Personal Finance: If you have taken a home loan, take out term insurance, insurance cover should be ten times the annual income.
In term insurance you get high cost cover at low premium
The term insurance plan pays the nominee in full after the death of the policyholder
Most people take out a home loan to buy or build a home. But for a family with only one earner, a loan lasting 15 to 20 years is no less of a liability as, if that person dies accidentally, the tension of EMI repayment of the home loan increases. If you also bought a house with a loan, you must take life insurance (term insurance). It will save your family from becoming homeless even in your absence.
Need to be prepared for difficult times
You can get a cover of Rs 1 crore at an annual premium of just Rs 12,000. This premium, however, also depends on the age of the policyholder and his lifestyle. The discerning person is always ready for difficult times. Term insurance equal to or more than the loan amount can be helpful in your family's difficult times. In case of your death it will provide financial security to your family.
How much cover would be appropriate?
According to experts, term insurance cover should be at least 10 times your annual income. In addition, if you have a loan or debt, it should also be considered. In such a case if you have taken a home loan of Rs 50 lakh and your annual income is Rs 15 lakh, then you should have insurance cover 50+ (10x15) = 200 i.e. your insurance cover should be at least Rs 2 crore. If you have another loan or debt, insurance cover should also be considered.
Choose the right term plan keeping in mind the situation
Your age and duration should be taken into consideration when buying a term insurance plan. You can take out high insurance cover so that inflation does not affect your family's lifestyle. Remember, ignoring inflation can put your family in trouble. In addition to assessing Sum Assured, the source of income, current loans and liabilities, dependent family members, expenses incurred to maintain their current lifestyle and other financial goals such as children's higher education, their marriage, etc. should be taken into consideration.
What to do if you already have term insurance?
If you already have a term insurance, you can update it after taking out a loan. However, you can also take out home loan insurance if you wish. Under this, if the borrower dies, the remaining installments are credited through this insurance and your home remains safe.
Critical Illness Cover with Term Insurance
You should also take critical illness cover along with the term insurance plan. This allows you to get financial help in case of any serious illness. Because, if you get a serious illness, you have to pay the full amount. In this case, health insurance cover will help you.
What is Term Insurance?
Term insurance is a type of life insurance policy that provides coverage at a fixed payment rate for a limited period. This means that if the insured dies during the term of the policy, the amount of death benefit is paid to the nominee. It provides financial security to the family in case of uncertainty or death.
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