A term insurance plan ensures the financial protection of your loved ones in the event of an unexpected loss. Nevertheless, with the passage of time, your financial needs evolve, and so should your insurance coverage. Be it marriage, raising children, or taking on financial liabilities, ensuring that your term insurance plan aligns with your current responsibilities helps secure your family’s future.
In this handbook, we’ll discuss when and how to enhance your term insurance plan to various life milestones.
When To Upgrade Your Term Insurance Plan?
Your financial goals evolve with time, so you need to examine and reassess your coverage. Listed below are the important milestones where an upgrade could be necessary:
✅ Marriage
Once married, your financial obligations become higher. Increasing your term plan helps your spouse remains financially secure in the event of your death.
✅ Becoming a Parent
With children come future costs such as education and living expenses. A higher sum assured helps secure your family’s long-term financial stability.
✅ Career Growth
A job promotion or salary hike translates to a better lifestyle. Reassessing your term insurance coverage helps ensure your family’s financial security remains intact.
✅ Availing a Home Loan or Debt
If you have taken a home loan, car loan, or personal loan, a term plan with an adequate sum assured can prevent your family from being burdened with outstanding liabilities in case of your untimely demise.
✅On the Brink of Retirement
If you are in your late 40s or 50s and still have financial dependents, reviewing your coverage can be beneficial. However, increasing coverage at this stage may not always be feasible, as insurers have age limits and premium affordability considerations.
Tips to Upgrade Your Term Insurance Plan
The following are some useful tips to increase your term insurance coverage:
- Raise the Sum Assured
Some insurers offer the option to enhance coverage at predefined life milestones, such as marriage or childbirth. If your policy allows this, you can upgrade your existing coverage. Otherwise, you may need to purchase an additional policy with a greater sum assured.
- Add Riders for Enhanced Protection
Riders enable you to personalise your term insurance plan according to your requirements. Popular riders are:
✔ Accidental Death Benefit: Offers an additional payout if death occurs due to an accident.
✔ Critical Illness Cover: Provides financial assistance if diagnosed with life-threatening diseases.
✔ Waiver of Premium: Waives future premium payments if you become disabled or critically ill, ensuring the policy remains active.
- Choose Convertible Term Insurance
Certain term policies have a conversion facility, which enables you to convert to a whole life or endowment policy if your financial objectives change.
- Purchase a New Term Insurance Policy
If your existing policy is not flexible, you may purchase a new term plan with improved coverage, features, or benefits that are best suited to your current and future requirements.
A term insurance plan isn’t a forever buy—it needs to adapt as your financial requirements change. Periodic checks on your cover and reinforcing it at crucial life milestones make your family financially protected. By raising the sum assured, introducing riders, or changing policy, increasing your policy is a key step in securing your family’s future.
