Family can be your topmost priority, whether or not you are around for them. While you might put all your efforts to meet the financial requirement of your family, you might worry about their financial well-being in your absence. To secure your loved ones after your demise, you might purchase life insurance policies for them. A life insurance plan is a protection plan that can offer financial aid to your loved ones after your demise.
Today, many insurance companies have introduced different products for the financial security of your loved ones. Although there are various life insurance products like endowment plans, money-back policies, etc., term insurance policies and health plans would continue to remain the popular choices. Therefore, let’s understand the meaning of both these policies separately and in detail:
Term insurance is a protection plan, which works with the primary aim of family protection. A term plan can offer a death pay out to your family in your absence. As the nominees, your family can decide to receive the death benefit either every month or every year in a lump-sum amount. Since it aims to fulfil your family’s needs, you should opt for coverage based on the financial goals of your family. Additionally, you should calculate the premium on a term insurance calculator before purchasing a policy.
What is health insurance?
A health insurance plan is a medical plan, which can cover the medical treatments, hospital bills, and so forth during any medical emergency. Moreover, it can offer cashless treatments if you opt for one of the network hospitals covered under your health policy. Many health policies can also provide reimbursement for the incurred expenses during hospitalization.
As a policyholder, you can own both a term policy as well as a health plan simultaneously. However, there can be times when you might not be able to own both these policies together due to financial constraints. If you want to buy a term policy as well as a health plan, you should limit the coverage as per your financial needs to ensure the affordability of the two.
Since your needs can change at every stage, you should cover every life stage with an insurance policy. Therefore, let’s understand which insurance policy you should purchase after reaching specific milestones in your life, as mentioned below:
- When you have dependants at a young age
Ideally, young adults with financial dependants should purchase both: term insurance and health plan. Having term plan as well as health insurance at a young age can help you to shield yourself and your dependants from the eventualities of life. Although you might not feel the need to own an insurance policy early, you should purchase it to prepare yourself financially during an unfortunate event. Moreover, both these policies can help you to reduce your tax liability at a young age.
- When you want to raise a family
Whether you want to get married or have children, purchasing an insurance plan at this stage is of utmost importance. If you are covered under an employee mediclaim policy, you should buy an additional health plan for you and your family. However, compare different health plans to understand the benefits and features of every policy before you make the final selection.
Since your spouse and children can depend on you financially, you should increase the term coverage. Many insurance companies might allow you to increase your term coverage after you cross specific milestones. Moreover, your insurer might let you to cover your spouse as well as provide for your child’s education.
- When you plan for retirement
As you grow older, you can get a step closer to reaching your retirement stage. Apart from nearing the retirement age, you might also be prone to severe health conditions as you grow older. The chances of suffering from severe health concerns like cardiovascular diseases, kidney failure, and so on can be higher. Therefore, you should own a health plan to cover your health conditions without creating a hole in your pocket when your professional income stops after retirement.
To conclude, paying for both term insurance and health policy can become easier when you opt for only the required coverage based on your life stage. Although young adults might not need both the policies, you should purchase it while you are young to pay low premiums. The younger you are, the lesser are your premiums. That way, you wouldn’t have to worry about spending too much while expecting more.