3 Reasons to Not Buy a Term Plan

Not everyone needs a term plan. You don’t need to invest in good term insurance just because everybody says it’s the right thing to do. Tax season may be in full swing, but that doesn’t mean you are one of those people who value their hard-earned money and who want to avoid paying extra tax. A term plan might be a wise decision for those wanting to protect their financial dreams and aspirations, but you’re among those who can achieve their dreams on their own, even with their low income and high financial liability situation.

So here we give you three reasons to not buy a term plan:

Because nothing will happen to you

Of course, you are invincible and can put a superhero to shame, right? When you’re confident that nothing unfortunate can ever occur in your life that requires monetary protection, why buy a term insurance plan? You’re one of those lucky individuals who get to go through life without anything tragic or unforeseen ever happen to them. So you definitely don’t need to spend money on a term plan, which actually provides valuable financial protection for your family when you’re gone.

Term plans also provide protection to you in the form of cash payouts via a critical illness rider, if you’re diagnosed with a major illness like organ failure, cancer or a heart attack. Even if you believe that cancer can never affect you, a critical illness can very quickly dry out your finances in an unprecedented way. Medical bills may mount up and you may be the sole breadwinner of the family, but since you’re invincible you have absolutely nothing to worry about, right?

You can afford higher insurance premiums

Since you’re already a superhero and can see yourself through any adversity, it goes without saying that having to pay a low premium for significant amount of coverage is not something that is likely to interest you. A term plan offers high coverage for a lower premium than most other insurance policies. In fact, the younger you are the lower your premiums are going to be. But clearly you’re someone who can afford to splurge on high insurance premiums and utilize a sizeable chunk of wealth you’ve accumulated for yourself.

You dislike tax saving

Yes, tax saving is a rather trivial affair, isn’t it? Though you may be aware that a term plan offers you robust tax benefits under Section 80C of the Indian Income Tax Act, 1961, you don’t want to avail of these benefits because you’re a model citizen who wishes to pay extra taxes on his/her salary. So yes, even if a term plan offers you the golden chance to secure your loved ones’ future by paying a nominal premium, you don’t want to take advantage of it because you’re immortal.

In all seriousness, however, term plans are a necessary component of your financial planning if you’re a mere mortal like the rest of us. Term plans are insurance products in the purest form and insurers like HDFC Life provide flexible and customizable products to keep your loved ones secure.

Term insurance for financial security and peace of mind

Gone are the days when a term plan was just another insurance cover. You can enhance your policy by opting for riders like the critical illness cover and permanent disability benefit—where 100 per cent of the rider sum assured is paid in the event of total and permanent disability as a result of an accident.

When it comes to taking care of your loan liabilities, opting for a decreasing term cover plan will ensure your loved ones have a strong financial backing even after you’re gone. It’s an affordable plan that’s designed to help your family repay the outstanding loan in case you unexpectedly die.The lump sum will be a decreasing percentage of the initial sum assured as the outstanding loan will decrease as per the loan schedule; the cover under the plan also decreases as per the policy schedule.

Safeguarding your loan liabilities and your family’s financial future is one of the best decisions you could make.