There are various ways in which you can build a solid financial portfolio, backed by goal-driven planning for the future. This is essential since you will have to secure your family’s financial future at any cost, along with staying on track toward fulfilling other objectives with strategic investments. Now, building a good financial planning blueprint is the need of the hour and that’s where you can strategically use term life insurance as well. It wonderfully complements other tools and investments for financial planning, helping you tick off several boxes toward achieving mental peace and freedom. Here’s how.
How Term Life Insurance Is Indispensable For Your Portfolio?
These are some ways in which term life insurance can actually be a great addition to your financial planning blueprint while complementing other financial planning tools.
- Term insurance offers high life cover for a longer duration. You can secure financial protection for your dependents till the retirement age or even beyond, depending on the policy you choose.
- The earlier you start, the better for you in terms of getting a lower premium rate, as younger applicants generally qualify for lower premiums due to lower health risks.
- The premiums you pay are eligible for tax deductions under Section 80C of the Income Tax Act, 1961, up to ₹1.5 lakh per annum.
- You can always enhance your plan with several value-added riders, such as accidental death benefits, waiver of premium, or critical illness coverage, subject to the insurer’s offerings.
- You will gain full mental peace, knowing that the insurance company will pay the sum assured to your family in case of your demise within the policy period, subject to policy terms and conditions. This ensures that they remain financially secure even if you are not around.
How Does It Complement Other Financial Planning Tools?
What’s a good financial planning blueprint? One that basically keeps your family financially secure, irrespective of whether you’re there or not, and of course, one that also takes care of rainy day needs and other future goals. Here’s how it comes together.
- You can get term life insurance as a future financial safety net for your family which will help them meet household costs, debt repayments, and other future goals in case something happens to you.
- Another necessity is health insurance, which offers financial coverage for medical treatments and so on.
- Aim to save at least 3-6 months’ worth of your net salary as emergency savings for sudden rainy day costs and unplanned expenditures.
- You can also start retirement accounts to save up for your sunset years. Along with NPS, try ULIPs and retirement plans offered by insurers.
- Instead of a dedicated child plan with life coverage, consider a high-coverage term insurance policy for yourself, which will ensure your child’s financial security in the long run.
- And if you’re risk-averse by nature, consider guaranteed income plans with fixed returns for meeting future goals. However, these are primarily savings instruments and should not be confused with term insurance.
Hence, you can build a comprehensive financial safety net for your family, which starts with purchasing term life insurance.
