Term life insurance has always been considered the most reliable way to protect your family’s financial well-being. However, rising premiums in recent years have raised questions about whether it’s still the most affordable protection option.
Term life insurance has long been considered the cheapest and easiest way to secure a family’s financial security. But now, with rising premiums, the question arises: is it still the best option? Term insurance premiums have increased over the past few years. Insurance companies are now pricing insurance to account for rising medical costs and mortality risks. For example, while a 30-year-old would previously have to pay a premium of ₹7,000 annually for a cover of ₹1 crore, the premium now ranges from ₹10,000 to ₹12,000. Despite this, no other insurance product offers the comprehensive coverage that a term plan offers. Endowment and ULIP plans (ULIPs) offer attractive savings or investment options, but offer very limited coverage.
When is term insurance most useful?
Term insurance is especially important for those who are the primary breadwinners of their families. It ensures that the family remains financially secure in the event of the breadwinner’s demise. Whether it’s children’s education expenses, loan installments, or everyday expenses, this policy takes care of everything. Financial experts recommend coverage of at least 10 to 12 times your annual income to ensure your family’s future.
Where to Exercise Caution
When purchasing term insurance, many people, seeing the low premium, purchase a small cover, which later proves to be useless. It’s better to pay a slightly higher premium and obtain adequate cover. Some companies now offer ‘return of premium’ plans, which provide a refund upon policy completion, but these are quite expensive. Therefore, it’s wise to purchase a simple term plan and invest the remaining funds.
Online Term Plans Are Cheaper
Term plans purchased online are generally cheaper because they don’t require agent commissions. However, if you have insurance from your office, remember that it will expire if you change jobs. Therefore, it’s always better to have your own term policy. Despite rising premiums, term insurance remains the most affordable and effective shield for your family’s financial security.
