Enhancing Portfolio With a Term Plan

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Finished with my studies last year I bagged a good job and the worm of exploring various options in which I could invest my money bit me. Coming from a commerce background I was always fascinated by investing my money intelligently and see it grow and knew that I should start early to reap the maximum benefit. Wasting no time I fixed an appointment with a reliable investment advisor, who happens to be the elder brother of my best friend. Apart from explaining me about SIPs and other similar schemes he advised me to buy a term plan. After understanding what a term plan was about, I wasn’t much convinced at first. He told me that in term insurance plan I would be paying money for my entire earning life to the insurance company and would end up getting nothing myself. The insurance company would pay to my nominated person if in case I die during the policy tenure.

At such young age I was thinking about a lot of things but death. In that meeting I was convinced that this plan is not for me. Still as a matter of respect I did not interrupt him and listened in detail about term plans. The other schemes in which I could enjoy the benefits while I was alive fascinated me more. After coming home I was evaluating the various options and invested in a good SIP plan within that week and almost forgot about the term plans.

Life was going smooth and I was enjoying my work. Good things were happening in my life and my parents were searching a nice girl to get me married. Later that year I was travelling to Alwar for official work by road and met with a serious accident. That day I saw death from a close proximity. I got grave injuries and had to spend two months in hospital and follow up with physiotherapy for next six months.

This incident made me realize about the impermanence and unpredictability of life. Though we know about the uncertainty of life but how often do we seriously realize and make plans for it? We can actually die anytime, this fact we often undermine specially in young age.

I am the only son of my parents. They have raised me with lot of affection and they see in me their supporter of their old age. They have made huge sacrifices to provide me the best of education and facilities and now it is my turn to look after them and support their needs. My dad is near retirement and my mother a homemaker. I could feel their agony and fear when they used to visit me in the hospital. It is in the hospital I realized that my life is not only mine and my responsibilities are only going to increase from here. I can say that this incident made me a lot more mature as a person.

After discharging from the hospital I met bhaiya, my financial advisor and asked him to suggest which term plan I should buy. He smiled and explained me plans of a couple of top running companies. I did my own research on the internet as well and compared plans of various companies. One important thing I found that comparing term plans can actually save you a lot of money. Different companies have different features and quite unique with each other. These plans are highly customizable and one can enhance their coverage by adding various add-on called riders. One such rider is accidental death insurance in which the insurance company pays double the sum assured to the nominee in case the policyholder dies because of accident. I specifically got this rider added in my term plan learning from the brutal accident I recently met. Similarly, there are a range of riders like critical illness rider, disability rider, waiver off premium rider etc. each of these riders has their unique benefit which your insurance advisor can explain to you.

Also, these plans offer exciting tax benefits under section 80C, section 10(10)D and if you add critical illness rider to your plan you get tax benefit under section 80D also. If you are thinking about investments make sure you add a sound term plan as a part of your portfolio because you can’t be self centered always and you have responsibilities towards your family.