Why Should You Choose a Term Insurance Plan For the Self-Employed?: Being self-employed is extremely empowering but can incur many financial risks and responsibilities, making financial planning a critical decision.

Financial planning provides a sense of satisfaction by helping you achieve your financial goals and giving your family the monetary assistance they might require in your absence.

For any self-employed individual who does not receive regular salaries, investing in a life insurance policy like a term plan is an intelligent decision. It offers a wide range of benefits to the policyholder. Managing a budget can be a task for many, but with a term insurance calculator, you can easily calculate the estimated premium.

Let us dig deeper into the different aspects of term insurance that can assist you and why you should buy it.

Benefits of Term Insurance to Self-Employed

●   Economical Price

With no regular incoming salary, you can benefit from cost-effective premium pricing when you choose a term insurance plan. This way, you give yourself and your family financial protection without spending much money.

●   Flexibility of Premium Payout

Many providers offer term insurance plans that can be customised according to your needs. You can decide the payment mode of the premium based on your capacity. This flexibility of premium payout allows self-employed people to choose from a single payout, regular interval payouts or another pre-decided time frame for payout without impacting the insurance cover.

●   Easy to Understand

Life insurance policies can be a little overwhelming as multiple options are available. However, a term insurance plan as a product is not too complicated and has a few underlying terms and conditions or other prerequisites, making it a wise choice.

●   Availability of Add-ons

The option of customising a term insurance plan with necessary add-ons is another advantage for self-employed people. You can choose loan repayment cover, illness cover, and much more with add-ons for better financial assistance.

Why Should You Buy Term Insurance?

• The predictability of cash inflow is not easy for self-employed people. With the help of term insurance, you get guaranteed financial protection for your family, regardless of your business loss or success.
• When you are self-employed, you do not get the company benefit of a provident fund, group health insurance, or life insurance. With the help of a term insurance plan, you are investing in a future where you can meet your family’s requirements even in your absence.
• As part of future planning, a term insurance plan can also make the transition of handing over the business to another person smoother in your absence by covering the debts and expenses as per policy capacity.
• For term insurance policy owners, there are also multiple tax benefits to take advantage of. This includes exemptions on premium amounts based on different rules and regulations and an upper limit of ₹1.5 lakhs as per Section 80C of the Income Tax Act.

How to Choose Term Insurance?

To choose the right term insurance plan as a self-employed individual, you must look into the following factors.

• The amount of coverage the insurer provides to cover your family’s future expenses and business debts
• The list of add-ons with the term insurance policy to enhance the overall coverage
• The length of the tenure is also an essential factor; depending on the tenure, you can plan for future financial decisions.
• The claim settlement ratio of different insurers ensures you choose the one with the highest ratio and get your claim amount without stress and hassle.

Conclusion

One of the most important financial decisions for self-employed individuals is choosing which insurance policy to invest in. With the help of a term insurance plan, you have a safety net that provides financial protection to you and your family. It is affordable, flexible, and offers many other benefits to help you navigate financial challenges better.