You’ve probably heard the story of Cinderella several times. In that tale, a fairy godmother magically transforms a pumpkin into a carriage, mice into footmen, and a gown made of gold and silver with glass slippers for Cinderella so that she can attend her dream ball. The only condition was that Cinderella must return home before midnight. Because that’s until when the magic would last, and then everything would go back to its previous form.
You dedicate your life to your children and often create a fairy tale. You give them toys to engage them, books to spark their imagination and send them to good schools to educate them well. However, unfortunately, you do not know when the clock will suddenly strike midnight.
But with Term Insurance you can be prepared if it does.
Term Insurance will protect your family’s future at a very reasonable cost.
It only pays money to your family, after your death. It has no maturity value after a certain number of years.
7 Bad Reasons For Not Buying Term Insurance:
1. My wife will take care of the child
Yes, she will. But, can she take care of a child, a home, and a job, by herself? Should she have to? If your wife is a full-time homemaker, she will have to find a job without much time to prepare herself. Even if you have other relatives who can step in, an uncle or aunt often cannot completely make up for a parent’s loss in either emotional or financial terms. They also may not have the means to do so, which means no financial security for your family in your absence. Are you willing to take that chance?
2. I have already made investments for my kid
As you might already know, raising a child costs a fair amount of money. You may have already spent a good amount of money by the time your baby turns two. Your child will need funding for his/her upkeep, schooling, (foreign) university and all the ancillary expenses that crop up along the way including medicines and vacations. Who will make investments in your absence to meet these expenses? Unless you’ve set aside a small fortune for your child, you will need Term Life Insurance.
3. I already have a Life Insurance policy
People may get confused between Endowment Plan and Term Plan. The Endowment plan combines insurance and investment. They pay out either on death or after a certain number of years. However, Endowment plans generally offer lesser life insurance cover than insurance cover offered by term insurance. For example, a ₹ 60,000/- annual premium will get you a ₹ 6 lakh cover in an endowment policy. On the other hand, you can get a ₹ 60 lakh cover in a term insurance policy at a much lesser premium.
4. My company provides a term plan
Once again, unless your company is very generous, this will not be enough. Also, in today’s world, people change jobs quite frequently. A company-provided term plan is not likely to extend beyond your employment with the company. What if you decide to take a break, start your own business or leave your job to follow your passion? Should you be left without cover? Should your wife and kids be left without any financial protection?
5. I have EMIs to pay; I will buy a term plan later
This line of thinking ignores the fact that there may be nobody left to pay the EMIs if you die. Your hard work and monthly sacrifice will go down the drain, and your family may be deprived of a home. Think again. If your finances are stretched, go for a smaller life cover!a. Ten times your income is the thumb rule but even five times will help to some extent.
6. I have little money to spare, after taxes
Your life insurance premium will get you a deduction from taxable income^ up to ₹ 1.5 lakh per annum under Section 80C. This will let you pay lower taxes and protect your family. If you have used up your annual 80C deduction, pay your premiums monthly - this will allow you to get the tax^ deduction on all of your premiums in the next financial year.
7. I’m young, death is a remote possibility
This is generally true, but the more important question is – do you want to take this chance? Your body is healthier when you are young but the chances of meeting with an accident or contracting an infectious disease or dying from a hundred other causes are the same, regardless of age. What happens to your kids then? Do you want to take this chance? But you may think – What if I outlive the term insurance policy, the money is wasted. Think again, living longer is a good thing. Isn’t it?
When should you buy term insurance?
The sooner, the better. The earlier you purchase the policy, the lower is your premium amount. Also, do you want to wait when your family has already grown and is without protection?
Our Tax Saving Plans |
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ICICI Pru iProtect Smart - Term Plan Save tax up to ₹ 54,600/-1 under Section 80C |
ICICI Pru Heart/Cancer Protect – Health Plan Save tax up to ₹ 7,800/-2 under Section 80D^ |
ICICI Pru1 Wealth - Wealth Plan Save tax up to ₹ 46,800/-3 under Section 80C |
ICICI Pru LifeTime Classic - Wealth Plan Save tax up to ₹ 46,800/-3 under Section 80C |
SmartKid with ICICI Pru Smart Life - Child Plan Save tax up to ₹ 46,800/-3 under Section 80C |