5 reasons to buy a term plan today

In times of financial uncertainty, it is often the steps we take today that can have an impact on the future. Too often we fail to correctly estimate how much money will be needed for future financial goals. Inflation and rising expenses eat into our monthly income steadily.

At the same time, we often fail to factor in one grim fact – we are able to support our families only as long as we are present with them. If we are not, our loved ones may face severe financial difficulties. The best way to remedy this situation is by buying a term insurance plan.

Consider the following reasons to buy a term plan:

1. It is affordable. Term insurance policies are among the most affordable insurance products in India today. This is because the premium payable is quite low. Hence, it is an ideal insurance product for those who do not wish to invest in expensive life insurance policies, but who would like to have sufficient life coverage for their loved ones’ future.
   
   
2. High sum assured. Though the premium on the term plan is quite low, the corresponding sum assured is not. In fact, term plans have some of the highest sum assured amounts across life insurance products in India. This large sum of money can be useful to your loved ones in your absence – many of their personal milestones can be achieved using this money.
   
   
3. Flexibility. Reputed insurance companies in India are offering flexibility in term plans. Apart from simple pure life insurance policies, they are offering different pay-out options and the chance to change the plan matrices if necessary. This was not possible earlier, when only simple term insurance was offered with a lump sum payout.
   
   
4. Low possibility of claim rejection. As per a new mandate from the IRDA (Insurance Regulatory Development Authority), insurance providers cannot penalise the policy holder on grounds of non-disclosure of facts two years after the policy becomes active. However, you must take care to furnish all the correct and latest information about yourself at the time of taking the term plan. This mandate means that future claims made on your policy will likely not be rejected, if your information is correct.
   
   
5. Best way to pay for the future. You may have created savings and made investments for the future. However, in times of high living costs and mounting expenses, these may not last for more than a few months. Realistically, it may not be possible for you to create a savings or investment fund to the tune of crores of Rupees. However, your term plan money can be upwards of Rs 1 crore. Hence, term insurance will hold your family in better stead.

Is India Ready For Another Gujarat 2001?

On November 13, 2016, while most Indians were busy exchanging their old notes at the banks, in another part of the world, New Zealand was rocked by an earthquake of magnitude of about 7.5 on Richter scale. About 232 aftershocks of the event were recorded in the country by GeoNet, leaving thousands of people stranded near the epicenter.

It brought back haunting memories of what happened in Gujarat back in 2001 and once again raised the question: Are we ready for such disasters?

What Happened in Gujarat?

While the whole nation prepared to celebrate its 52^nd Republic Day, Gujarat was shaken awake to one of the worst disasters in the history of India. On the morning of January 26, 2001, an earthquake of magnitude of around 7.9 hit this western state at 8:46 am.

It was a result of the Indian plate pushing towards the Eurasian plate in the North. Although the quake lasted for only two minutes, it claimed over 18,000 lives and 167,000 people were left injured.

The Destruction Caused

• Out of the 25 districts of the state, 21 were completely destroyed.
• Kutch was the most affected area and reported around 17,000 deaths.
• 7,065 children and 9,110 women were reported dead.
• Around 348 orphans and 826 widows were registered. While some were protected with life or term insurance, many were left financially crippled.
• The collective economic loss was around Rs. 99 billion.
• Out of those who were injured, a vast majority was left handicapped.
• Around 8,000 villages were affected and more than 3,000 health facilities were destroyed.
• Over 12 million houses were damaged, leaving thousands of people homeless.
  

The Response

It took years for Gujarat to recover from the disaster. The Gujarat Model of Development was formed to help the health, educational and industrial sectors reach new heights. About 300 international and 150 local NGOs were involved in providing assistance. Financially too, millions of dollars were used to make things normal again. Immediate relief of Rs. 500 crores was announced by the NCCF.

What transpired in New Zealand has once again underlined the importance of better future planning. Today, Gujarat stands strong but policies like term insurance and life insurance are the need of the hour to protect the financial future of your family.

To get these services is easier than it was ever before. Many banks these days also provide instant loans that can be used in times of crisis as well.