How Buying an Additional Term Plan Can Increase Your Coverage?November 23, 2021
It is important to maximise life cover in order to get financial protection. By purchasing an additional term insurance plan, a person can make his/her family more secure.
In this article, we will explain the benefits of purchasing an additional term plan.
People purchase term plans in order to ensure financial security for their family. A term plan can provide a sum assured if the policyholder passes away during the tenure of the policy.
The sum assured can help the family members meet their life goals and pay for regular expenses. Hence, many people purchase a term insurance policy in order to ensure there is no financial burden on their family members.
Here are some of the reasons why everyone should consider purchasing term insurance-
- It Can Provide Financial Security
In case a person dies untimely, then his/her family might have to face a huge financial burden. However, if this person has a term insurance policy, then the insurer can provide a sum assured to his/her dependants. This sum assured can financially secure them.
- It Can Help Meet Life Goals
As a term insurance plan can provide a sum assured to the beneficiaries of the policy, the funds received can be used to meet various expenses. The family can use the funds to achieve life goals.
- It Can Help Save Taxes
Apart from providing life cover, term insurance can also provide tax benefits to the policyholders. The taxpayer can claim tax benefit under Section 80C up to Rs. 1.5 Lakh on the premiums paid to purchase the policy.
Why Everyone Should Purchase Additional Term Plan
While single term insurance is beneficial, it is recommended to maximise the life cover amount to ensure financial security. Thus, it is wise to purchase an additional term plan for increasing coverage.
When choosing the life cover amount, an individual should consider various factors like his/her income, expenses, assets, liabilities, etc. However, these factors might change as a person gets older.
Often, people purchase a term insurance plan when they have no responsibilities. However, it is important to reassess insurance requirements as responsibilities increase after marriage, children, etc. In such situations, an additional term plan can be beneficial. However, policyholders should ensure that they inform the second insurance company about the first term plan.
Here are some of the benefits of buying an additional term plan-
- Multiple term plans can enhance financial security. As a person gets older, his/her responsibilities can increase. Therefore, to ensure his/her family gets the maximum financial security, it is important to purchase an additional term plan.
- There are situations when an insurer can reject a claim. In such a case, the policyholder’s family might suffer financial difficulties. However, purchasing another term plan can reduce this risk. If one insurer rejects the claim, then also the policyholder’s beneficiaries will have another term plan to rely on.
Purchasing a term plan is crucial for financially securing your family. But with an additional term plan, you can increase your coverage and enhance financial protection.