Good news – Any time starting from today is the right time. So, basically the earlier the better! If you will ask any expert advice then they will suggest to buy the insurance plan as early as possible. But also upon digging further, studies have shown that April can be the month to buy an insurance policy which is best suited for you.
Before diving deep into the contemplation of what time of the year is a good time to buy a term life insurance, one big question which may come to our mind is what is ‘Term Life Insurance’? So, it is the form of a plan where you pay premium and get cover for the specified term. If the policyholder or insured dies within that tenure of the plan then nominees will get the sum insured also known as death benefits.Term insurance is one of the most cost effective ways to purchase financial protection.
The correct answer is Now! But March, April makes two remaining top 3 slots.
Any personal wealth advisor will tell you that there is no worst time to purchase any insurance policy, as the more you live without proper insurance cover, more you are exposing yourself to financial risk. Term life plans may seem tricky in the sense that users have difficulty understanding their terms and conditions. Also, many do not have time to buy a proper life insurance policy which serves their all the needs. But coming to our next big question about the right month to buy term life insurance – ‘April’ could be the life savior for many of us.
“While every month is a good month, beginning of the financial year is a good time to reassess your financial plans. April is also the month when most salaried employees receive their annual bonus. If they already have term insurance then they should reassess the adequacy of the sum assured,” quotes Sandeep Batra, Executive Director, ICICI Prudential Life Insurance.
What needs to be changed
As far as the traditional methods of investment goes in India, then most of the people will go for it at the end of a financial year. The reason behind the same is that people invest in life insurance to get tax benefits attached to different life insurance plans. Having said that, one should also not forget to iterate that financial protection needs to be looked at differently. It should not be viewed only with an investment lens or for the purpose of tax savings. It serves as a replacement of income in the absence of the earning member. Term insurance needs to be the first step in financial planning. Protect before you save.
During April, most of the companies give annual bonuses and appraisal in the salary of the employees. Because of this a salaried person can think of the investment in a clear state of mind. With the help of additional funds in hands, people can easily consider an effective form of term insurance and can provide security of utmost level to their families. Also, if you invest in the month of April, then the insurance company will be able to offer a wider coverage and you can also get discounts with additional benefits.
Things to keep in mind while buying a term plan
Term insurance is the first product that one needs to buy while creating a financial portfolio. Actuaries suggests few points to keep in mind while buying term insurance:
- One needs to ensure that the life cover is adequate to take care of the family and then focus on building a savings pool.
- Ensure that the quantum of protection (the sum assured for the term plan) is commensurate with the financial support the family will need in the absence of the policyholder.
- select a life insurer with a consistently high claims settlement ratio to ensure that the family receives the policy proceeds in a hassle-free manner.
In simple words, as a thumb rule, you should always go for a sum assured of 10 times of your current annual income. However, don’t forget to keep the inflation rate in mind which is growing rapidly. The life cover should continue until retirement or till adequate corpus is built to take care of dependents. If you want to know the exact sum assured amount of a term plan, then you should take help of an online life insurance calculator.
One such calculator is available on our website https://www.truecover.net/