Why you should pick term insurance

I fail at two things when people talk with me. One, I find it very difficult to convince people not to play with direct stocks and Futures & Options as a beginner. They are very much attracted to make quick bucks without even knowing how it works and what are the things to learn before stepping in. Secondly, I find it even more difficult to convince the same or different set of audience to take term insurance plan which will protect their family. They don’t try to listen or atleast give a second thought as soon as they realize that are not getting any returns when they are paying premiums. It is not a product boss to get returns, it is a protection. Stay with me till the end even if you are not interested in taking any term insurance.

Ironically, many people are taking money back or endowment plans which hardly gives any protection to your family and returns are also not attractive if you consider in investment point of view. Let’s put it aside for a while and check how term insurance will benefit you.

Who will deny a steady income coming into your pocket regularly every month ? Everyone loves it right. One can manage thier investments & generate regular dividends through investment and other schemes. What if I say your family can earn regular steady income every month even in your absence ? Yes, you heard it right.

Let us assume, I am living a happy life with my wife and childrent in mid 30’s or 40’s. Everything is going perfect as per plan until that one accident which kept my family fate in jeopardy. Suddenly, active income of that sole earner becomes zero.

How can they arrange money for a living?

How can they pay for rents & EMI’s?

How to cover medical expenses?

Believe it or not, everything in this world is linked with money and we don’t have any certainity of our future. Anything might happen in this century. So, it is very essential to prepare for the dooms day scenario and manage finances very carefully.

Assuming the same situation but in contrast I have taken term insurance policy, dreams of family would not have been shattered. My family could have lead a happy life with my one single decision. There will be only emotional loss & turmoil. Finances would have been managed wonderfully with my life protection cover.

I have seen many families who are struggling a lot once they lost bread earner of family in an unfortunate situation. Thier dimension of lives will be completely impacted if their dependency is only on active income.

Family will get 1 Crore or 2 Crore depending on the term insurance policy cover he or she opted. Rather than choosing the complete lumpsum payout option, one can also choose regular payout option in which insurance companies will pay certain amount every month.

No investment will give you 1 Crore in return if something happens to you. You will be hardly paying paying 15-20k per year depending on your age. If you start early, you can avail lesser premiums.

Many people ask me I am not getting any returns if I pay for term policy and if no bad day was there in my diary. Let me put it in this way, why are you paying car or vehicle insurance ? Insurance company will not return you any money if you don’t make any claim right but if something happens insurance company will cover it for you.

If you are filthy rich and even in future, your family does not depend on your income, then kudos !! It can be optional for you whether to take term insurance or not.