When you take a large loan like a home loan or car loan, it is smart to increase life insurance coverage by buying a term plan. Here's why you need to get a term plan after a large loan
Hello and welcome to Fundoomoney, your 24X7 buddy for all your money matters! People take loans to finance big ticket purchases be it cars or homes. But large loan obligations make families financially vulnerable in the event of the demise of the person whose income covers the family’s expenses. This is the reason why you need to buy fresh life insurance plan like a low cost, high coverage, term plan after taking a large loan. Here, we will tell you the compelling reasons why you need to do this. So, stay tuned.
Family may be compelled to part with the asset In your absence and with the loss of regular income, your family would find it difficult to maintain the asset like a home or a car and also service the EMI. In extreme cases, they might have to part with something that you bought for them, with great love. A low cost, high life cover, term plan may be perfect to address your requirement. Impact on future needs Even if your family has the money, servicing the loan will divert the money from important future needs like child’s higher education. A fresh life insurance plan like a term plan covering the outstanding loan amount prevents such a situation.
Why a term plan helps After taking a large loan, buying a term plan helps secure your family adequately at the lowest cost. For instance, you can cover a home loan of Rs 50 lakh with a monthly premium of Rs 600- 900, depending on your age and health factors.
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