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Avoid These 4 Consequences of Not Having Term Insurance
10 October 2018 IST
Avoid These 4 Consequences of Not Having Term Insurance

In India, most of us believe that term insurance is an investment contract that mainly benefits the insurance companies because you don’t get anything on surviving the policy duration. As a result, the percentage of working individuals in India who purchase term insurance is remarkably low, as compared to the other nations in the world.


Reality is thatterm insurance policies in India are not only inexpensive and uncomplicated but also offer more benefits to the policyholder than most other forms of life insurance.  Given the fact that term life insurance is low-cost, it is aptly suited for young individuals and couples who don't save up a lot of extra cash each month. Even if you are in your 40s or 50s, you can purchase term life insurance; however, you would have to pay slightly more premium than say, a 25-year old.  
Which brings us to the question at hand: what could happen if you don’t buy term insurance while you are earning? First, the size of premium that you pay depends upon your age, sex, health status, duration of policy coverage and the amount of death benefits. Therefore, term insurance becomes increasingly expensive to purchase and renew as you get older. Also, there are other severe consequences of not having term insurance, some of which are explained below.  
1. Leaving Your Loved Ones in a Financial Crisis
You might think that buying term insurance is a waste of your money but considers this: if some were to happen to you, your family would have no one to look up to for financial support. While your sudden demise would be devastating, the financial crisis would only make matters worse. 
Studies show that road accidents alone are responsible for approximately 400 lives being lost every single day. Further, there are various natural and human-made causes, which might hinder your ability to support your family. 
To safeguard your loved ones; therefore, buying a term plan would be your best bet as it will help you provide a comprehensive life cover to your family at meagre premium rates. 
2. Leaving Your Family Burdened with Debt
In India, it is common for us to take financial loans from the banks and fulfil our desires. Whether we are buying a house, purchasing a new car or financing our child’s higher education, the bank approved loanseasily help us raise the required amount. 
However, if something were to happen to you, it is your family who would be repeatedly harassed by the recovery agents for the outstanding debts. You need to make necessary arrangements that no one would hassle your family for any indebtedness after your demise. And term insurance is precisely the instrument that can help your family in repaying their debts
These days, many insurers such as Future Generali offer benefits such as a lump sum payment of the Sum Assured under the term plan after the death of the policyholder. So that your family can repay any outstanding debts with the term plan amount while using the remaining amount to fulfil their immediate needs. 
3. Leaving Your Child’s Future Insecure
As parents, it is our dream to provide our children with the best possible intermediate and higher education, so that they can have a bright future ahead. In recent years; however, the cost of education has undergone revolutionary changes.  While globalisation has much improved the quality of education here, it has also resulted in raising the cost of higher education to unprecedented heights.
These days, the tuition fees of schools have become far too expensive to bear, especially for salaried parents.  At this point, you would have to think about whether have you done enough to secure your child’s future?  What if your spouse becomes incapable of funding their education after your sudden demise? 


The answer to these questions is quite straightforward: term insurance plans. With the option to choose either a lump sum payment or monthly payments of the Sum Assured, you can do a lot in your lifetime to ensure that every financial need of your child, big or small, doesn’t go unfulfilled.  
4. Not Being Able to Save Taxes
You work hard every day; however, the salary you earn doesn’t come to you in its entirety. Instead, a significant amount of your annual pay is deducted in the form of income tax. Thankfully, the Indian government offers every salaried and self-employed individual, a chance to earn tax deductions through tax saving investments such as life insurance plans.  
Buying term insurance would get you a tax deduction of up to Rs. 1,50,000 for the premium paid under the Section 80C of the Income Tax Act 1961. Even the Sum Assured, which your beneficiary receives after your demise within the policy period, is non-taxable under Section 10 (10D) of the Income Tax Act, 1961. 
There are a variety of term insurance plans available in India. Be it pure term plan or a plan which repays you the entire premium paid as maturity benefit; you can choose the best term insurance plan based on your own financial goals and requirements. However, not buying a term plan during your lifetime would be a decision that would eventually threaten the financial security of your loved ones. With a term plan, you can quickly put aside a nominal amount of money that would go into providing life cover to yourself and your family, thus safeguarding them against any misfortunes in life.


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Shibu Chandran
2 hours ago

Serving political interests in another person's illness is the lowest form of human value. A 70+ y old lady has cancer.

November 28, 2016 05:00 IST
Shibu Chandran
2 hours ago

Serving political interests in another person's illness is the lowest form of human value. A 70+ y old lady has cancer.

November 28, 2016 05:00 IST
Shibu Chandran
2 hours ago

Serving political interests in another person's illness is the lowest form of human value. A 70+ y old lady has cancer.

November 28, 2016 05:00 IST
Shibu Chandran
2 hours ago

Serving political interests in another person's illness is the lowest form of human value. A 70+ y old lady has cancer.

November 28, 2016 05:00 IST

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