstanding loan amount. The insurance provider will repay the loan.
Term plans are cheaper
The premium to be paid for a term insurance plan is more affordable than other premiums.
Take the advice of your financial consultant before you invest in a term plan. A group term plan will help insure all family members. Individual term plans are more expensive, but it you can buy them with a family plan, too. Do your research about the different term plan options offered by major companies before choosing a product.
Selecting a term plan
Zeroing in on a suitable term plan will be based on a number of factors, viz.
Your requirement: Determine how much cover you need, the preferred tenure and whether it is possible to increase the sum assured later (than the projected amount when taking the plan).
- Your broker or an online calculation tool will help you assess your actual requirement.
- Factors deciding your requirement are your age, your annual income, the state of your health, and number of dependents.
- The coverage should take into account future inflation and increased expenses. Pick a plan that provides coverage amounting to six to ten times your annual salary.
- Select a tenure that cushions you at least till age 70.