Wondering what term life insurance is all about? The moment you start earning, you will notice your well-wishers are pushing you towards having term life insurance. You will receive a lot of advice on how to financially plan your life and if life insurance has been one of the topics, then you should pay attention to it.
Before we get to the importance of term life insurance and all factors to consider, you should know what term life insurance means. In this blog, we are going to talk about term life insurance in general and how to choose the right one.
What is term life insurance?
The insurance which provides life cover for a certain period is called term life insurance. It is one of the classic life insurances and in case you meet with an accident, then due to the insurance, your nominee will receive the pre-defined death benefit.
The main aim behind term life insurance is to provide your family with some financial stability after there is a loss of job due to your unfortunate death for whatever reason.
Who all require term life insurance?
Before we get onto the part where we talk about who needs life insurance, we should mention the consequences that come with an untimely death. In case of your death, your family will experience a loss of income. It might be a graver problem if there are loans that are yet to be repaid.
To decide whether you need term life insurance, you have to look at the amount of dependency your family has on your income. In simpler terms, the term life insurances are important if your family’s goals, liabilities, and financial stability are majorly upon your income.
What is the right age to get term life insurance?
The moment you have dependents in your life, you should plan for term life insurance to secure their future. Regardless of your family liabilities and long-term goals, the smartest and safest option is to get term life insurance right away in case you haven’t already.
The older you get, the premium you are required to pay for a cover will increase. Normally a term life insurance plan should be functioning till you having a job or till the time you have liabilities like loans to repay.
How to select the right term life insurance?
We advise you to follow the golden rule while deciding on term life insurance. Your term life insurance should cover up to 20 times your annual CTC or income in case you are less than 45 years. But for people above the age of 45, your life insurance should cover up to 15 times your annual income.
To conclude, term life insurance is securing your family’s finances for the future in case you meet with an untimely death. If you haven’t already decided on a life insurance cover yet, then you should consult your financial advisor today to get yourself insured.