Life is a game of priorities. Play it right

Debts and liabilities can wreak havoc on the family. When reserves are low, term insurance can help restore stability.

One of the worst tragedies of human existence is seeing a loved one pass away. The demise of a loved one leaves behind a void that nothing can fill. It might get easier to live with this grim reality with the passage of time, but it by no means bearable.

A bigger trauma is the financial uncertainty caused by the passing of a family member. A lost income can literally stop a family in its tracks. With no money coming in, the family is unable to pay daily expenses, settle bills, support children’s education or parents’ medical bills, etc. There is no avenue that pays for the future. The family’s dreams are struck down in one fell swoop!

Repaying debts with term insurance

But if the deceased has had the foresight to take term insurance, the policy money can pay for small and big expenses. The term plan corpus can support the family till such time that it consolidates its fiscal position and finds an alternate source of income. In the meantime, the plan money can help the house run and pay essential expenses.

However, term insurance plans are extremely useful in repaying unpaid debts, such as home loans. Since these plans provide a high sum assured, the money can be used for existing liabilities. Repaying a home loan is crucial, or else the loan provider can initiate attachment proceedings for the property. The family can lose its home and the only shelter it has remaining. Besides, in the face of financial adversity, the house is the only tangible asset the family has – it can provide funds in the future against a mortgage or when it is leased out.

A term plan provides sufficient funds to foreclose a home loan, or at least pay a bulk of its EMIs at one go. In other cases, the money can be used to repay private loans or other liabilities, so that creditors do not come knocking and harass the family.

Taking term insurance makes fiscal sense

A term policy is the responsible family person’s go-to insurance product. Since the premium payable is affordable, it becomes easy to get a high life cover at a small sum of money paid yearly. It is beneficial for those with growing families and a modest income. When a person cannot afford an expensive life insurance policy, term insurance can provide a basic life cover for his loved ones.

Term insurance plans thus ensure complete peace of mind for the future – they can finance one’s dreams and also repay troublesome liabilities. The family is kept safe and protected from financial uncertainty at all times.