Term insurance for parents is the best way to secure your family financially

As parents, one of the biggest worries people have is how to save enough for their children so that they don’t suffer if anything unfortunate happens to their parents. Term insurance for parents is the best savings tool for anyone who wants to ensure that their dependents can be financial secure even after their death.

Term life insurance is a very simple form of insurance. In this policy the policy holder needs to pay a low premium through its term. If the policyholder survives the term of the insurance, neither he/she nor their nominee will receive any payment. But if the policyholder passes away during the term of the policy, his or her nominee will receive a substantial lump sum payment from the insurer.

Term policy is preferred by main because of its simplicity and inexpensive premiums. It is a good way to ensure that your children or any other dependents are taken care of financially in your absence. There are many other advantages of taking term life insurance. Here are some of them.

1.  Simplicity: Term life insurance plans are straightforward. Unlike other insurance plans this type of insurance is simple and easy to understand even for the layman. This makes it easier for the policy holder to make proper, timely premium payments.

2.  Flexible: Opting out of a term life policy is much easier than getting out of other policies. In term policies if you stop paying premium the risk cover ceases and the policy ends. Nothing is payable to you as there is no savings element in the policy.  

3.  Renewable: Many term life insurance policies are "renewable" and "convertible." Renewability ensures that you can go in for another term policy without a medical exam at the end of the first term policy. Convertibility allows you to convert your term life policy into an endowment policy for the same sum assured with associated increase in premium, should this make sense during the term of the policy.

4.  Substantial pay-out: Depending on your policy you can ensure that you can provide for the various financial needs of your family through your term insurance. Term plans for parents are designed in such a way that they can provide for their child’s higher education, business venture, weddings or any other requirement even in their absence.

5.  Cheapest form of life insurance: You will not have to pay a huge premium overtime to ensure that your family is financial secure even after your death. Term life insurance comes at an affordable premium, which means that everyone can buy it.

Difference between Life Insurance and Health Insurance

The first thing that one must do once they start earning is to buy insurance. For a secure future and to safeguard your finances one must create an insurance package. This package needs to have all the insurance policies that one can need. The four basic types of policies that your insurance package must contain are a life insurance policy, a health insurance policy, a critical illness policy and a personal accident insurance policy.

People are often confused between whether they should opt for a life insurance policy or a health insurance plan. The answer is that you need both. Both, a life insurance policy and a health insurance plan have unique functions and one simply can’t be replaced with the other.

Here’s how one is different from the other and why you need both.

What is a life insurance policy?

The need and importance of life insurance for everyone is undeniable. A good life insurance plan is an investment as well as a security. Here’s how a life insurance policy works, you pay a set premium for the duration of your policy. On maturity you receive a lump sum amount, which is the money you’ve paid as premium in case of term plans you, don’t receive a pay out on maturity. Term policies come at a low premium but in case of the death of the policyholder the nominee receives a sizable amount in the form of a claim. Your life insurance plan needs to be tailored to the needs of your family. While buying a plan one needs to take into consideration the current income, loans if any, the expenses etc. of a family. There are a few different types of life insurance plans you can choose from, they are term insurance, whole life insurance, ULIPs and child life insurance plans, to name just a few.

What is a health insurance plan?

A good health insurance plan is the need of the hour for every family. Healthcare rates all over the country are soaring. Even simple procedures, tests and diagnostics can make quite a dent in your monthly budgets. Health insurance policies make sure that you don’t have to worry about finances when you or a loved one is in need of health care. Choosing the proper health insurance plan for your family is crucial. Health insurance plans take care of your medical expenses. To maximize the benefit of a health insurance plan one can purchase riders, which are like add-ons. There is a critical illness insurance that takes care of your medical expenses in case you contract a serious illness like cancer, heart disease or organ failure. Other riders include accidental death rider and permanent disability rider.