Should You Buy Term Insurance If You Don’t Have Dependents?

A term insurance plan eases the financial burden on your family members after your death by paying them a handsome amount i.e. sum assured. But for the payout to come, the death should happen during the policy term chosen by the policyholder. That means, if you survive till the end of the policy term, there are no maturity benefits to have. And if you do not have any dependents, term insurance may not seem that important to you. But having the same can still be good for you in light of the possible scenarios highlighted in this post. Let’s read about such scenarios.

Scenarios Where Term Insurance Can Come in Handy

Term insurance can come in handy in the following situations and make your family feel good with its flexible payouts – lump sum, monthly installments or a combination of both. Let’s have a look.

Marriage

You might not have dependents now assuming you are not married yet. But you might get married later and have kids too. Such milestones not only raise your happiness but also your financial responsibility. And you would not like your spouse and kids to be in despair in case you die before them. Having a term insurance plan ensures they maintain their lifestyle without any problem.

Will Term Insurance Help You If You Already Have a Loan?

In case you have a home loan running in your name, the repayment period can span for a long time. Usually, this loan is granted for a maximum of 30 years. And if you die during the course of loan repayment, the responsibility of paying off the same will rest on your family members. On failing to do so, the lender will snatch the home and sell it to recover the outstanding amount left on your home loan.

But why should your family members pay off the loan in your absence when term insurance can ensure the same? The term insurance payout will help your dependents pay off the loan amount and keep the home intact. Some banks also attach term insurance to a home loan upon disbursal. So, the EMI of the loan will also include the premium amount. Decreasing cover applies to this type of term insurance. It means the cover amount will reduce with each payment of the loan EMI.

Benefits of Term Insurance When Diagnosed with a Critical Illness

The treatment of critical illnesses such as cancer, heart attack and kidney impairments can cost you a lot. Besides, you can be out of work for a reasonably long time based on the severity of the condition, thus compounding your financial worries. But with term insurance, you can avoid these problems. A pure term plan may not cover critical illness. But you can add a critical illness rider to the base term plan by paying an additional premium. A lump sum payment is made to you upon diagnosis of any of these critical illnesses.

• First heart attack of specified severity
• Cancer of specified severity
• Benign brain tumour
• End Stage Liver Disease
• End Stage Lung Disease
• Kidney failure wherein constant dialysis is required
• Open heart replacement or repair of heart valves
• Major Burns
• Major Head Trauma
• Permanently paralyzed limbs
• Transplantation of major organs/bone marrow
• Stroke leading to permanent symptoms
• Surgery of Aorta
• Open Chest CABG
• Coma of specified severity
• Some more diseases & conditions

Some term plans also offer a premium waiver benefit rider by which you don’t need to pay the premium in case you become disabled due to an accident or are diagnosed with a critical illness.

Bottom Line

Having no dependents does not decrease the significance of term insurance plans given their wide-ranging scope explained in this article. What you need to do though is compare term plans based on the sum assured and premium of base term plan and riders (if chosen), respectively. Also, check the flexibility of offers before zeroing on the best deal.