If you recently got married, you must be full of excitement about the bright future you are going to have with your partner. In the bubble of joy, sometimes we forget to talk about the next rational steps you and your partner must take to secure both of your futures. And, what is that rational step, you may wonder. Financial planning. While discussing financial planning for couples may appear grim, it is a critical step towards a secure future. Many young couples assume they are too young for life insurance or that it is simply another expense that they can put off for another day. But here’s the truth: life is full of unexpected twists and turns, so be prepared.
Let’s consider this scenario: Meet Ankit and Mehak a young, hard-working, high-earning couple. Two years after marriage, they took out a loan to buy a flat worth ₹1.20 crore. They could afford the ₹90,000 EMI due to their high earnings. Mehak died in a terrible accident on their third anniversary evening. This was demoralizing and financially taxing because Ankit had to sell the flat right away. He may have paid for the flat with the insurance claim money if the couple had planned for the unexpected with life insurance.
Let’s take a look at why you and your partner should understand term insurance meaning in the context of the benefits one will be able to have:
Why Do Young Couples Need Term Insurance?
1. Provides financial security for your spouse: As newlyweds, you’ve just started your life together and must have ambitious plans. For example, wanting to take as many as international trips together, or finalising the flat you two want to move in together. However, life sometimes throw curveballs, and term plans for newlywed couples help in those instances.
In the unfortunate event that your partner passes away, coping with financial hardship is the last thing you want on top of emotional grief. If both spouses work, the family will rely on their earnings to meet all of its financial needs. Hence, read about the term insurance meaning, life coverage to get a guide as soon as possible. Joint life insurance policies help with financial commitments such as debt repayment and loan payments, as well as replacing lost income, allowing you to retain the lifestyle you had with your partner.
2. Will allow you to plan for your children’s future: Do you intend to send your children to the best colleges in the country? Life insurance policies such as term plans (after the insured has claimed them), endowment plans, and ULIPs can assist you with this because payouts can help them fund their dream college even if you are not present.
3. Riders and flexibility to match your financial plan: There are number of benefits of investing in a term insurance plan early on. You save on premiums payable and can buy riders that provides optimum protection. For example, riders such as premium waivers, limited payment options, and smart exit benefits make it simple to easy and renew your policy.
4. Leave an inheritance for your next generation: When you sit down to understand the term insurance meaning with respect to joint term insurance, you will understand term insurance significantly helps in leaving inheritance for the next generation. Term insurance provides financial security for your loved ones. They provide much-needed financial support to your family while you are not around and help to leave an inheritance for your heirs.
5. Peace of Mind: It’s reassuring to know that your family’s future is secure and that you are prepared for any emergency. When you begin your life as a couple, a term insurance policy can protect your lifestyle and ensure your partner’s financial security in your absence.
Why should Couples opt for Joint Term Insurance instead of individual term insurance?
Dual benefit of full cover for life assured and 50% cover for spouse: A joint term insurance policy is typically less expensive than two individual policies. With term insurance plans that include joint coverage for spouses, the additional benefit is paid out in the event of the primary policyholder’s death. Once the primary life assured passes away, the base sum assured is paid, and the surviving spouse is protected by the policy for 50% of the sum assured.
Affordable life insurance coverage for both partners: Joint term insurance is frequently less expensive than purchasing a separate term plan for each partner because single premium payments cover both husband and wife. Furthermore, managing a single insurance plan would be considerably easier and less expensive.
Term plan premium waiver upon death of life assured: Couples who get joint term insurance can receive a future premium waiver. If the primary policyholder dies during the policy term, the surviving spouse will receive the sum assured as a death benefit and will not be required to pay any future premiums to keep the life cover.
Secure children’s financial future: If the parents die within the policy term, their children, as beneficiaries, will receive a sum assured in the form of a regular monthly income or lump sum. This would enable the dependents to fulfil their financial obligations and enjoy a secure future.
Tax benefits as per the prevailing norms: When one start to understand the term insurance meaning, one thing they will be most interested in is understanding tax benefits. One is eligible for tax benefits under various sections of the Income Tax Act of 1961. Couples can claim tax benefits under Section 80C by submitting a renewal premium receipt. Section 10(10D) also covers the sum assured received.
The need for joint life insurance is growing, particularly as the number of working couples have also risen over the years. Following COVID-19, more people are purchasing high-value term insurance coverage. This suggests that individuals are seeking sufficient protection rather than just mere coverage. With an uncertain future, couples should undoubtedly choose a joint-term insurance plan to protect themselves against unanticipated circumstances. Choosing a joint-term plan for you and your spouse might be tricky because it is critical to understand your individual requirements before approaching an insurer.
And lastly, financial planning is an unavoidable part of life. When life insurance and investments are managed appropriately, you can have peace of mind that your loved ones will be taken care of in your absence.