The increasing cost of living and inflation rates demands that individuals plan for a secure financial future, which includes appropriate life insurance coverage. Therefore, it is necessary to not only buy term insurance online but also increase the sum assured at different life stages. Doing so ensures that the policy provides adequate financial protection through the term life plan to the policyholder’s family and loved ones in case of their untimely death.
In this article, we’ll delve deeper into the importance of increasing the term insurance coverage at different stages of life and why it is critical for one’s financial security.
Importance of increasing the Sum Assured at Different Stages of life-
- Based on your changing goals
A term plan with increasing sum assured can help you get adequate financial coverage for all your goals. Financial goals can vary from short-term to long-term, and the sum assured should be sufficient to meet those goals. For example, short-term goals include paying off a loan, while long-term goals may include saving for a child’s education or retirement.
For instance, if an individual has taken a home loan and wishes to pay it off over 20 years, it is essential to ensure that the sum assured of their life insurance policy is adequate to cover the outstanding loan amount and interest, should the individual pass away before the loan is fully paid.
- Tackle Inflation
Inflation is an essential factor to consider while deciding on the sum assured of your term insurance online. This is because the value of money decreases over time due to inflation, which means that the same amount of money will have a lower purchasing power in the future. As a result, if the sum assured of a term plan is not adjusted for inflation, it may not provide adequate financial protection to the policyholder’s family in case of their untimely demise.
With Tata AIA term plans, you can avail of the Life Stage option, where you can increase your policy coverage at every important milestone of your life. Hence, important events such as marriage and childbirth that come with greater responsibility are secured through the increased coverage of your term plan.
- Benefits & protection of family
A term plan can provide a fixed monthly or a lump sum payout to the nominee in case of the policyholder’s untimely demise. The monthly payout can support the policyholder’s family financially and help them meet their regular expenses, such as rent, bills, groceries, and education expenses.
However, the monthly payout amount is typically determined based on the policy’s sum assured. Hence, if the sum assured is insufficient, the monthly payout may need more to cover the family’s expenses. Therefore, increasing the sum guaranteed to ensure that the monthly payout benefit is adequate and provides the necessary financial support to the policyholder’s family is crucial.
Conclusion
In conclusion, a term plan with increasing sum assured critical to secure one’s financial future and protect their loved ones in case of their untimely demise. At different life stages, individuals can ensure that the policy provides adequate financial protection based on their changing financial goals, tackles inflation, and offers additional benefits like monthly payout.
Therefore, investing in an appropriate life insurance policy and increasing the sum assured is crucial in financial planning. In addition, it can provide peace of mind to individuals and their families.