When you think of all the uncertainties of life, purchasing term insurance plans sounds like a necessity. After all, you would want your loved ones to be financially secure all through their lives, regardless of your presence. In this regard, splitting term insurance plans is a better idea than taking an individual plan.
Who should buy term insurance plans?
The prime earning member of a family needs to have term insurance plans. It must be purchased as a protection tool that can take care of the financial needs of a family in case the policyholder passes away untimely. The important thing to keep in mind is that anyone with a family and liabilities like car loans and home loans needs to buy term insurance plans.
Also, there is no need to wait to reach a particular age to purchase term plans. It is better to buy a plan right after you begin working. If you start early, then you can get a low premium for the insurance cover.
Top three benefits of splitting the term insurance cover
Splitting term insurance plans are helpful in several ways, right from offering financial backup to getting an extended coverage period.
Term insurance can provide cover for an extended period. For instance, if you buy a policy at twenty-five years with a 30-year tenure, then term insurance plans can cover you till you are fifty-five years of age. However, you should ideally have the cover till you are sixty-five because the money is needed more during the later stages of life. Thus, instead of remaining unprotected for ten years or purchasing another plan for ten years, it’s better to split the policy to extend the cover.
Covering the financial commitments:
You might have taken loans for various reasons. In case of your demise, the lenders will go for your savings and assets, leaving your family exposed to financial hardship. To avoid such an incident, a policy can be split like this: take a home loan of INR 30 lakh while applying for term insurance plans of an equal amount.
When you’re alive, you’ll have to keep paying the policy premiums and EMIs. In your absence, the same insurance will cover your family and help them deal with all loans. You might close the policy or stop paying the premium after the loan is repaid.
The Indian populace is steadily going toward the nuclear families trend. For different reasons, newlywed couples prefer staying separately from their in-laws. Though the couple lives separately, they constantly remain in touch with the families and address their needs. For an owner of term insurance plans, splitting the policy can be helpful in funding both the families with the assured sum gained from it.
Now that you know all the benefits of splitting term insurance plans, make sure you go for this option while applying for the policy.