What is an Ideal Budget for Buying Term Insurance?

There is no arguing the fact that life insurance acts as a backbone during uncertain times. Life can stun you with surprises at every turn and there is not much that you can possibly do to have a control on future events. However, there is one department which you can control with proper planning and that is finance

A term life insurance policy, or simply a term policy, can assist you in securing the financial future of your loved ones. In case of untimely demise of the earning member of the family, his/her family members could be left dependent on others. Inflation, increase in living costs, debts, expenses incurred on children, medicines, and retirement planning are some of the financial obligations that you need to fulfill. A term policy can take care of all these obligations in your absence.

The simple principle behind opting for a term plan is that it offers a large sum as death benefits at low premiums. However, you should also consider the importance of budgeting while buying term insurance. A best term insurance policy is the one which should be able to provide a comprehensive financial security to your loved ones in case of your untimely demise.

What should be the ideal budget for buying term insurance?

Till the time a term policy provides adequate coverage for all future needs of the policyholder's family, it's sufficient. It should be able to address all financial obligations that will be adversely impacted by the death of the policyholder, including education expenses of his/her children, medical expenses, retirement funds for his/her parents etc.

Typically, term plans are highly beneficial for people with low financial reserves, such as people who have just started working. And if you fall in such a category, you must consider term insurance costs before buying it. Make sure that you're buying only what you need. The coverage offered by the policy should neither be less nor more than your requirement.

Is it beneficial to go for term plans with maturity benefits which require higher premium?

Nowadays, many insurers have started offering term plans which provide maturity benefits to the policyholder in case he/she outlives the policy term. However, to avail these term plans, you may have to pay a bit higher premium as compared to term plan with death benefits only. These plans can be of great help if you don't want to lose your premiums in case you survive till the end of the policy period.

Aditya Birla Sun Life Insurance (ABSLI) offers one of the affordable term insurance plan – ABSLI Life Shield Plan. This plan allows you the flexibility to choose from a combination of different options as per your protection needs and preferences.

ABSLI Life Shield Plan offers the plan option wherein you can get return of your premiums paid on maturity date if the life insured outlives the policy term. Moreover, you can also opt for waiver of premium benefit in case of disease or disability.

Should the cost of insurance be considered?

When it comes to protecting our loved ones, is the cost of doing so really an important factor to consider? Practically speaking, term insurance cost should not be the main factor, considering that safety, security, and dreams of your family are more important. Would you really consider a term policy that is cheaper or the one that provides adequate coverage? You decide.