How to ensure that your term insurance policy never lapses
Keeping your family financially secure with minimum effort
It was a shocker for the Mehta family when Sachin Mehta, suddenly had a stroke and died, leaving behind his wife and two daughters. He was only 48-years-old and had no medical conditions. He was the sole breadwinner of the family, with his daughters still in school. His wife, Shilpi, was worried about how she would take care of the family in her husband’s absence, pay for her daughters’ higher education, their wedding, and even meet day-to-day expenses. To her relief, Sachin had already ensured that all these needs would be fulfilled even in his absence by buying a term plan.
The Mehta family’s story is a testament to a serious reality of life that the financial commitments of a family’s primary earners continue even after they are no more. There are still bills to be paid and financial obligations to be met, like school or college fees, EMIs on homes or automobiles or household equipment, etc. Other short and long-term goals and aspirations have to be funded too. Therefore, while the emotional loss of such individuals is immeasurable, the financial impact of their absence can also be devastating. Having adequate life insurance helps to tide over these commitments, ensuring that the grieving family does not have the additional stress of coping with a financial burden as well. This is where term insurance comes in.
What are Term Plans?
There are various types of life insurance policies out there. Broadly, they fall into two categories – plans that offer pure life cover and those that have life cover and an element of investment too. The first category, which offers plain vanilla life insurance, are called term plans. These plans entail payment of relatively small premiums in exchange for the pay out of a comparatively large insurance cover, in the event of the death of the policyholder. Being the most basic form of life insurance, term insurance is the most cost-effective form of life insurance.
For instance, the Bajaj Allianz Life Smart Protect Goal, a Non Linked, Non Participating, Pure Life Term Insurance Plan offers a 25-year-old non-smoking male a cover of Rs 1 crore for paying just Rs 18[1] per day. Interestingly, unlike classic term plans, this plan offers the option to enjoy numerous other valuable features too, like the return of the entire premium at the time of maturity2, which is when the policyholder survives the policy term.
Need for Term Plans
