4 Reasons To Have A Term Life Insurance Plan Before You Start Investing

  Author: Naveen Kumar

It is common knowledge that one needs to invest regularly to meet major future needs such as children’s higher education and your retirement. However, in the hurry to get going for those financial goals, many of us may forget to buy a life insurance policy or have enough life insurance coverage. This is hardly a wise thing to do. In any family, in the unfortunate eventuality of the death of an earning member, there is likely to be a huge financial setback. It can even wipe off most of the investments.

A term life insurance plan or term plan is a low cost way to ensure that your family stays protected with adequate life insurance even in the event of the demise of the earning member. Here are four compelling reasons why you must have a term plan before you start investing. Take a very good look.

It protects your family till you save enough Till you save enough your family remains financially vulnerable in the event of your untimely absence. Your family might find it difficult to meet regular expenses and important future needs like child’s higher education. Term plan provides the adequate financial protection your family needs.

Prevents premature exit from investments In your absence and without adequate life insurance, your family will have to fall back on your savings. Many of the premature exits from investments would be at a loss. This could jeopardise many future needs like your child’s higher education. On the other hand, these investments are protected when your family is secure with a term plan.

Ensures family security along with growth investments With the knowledge that your family is secure, you can invest with less apprehension in investments that have higher risks but provide higher long-term returns. Investments in equities, either directly or through mutual funds or life insurance products like unit linked insurance plans (Ulips) are typical examples.

Low cost premiums leave you with more investible money

Term plans are the lowest cost life insurance plans that provide the highest coverage. This means you have much more left at your disposal to invest after ensuring adequate protection for your family. If invested in investments with high return potential in the long-term, be it equity mutual funds or Ulips, you can end up with lot more savings.

For all us, financial security of our family is of the highest importance. Buying a term life insurance plans ensures that your near and dear ones are protected even in your absence and you can have a solid investment plan in place to meet your future goals.

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