Have a Car Insurance? Why Not Term Insurance Policy As Well?

2024-08-02

877 Views

Locate branch

Resume journey

Pay Premium

Love your car? Of course, you know how bad it feels when the car gets a dent. It’s even more painful when it happens not because of something you did, but due to someone else.

You know the road has bested even the most disciplined and skilful drivers many times. Despite all the caution and skill, not everything would be in your control when you are travelling. So, you buy term insurance to avoid losing your financial status along with your car in accidents.

With adequate car insurance, you can be sure to continue your life even if you lose the vehicle due to misfortune. Ever thought that ‘you’ might be the ‘vehicle’ driving your family and children towards their goals in life?

Life vs The Road

You’d be amazed to know how many values and traits our lives share with the road. You could be on a six-lane highway, an interior road without partition, or the street near your house. You will always have twists, turns, ups, downs, breakers, red-lights and depending on the city, even unexpected potholes.

Both living and driving are often about navigating whatever comes with caution, and awareness. At times, accidents may still happen, and most of the times it’s difficult to ascertain the fault. But, regardless of who was at fault, you do need to get back on your feet as soon as possible and continue the journey.

If it’s about the car, your car insurance will help you get back in your car and on the road quickly. But, when it’s about life, you need something different ~ term life insurance.

Term Life Insurance as Backup for Your Family

Now the term life insurance plan is a very efficient way to safeguard your family’s financial health. Just like car insurance, which protects the car owner from financial jolts, term insurance too protects your family.

With term insurance plans you can expect to protect your family from:

Your sudden demise
A temporary or permanent disability
Life-threatening illnesses

As you can very well imagine, these situations affect your earning capacity. Without a financial backup to cushion the impact all the three situations harm your dependent’s financial future.

How Does Term Life Insurance Work?

Life insurance, though, has a lot of similarities which you can break down the whole process of securing a term life cover and how it protects your family in the steps below:

Step 1: Select the term insurance benefit

Find out the amount of money your family will need to achieve

Their financial goals &
Maintain their lifestyles

Then you consider the maximum financial value you have based on your income and age. For example: if you are 30 years of age and your annual take-home income is Rs. 12 lakh your financial life value will range between Rs. 1.2 crores to Rs. 2 crores; i.e. 10 to 15 times of your income.

You can use an online term insurance calculator for this.

If the amount your family needs are higher than your financial value, you may consider increasing the cover in the future.

Step 2: Add more benefits

Once you have decided your benefit amount for the term insurance cover, you can add other benefits:

Personal accident covers: Insurance for accidental death and disabilities
Critical illness covers: Insurance for life-threatening diseases such as cancer, heart failure, and organ transplant needs

Step 3: Select the pay-out mode or modes

Select the mode of benefit pay-out at the time of claim. At this step you can select whether your family should:

Receive a large sum in a single payment or
A percentage of the benefit as a regular income

Ideally, you should divide the total benefit amount into both. So that your family may receive a lump sum as well as a regular income.

The lump-sum amount will help them pay off any immediate liabilities and invest in long-term goals. The regular income will help them continue running the household expenses.

Step 4: Choose Premium Payment Mode

Decide how long would you like to continue paying the premiums
You can choose to pay for a few years, or pay all at once

Ideally, you should choose the premium payment tenure such that you pay all your premiums before retirement. So, that there is no burden on your post-retirement income if you chose a long-term life cover.

Step 5: Complete the Application & Submit Documents

Life insurers need relevant information about your health, family history, employment etc. You can fill all the information in the application form and submit supporting documents online.

Step 6: Medical Examination & Policy

Once you submit the proposal form for the term insurance cover, the insurer may ask you to undergo a medical check-up at a designated clinic. This medical test is free of cost for you and the report goes directly to the insurer.

The insurer will accept your proposal based on all the information you have provided and the medical tests.

Note: At times it may happen that the insurer may modify your term cover a little. Do not worry, it is not a rejection of policy but the modification reflects insurer’s perception of risk and benefit eligibility for you.

Once the insurer approves the policy you should check all the details and ensure that everything is in order.

Step 7: Claims & Claim Settlement

Term insurance plans from Canara HSBC Life enjoy a quick and stress-free claim settlement process. Additionally, for the most part, your nominees can file the claim online.

Term Insurance Plan is More Important

The way you love your car, your family loves you. So, when you have insured your car, why not buy term insurance too for the sake of your loved ones. The best part is the cost of adequate term insurance cover for your family is less than the car insurance.