All of us pass through several stages in our life, and each step calls for different goals and plans. These include your first job, marriage, children, retirement, and such. Hence, it is prudent to plan for your goals beforehand as it will help you achieve them. Similarly, the financial liabilities of a person are not the same. They vary at different stages in life.
One solution that will help you in all your life stages is opting for a term insurance plan. It is a necessity irrespective of your income at all ages. When you are young, you can get the best term insurance plan offering a higher sum assured at a much lower premium.
Once you settle in your career and probably get married, your responsibilities will increase. At this stage of life, the best term insurance plan would be the one that provides monthly income. You can consider opting for a monthly income plan so that your family gets a regular payout to meet financial needs in your absence.
In this manner, with every stage in life, the importance of having a term insurance plan increases. But you may wonder that with increasing responsibilities, managing a stable everyday life and a term insurance plan can be challenging. The increasing lifestyle cost may make you re-think buying an insurance plan. However, with the following ways, you can ensure that it fits in your budget:
Choose an Adequate Life Cover
To ensure that you choose the best term insurance plan in India, you need to evaluate the life cover you want. And to calculate that, you will require considering your current income. Before, ‘ten times the annual income’ is one thumb rule to decide the life cover. However, high inflation and rising living costs now want you to opt for at least 20 times your annual income.
While selecting an adequate life cover, you should also consider your financial liabilities like outstanding loans and debts. They will help you choose the sum assured that you require. It will be wise to make sure that the coverage is large enough to meet all your existing liabilities if you are not around in the future. In this manner, your loved ones will not feel burdened with debts.
Long Term Plan and Extended Premium Payment Period
It is a pre-requisite to consider the term for which the policy coverage will last while buying a term insurance plan. Since it varies from one insurance provider to the other, it is advised that you only select the best term insurance plan after researching thoroughly. You should note that longer duration term insurance plans are generally better than the shorter duration plans. It is so, as a longer tenure means more savings.
To make your term insurance budget-friendly, you can opt for an extended premium payment period. With a longer premium payment period, the premium that you require paying will be considerably lower. You can pay the premium monthly, half-yearly, or yearly, depending upon your convenience. Thus, you can enjoy the benefit of having a term insurance plan for a more extended period without worrying about it fitting within your budget.
Add Suitable Riders Only
The best term plans in India ensure that you can add riders to a basic insurance plan by paying a nominal increase in your premium amount. But before you choose any of the riders, you should keep in mind your needs. There are many rider options available for term insurance plans. But all of them may not necessarily be of use to you.
For instance, you should opt for a critical illness rider if your family has a history of critical illnesses. Thus, you can avail a lump sum amount for your treatment when required. Similarly, you should evaluate each rider and its purpose for you. Ensure that you do not add a rider that will not prove useful and instead burden you with financial liabilities.
Limit Your Miscellaneous Expenses
Living your life entirely is essential to do. But it is also wise not to go overboard with your expenses. Although you live in the present, you should think about your future as well. And financial planning plays a significant role in doing so. If you incorporate a term insurance plan in your monthly budget, you will be able to secure your future and save.
Best term insurance plans in India also provide tax benefits. You can avail of these term insurance tax benefits rather than spending money on miscellaneous expenses. As per the Income Tax Act under Section 80 C, the premium paid towards a term plan qualifies for tax benefit. You are permissible to claim a tax deduction of up to Rs. 1.5 lakh a financial year.
You can follow these ways to make the best term insurance plan in India budget-friendly for you. Doing so will allow you to live a secure and stress-free life. You can opt for a reliable insurance company that offers various plans for policy buyers with different needs.