5 Crucial Life Events When You Should Revisit Your Term Insurance Cover

Once you get married, your expenses are likely to shoot-up. Your lifestyle will change, and you will end up with added financial responsibilities. Your household expenses including groceries, phone bills, medical bills, clothing & accessories, will also increase. For instance, if your current household expenditure is Rs 50,000/ month, it would increase to Rs 1 lakh after 10 years, if the projected inflation rate is 7%. (Source: IIFL Calculator).

Therefore, make sure you revisit your existing term plan and increase it to cover the additional financial responsibilities while keeping the inflation rate in mind. The revised term insurance cover will support your family members in your absence.

Welcoming a new-born into the world is not just a beautiful experience but also adds a ton of responsibilities. When you become a parent, you weave a lot of dreams for your child’s future. You might want your child to follow your footsteps and become an engineer or maybe what they desire of. However, big dreams come with a price tag. For instance, the current cost of an aerospace engineering course can go above Rs 3.5 lakh in India. (Source: SRM University) This cost will also increase in the future. To assure yourself that your child has a bright future, you should start planning today. Be sure of increasing your term insurance cover to secure your child’s dreams from unforeseen events.

The revised term insurance plan can now provide financial support to your family more effectively when you are not around.

Buying a house is a huge financial outflow and most of the time, you need to take a loan to meet the goal. While a home loan brings your dream of buying a house closer to reality it also increases your financial liabilities. If anything happens to you, your dependents become liable to repay your outstanding loan amount. The inability to repay the outstanding loan may result in loss of the house.

Therefore, when you buy a house or move to more expensive property, you must revisit your term insurance cover to cover this added liability.

For example, you already have a term insurance cover of Rs. 1 crore, considering your current responsibilities and you take a home loan of Rs.80 lakh. You must cover this additional liability with a term plan of Rs. 80 lakh, so that your loved ones do not suffer in case anything happens to you before the loan is fully repaid.

Whenever there is a significant change in your income, you should consider revisiting your term insurance cover as well. The reason is increasing income eventually leads to a better lifestyle and higher household expenditure, which will continue even in your absence.

Therefore, to ensure that your dependents continue to lead their lifestyle when you are not around, review your term insurance cover with an upward shift in your income.

Any change in your family’s situation resulting from unfortunate life events such as disability or accident makes it inevitable for you to review your term insurance cover. For instance, if any of your family members are permanently disabled as a result of an accident, your financial responsibilities are likely to increase. In such a situation, upgrade your term insurance policy to provide adequate financial security to your family.

Therefore, you should review your term life cover as soon as you have a major life event that impacts your financial liabilities. In any of the major life events, it is easier to upgrade the existing policy than buying a new plan. With Axis Max Life, you simply need a proof of the life event to upgrade your sum assured.

Be Ready to Embrace Life’s Changes

Just buying a term insurance policy and paying all the premiums on time is not enough unless the plan is sufficient to suit all your requirements. So, revisiting your insurance cover periodically is a great way to keep your loved ones prepared for life’s different events.