A protection plan to help your family after you

One of the biggest fears of a sole earning member of the family is not death but what happens to the family if something were to happen to them. For that reason alone, banks and other financial institutions have devised savings tools like life insurance, savings plans, and schemes like fixed deposits and SIP for mutual funds. One must always set aside a fixed portion of their income for savings and insurances.

There are many different types of insurances and a good financial planner knows how to create an insurance package for themselves to protect their family. For starters, one must have life insurance plan, a health insurance, personal accident insurance plan and a critical illness plan. These plans ensure that your family’s financial needs are taken care of in case of your death, in case you contract a major illness, or you meet with an accident that leaves unable to work.

There are multiple types of life insurance plans to choose from as well. But if your main concern is to supplement your family’s income in your absence, then you must opt for a term insurance plan. A term life insurance plan is valid for a specific period of time and offers death benefit to the nominee in the event of the death of the insured. The premium for term insurance is low and is often the only factor that drives people to opt for term insurance.

Term insurance plans offer a lump sum payment to the family of the policyholder is case of his or her demise. This payment can be received in the form of one single payment or in the form of monthly payments for a fixed period of time. This help the family get back on their feet financially at least.

Term policy is a great protection plan for the family, if you’re still conflicted about why then here are some major benefits that will help you make the choice.

1. Simplicity: Term life insurance plans are straightforward. Unlike other insurance plans this type of insurance is simple and easy to understand even for the layman. This makes it easier for the policy holder to make proper, timely premium payments.
2. Flexible: Opting out of a term life policy is much easier than getting out of other policies. In term policies if you stop paying premium the risk cover ceases and the policy ends. Nothing is payable to you as there is no savings element in the policy.
3. Renewable: Many term life insurance policies are "renewable" and "convertible." Renewability ensures that you can go in for another term policy without a medical exam at the end of the first term policy. Convertibility allows you to convert your term life policy into an endowment policy for the same sum assured with associated increase in premium, should this make sense during the term of the policy.