The Story of Ramesh
Ramesh, a 35-year-old IT professional from Bengaluru, lived a comfortable life with his wife and two children. He had a home loan, car loan, and was saving for his children’s future education. Life was going well—until one tragic evening when Ramesh met with a fatal accident.
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His wife, Priya, was suddenly left alone with two young kids, EMIs to pay, and no financial backup. Ramesh had always thought about getting a term insurance policy, but he kept delaying it, thinking it wasn’t urgent. The result? His family had to sell their house, move to a smaller apartment, and struggle to make ends meet.
Now, imagine an alternate reality: What if Ramesh had taken a ₹1 crore term insurance policy? Priya would have received a lump sum payout, clearing all debts and ensuring a comfortable future for her children.
This story is a wake-up call. If you are the primary breadwinner of your family, term insurance is not an option—it is a necessity.
What is Term Insurance and How Does it Work?
A term insurance policy is a pure protection plan that provides financial security to your family if something happens to you. Unlike traditional insurance policies that mix investment and insurance, a term plan focuses solely on providing life cover at an affordable premium.
Amit, 30, purchases a ₹1 crore term plan for 40 years by paying just ₹800 per month. If he passes away during the policy term, his family receives ₹1 crore tax-free.
Now, think about it—₹800 per month is the cost of a few restaurant meals or coffee outings, but it can ensure a lifetime of security for your loved ones.
Why Every Indian Needs Term Insurance
1. Financial Security for Your Family
If you are the main earner, your family depends on your income for daily expenses, education, rent/EMI payments, and future financial goals. A term insurance policy ensures that they can maintain their lifestyle and meet these expenses even if you’re not around.
Imagine you are a pilot earning ₹20 lakh per year. Your wife is a homemaker, and your kids are in school. One day, while on a trip, you suffer a fatal heart attack. Without term insurance, your family is left with no source of income. But if you had a ₹2 crore term plan, they would receive a lump sum amount that could replace your income for years.
2. Protection Against Loans and Liabilities
Many Indians take loans for home, car, or education. If you have outstanding loans, your term insurance ensures that your family is not burdened with EMIs after your passing.
Rahul, 40, had a ₹75 lakh home loan and a ₹10 lakh car loan. He passed away due to COVID-19 complications. Since he had a ₹1.5 crore term insurance, his wife used a part of the payout to clear all loans and saved the rest for their child’s future.
Lesson: If you have any debts, a term insurance policy ensures that your family doesn’t have to sell assets to repay them.
3. Long-Term Financial Goals Stay on Track
Your children’s higher education and wedding, your spouse’s retirement, and other life goals need money. Even if you are no longer around, your term insurance payout ensures these goals are achieved.
Vikas, 38, had a dream of sending his son to IIT. He was saving for coaching fees and future tuition. Unfortunately, he passed away due to a sudden accident. Luckily, his ₹1 crore term insurance helped his wife continue their son’s education plans without financial struggle.
4. Affordable Premiums for High Coverage
Unlike traditional insurance plans, term insurance provides high coverage at very low premiums.
- A 25-year-old non-smoker can buy a ₹1 crore cover for just ₹500 per month.
- A 40-year-old smoker will pay around ₹2,500 per month for the same cover.
Takeaway: Buying early locks in lower premiums, so don’t delay!
5. Tax Benefits Under Sections 80C & 10(10D)
A term insurance policy not only secures your family but also helps you save on taxes:
- Under Section 80C, you can claim deductions up to ₹1.5 lakh on premiums paid.
- Under Section 10(10D), the death benefit payout is 100% tax-free.
This makes term insurance a smart financial decision.
6. Riders for Additional Protection
You can customize your term insurance by adding riders for extra coverage.
Popular riders include:
✔️ Critical Illness Rider – Pays a lump sum if diagnosed with illnesses like cancer or heart attack.
✔️ Accidental Death Benefit – Gives an extra payout in case of accidental death.
✔️ Waiver of Premium – Future premiums are waived if you become disabled.
Example: Ajay, 35, had a Critical Illness Rider added to his term plan. At 45, he was diagnosed with cancer. His term plan paid him ₹20 lakh, which helped cover medical expenses.
How to Choose the Right Term Insurance?
Step 1: Decide the Right Coverage Amount
A simple formula:
Your term cover should be at least 10-15 times your annual income.
If you earn ₹10 lakh per year, you should have a term plan of ₹1-1.5 crore.
Step 2: Choose the Right Policy Tenure
The policy term should cover you until your retirement.
If you are 30 years old, take a term plan for 30-35 years (until 60-65 years old).
Step 3: Disclose Correct Information to Avoid Claim Rejection
Many people hide smoking, drinking, or health conditions while buying insurance. This can lead to claim rejection later. Always be truthful while filling out the policy form.
Rajesh, 42, was a smoker but did not disclose it while buying a policy. When he passed away due to lung disease, the insurance company rejected his family's claim.
Lesson: Always be honest when applying for term insurance.
Common Myths About Term Insurance
❌ Myth 1: "I don’t need term insurance because I’m young and healthy."
✔️ Truth: The earlier you buy, the cheaper the premium!
❌ Myth 2: "Term insurance is a waste of money if I survive the policy term."
✔️ Truth: The purpose of term insurance is protection, not returns. If you want investment + insurance, you can invest separately in mutual funds.
❌ Myth 3: "My employer provides life insurance, so I don’t need term insurance."
✔️ Truth: Company insurance is temporary—it ends when you switch jobs. Having a personal term plan is a must.
Conclusion: Secure Your Family’s Future Today!
Life is unpredictable, but your family’s financial security doesn’t have to be. Term insurance is a simple, affordable, and essential tool for every Indian.
If you haven’t bought term insurance yet, don’t delay. Secure your family’s future today!
What Next?
✅ Contact us to understand Term Insurance in detail - Connect Now 👉WhatsApp
✅ Buy a plan that suits your needs.
✅ Ensure your family knows about the policy details.
💬 Do you have any questions about term insurance? Drop them in the comments below!
Disclaimer: The names and examples used in this article are purely for illustration purposes. They do not represent any real individuals or specific cases. The details provided are for educational and informational purposes only and should not be considered financial advice. Readers are advised to consult with a certified financial advisor before making any investment or insurance-related decisions.
Disclaimer: The names and examples used in this article are purely for illustration purposes. They do not represent any real individuals or specific cases. The details provided are for educational and informational purposes only and should not be considered financial advice. Readers are advised to consult with a certified financial advisor before making any investment or insurance-related decisions.
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