Don’t Buy Term Insurance for These Immature Reasons – For Heaven’s Sake!

Life as we know it is uncertain. You never know when you would die, to be put bluntly. In the case of a death, what happens to the family or dependents of the deceased if they were the sole – earner of the family! Term insurance comes in here as a savior. It is a type of insurance that protects the family after the death of the insurance policy holder.

It is taken up for a particular time period, during which the death of the insured person benefits their family or their nominee in a monetary way by the cover of the insurance policy. If the insured dies during the tenure of the policy, the payout is made to the family or the nominees but if the tenure is over and the insured survives it, the payout is not made. The best term insurance plans offer maximum protection and payout to the family or the nominee of the deceased to ensure continuation of life through monetary support. There should be a solid purpose of buying a term insurance.

Purchasing a Term Insurance Policy

One should refrain from purchasing a term insurance policy for the following reasons:

• To pay off debts

If you buy a term insurance policy because of all the increasing expenses daily, think again! Sure, a term insurance policy will pay off all your debts, mortgages, etc. after your death to ensure that your family is free of all that hassle. But, buying a term plan just for that reason won’t work well. It is for the support of your family and not to pay off your debts. So, keep working on paying them off yourself and get a term insurance plan to protect your loved ones.

• My company has me covered for a lower premium

Of course, one would love their company to help them out to buy a term insurance and save some bucks. So, you would buy a term plan offered by your company which offers it at a lower premium. But it won’t work right as a lower premium will get you a lower coverage. After your death, you family will receive the cover but it might not be sufficient for them to sustain as well as they used to before. You do not have to get the plan just because it is at a lower premium, instead, buy a term insurance policy which will provide enough cover and be useful.

• They bought it, so will I

Stop, just wait! Just because someone you know bought a term plan, you don’t have to. Purchasing a term plan should be something that is based on your individual judgement and not on someone’s decision. Taking up someone’s financial decision might turn out to be a problem for you as you would not necessarily have the same requirements as they do. It is cool to take suggestions but the ultimate decision should be yours after you properly access what your requirements are and how much sum assured would you settle on. Choose according to your and your family’s needs and budget.

• To tick it off the list

Buying insurance policies for a better and secured future of your and family is a good thing. But purchasing a term insurance plan just to tick it off your list of things when you are well off is pretty immature. You should not buy a term insurance plan just because it is another thing to do, you should carefully asses your needs and check for the best policy that will fit your needs and will ensure the protection of your dependent family or nominees through monetary coverage.

• To get a tax deduction

Buying a term plan surely helps get a tax deduction but it should not be the sole reason to get one. Just to get a tax deduction, you shouldn’t blindly buy a term insurance policy. For the best benefits and the proper reason, you should carefully asses your requirements and see which policy and at what premium will your family or nominees be benefitted the best. To get a higher tax deduction, you might end up buying an expensive term insurance plan even if you didn’t need it. Buy the term insurance which is best suited for you and your family and not the one which will get you a higher tax deduction, which is considered an immature reason to get a plan.

Avoid purchasing a term plan because of such reason which might be only temporarily beneficial and may not work every time. Before buying a term insurance policy, the first step should be to see what you require and how much you require, only after that should you think about these other reasons which aren’t of that much important and maybe won’t work.