invest in term insurance

5 Ways to Smartly Invest: Focusing on Term Insurance

Life Insurance

Your financial arsenal cannot be a one-trick pony. It needs to be the master of all trades. By that, we mean creating an arsenal with investments of varied risks based on your risk capacity. Why is that needed? You expose yourself to a bad financial future by making risky bets. You can get into financial trouble if your bets do not pay off. Make term insurance the anchor in your portfolio. An anchor that acts like the light-house, which stands tall and guides you to the fantastic financial future you need.

Let’s find out more about term insurance:  

What is it? Term insurance is a policy offering coverage for your life against a premium.

Who can avail? An Indian citizen with the age of 18 years and up to the age of 60 years. Anyone can avail it, from a young adult to a retiree, to spouses, to professionals, to widows.

Why? If you encounter an unfortunate incident, your family needs to have financial backing beyond your assets. The coverage amount rewards your beneficiaries and dependents with a sum that can be redeemed as a lump sum or periodically. It offers a chance to lead their lives without changing their lifestyle.

Read more: Best term insurance for house wives 

Here are five ways to smartly invest in term insurance:

  1. Invest Early: Like any investment, beginning early gives you a headstart. This head start allows you to save up on the premiums. The premiums can get expensive if you start late in life. The difference can be as high as ₹7,000, if not higher, at the age of 2 years. You can begin investing at 18. The premium for a sum assured of ₹1 Crore is as low as ₹15,000 pa.
  2. Choose the right sum assured: Analyze your income and expenses. Analyse the income and expenses that you have. The rule of thumb should be 10 to 15 times your annual income to arrive at the sum assured.
  3. Riders: Riders are add-ons to your term insurance. They are here for a specific reason that they solve. From disability to critical illness to accidental benefits, they come to a particular cost to make your policy rounded.
  4. Anchor against financial instability: Life’s unpredictable and moves fast. If you want to get a home loan or take on more debt, your term insurance can make the interest more lucrative and act as collateral if needed.
  5. Balance risk in your portfolio: The term insurance creates a stable return for your family if you pass away. This allows you to focus more on building wealth over the long term for your family.

Term insurance is one of many solutions to investing smartly. It is the solution you need and multiple options to make your portfolio sound and defined. Begin your investment journey by reading more about investments and how to make better decisions. Understand and take the trip to a financially independent life.