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Should you opt for term insurance plans and packages?

Term insurance is quite the buzzword in financial and investment circles these days. More and more people are steadily opting for these plans and this has not really surprised investment experts and professionals. According to market experts, the boom in term plans is mainly due to the lowering of average premium rates and the advent of online platforms for customers to select, compare and finalize plans minus any hassles. Additionally most insurers are advertising these plans in a big way, thereby leading to enhanced popularity of the same due to sparked customer interest and attention. Most insurance companies have successfully managed to rake up at least five figure sales numbers when it comes to term packages.

According to multiple financial advisors and planners, term insurance is actually the best bet for almost every individual, contrary to earlier misconceptions relating to the same. This is mainly because of the exceedingly high coverage amounts provided to customers at premiums that are miniscule or surprisingly low in comparison. The premium amounts are sometimes only 1/4th of the amount you would otherwise have to fork out for ULIPs or endowment plans offering you similar coverage. This is possible for the absence of any investment aspect in term plans. The premium amount is allocated wholly for risk coverage. There are several aspects that you need to take into account before opting for a term plan.

Deciding on your term insurance coverage is really essential. Always calculate the amount that seems suitable in terms of taking care of basic family expenditure, liabilities, education and weddings of children and other expenses. Insufficient coverage will negate the very purpose or utility behind taking a term plan. You should also chalk out a proper duration for the term plan. Ideally, this should run till the time you wish to continue working. Life cover should ideally be taken till the age of 65 years. Short term coverage will not be fruitful especially if it concludes in one’s 40s or 50s. This is one mistake that is best avoided if you really want proper security for the years when you are most likely to be at risk.