In a move to protect your family, as much as your investment portfolios, it’s also important to review your insurance portfolio on a regular basis. According to experts, you must boost your term insurance plan regularly. As per your family’s improving lifestyle and financial needs, you need to increase your coverage accordingly. Also, in the event of your death within your policy term, your family will receive the full sum assured irrespective of the number of pending premiums. An important feature of a term plan is that it offers a big sum assured.
“As and when life situation changes be it earning and spending more, or getting married, having kids, taking loans, buying assets or looking at retirement: each of these stages warrants looking at your insurance and checking if it's still adequate or do you need to increase it. A review every five years is necessary even if none of these changes happen,” says Shweta Jain, founder of Investography.
So should you boost your term insurance cover regularly?
Considering inflation and rising living standards, buying a term insurance plan that takes care of it is advisable. Since term insurance is pure risk cover, it is generally cheaper than other life insurance products. “One should buy a term plan with a higher sum insured at a young age, as it is cheaper at a younger age. If one cannot afford a higher sum insured, one should then go for a plan that allows one to increase the sum insured during the policy's tenure. As your income grows you cannot afford to pay for it. When one gets married, the spouse (wife) should also opt for it, if not taken already, so that you have double protection,” says Rrajesh Sharrma, CEO & Principal Officer, Anand Rathi Insurance Brokers.
“The only flipside is that the higher sum insured comes at a higher price, but it is worth paying that higher price as it will still be cheaper than other insurance plans. There are many riders available for the term plan, one must understand these riders and accordingly can choose the riders, that they find meaningful,” adds Sharrma.
Uncertainties don’t knock at the door, they are sudden and rather disruptive- emotionally and financially! As per LXME’s Women and Money Power Report 2022, 58 per cent of women have no health or term insurance in their name. “Term insurance, not only protects your family and loved ones but adds more financial security. It allows one to leave an inheritance while ensuring that any outstanding debts and expenses are paid off in case of the death of the insured. One should buy term insurance at an early age that will enable you to get high coverage at lower premiums. Boosting the term Insurance cover depends on the individual’s financial goals, dependants needs, income, and debt levels, and the kind of financial protection they need for their loved ones,” says Priti Rathi Gupta, Founder of LXME.
Hence, boosting your term insurance can lead to increased financial security for your loved ones and ensure that they have adequate funds to fulfill their expenses. It provides an ability to adjust as per different life stages that an individual goes through and requires a boost in the insurance requirements too. For example, getting married, having a child, supporting parents in their old age, taking a loan, etc.
However, boosting your term insurance will lead to higher premiums, which means more money going out of your pocket. Regular boosting could lead to over-insurance. Lastly, it’s important to assess one’s needs, and financial situation, and then take a call on boosting your term Insurance plan.
