Is Your Financial Plan Ready? Term Life Cover Should Be Your First Step

A financial plan is essential for every individual, regardless of their responsibilities. The financial planning puts your short and long-term objectives in order and paves the way to fulfil them. However, there is another important part of the financial plan which aims to protect the financial interests of your goals and dependents.

This financial protection plan is also called a contingency plan and provides a roadmap for you in case of emergencies. Health, term life insurance and other insurance are part of this financial plan. This blog explores details regarding term life cover to be your first step.

Why Protection Comes Before Wealth Creation?

Many people believe financial planning starts with investing. However, that’s only half the truth. Real financial planning starts with protection, the kind that ensures your dreams continue, even if life throws a curveball.

Before you save for a car, invest in stocks, or plan for your child's future, ask yourself: What happens to these goals if something happens to me?

That’s why a financial plan should always begin with a contingency plan, one that can withstand emergencies like job loss, illness, or even death.

The Right Sequence to Execute Your Financial Plan

A plan without implementation is merely wishful thinking. The milestones you set for yourself and your family define how your life should be. Few of these milestones are so important that they are even more important than your life.

Thus, achieving such important goals cannot be left to less than perfect execution of your plan. The steps of executing different transactions in your financial plan should be in the following manner:

• Create a Contingency Plan
  
  
  1. Buy term life insurance cover
  2. Secure health and Mediclaim insurance
  3. Build an emergency fund
• Lay the Foundation for Long-Term Security
  
  
  1. Start saving for retirement
  2. Invest in your children’s future (education and marriage)
• Pursue Mid-Term Goals
  
  
  1. Plan for buying or renovating a home
  2. Save for a vehicle or vacation
• Pay Off High-Cost Debt
  
  
  1. Prioritise loans with high-interest rates, like personal loans or credit cards

Why Contingency Planning Should be Done First?

Imagine planning a long road trip with family or friends. You have decided the destination, date of journey, places to visit and return. Should you just take your car out, but everyone gets in with the baggage and starts driving?

Ideally, you would check if the car is ready for the kind of journey you wish to undertake. You’d check for tire pressure, kilometres to next service and even the paperwork before declaring the car fit for the long journey.

Life is not very different from a long road trip. You will face many different patches, some comfortable, some rough, there will be turns and twists, and you will meet a lot of people. You will also make a lot of money during your journey and spend a lot of it too.

However, in life, the journey is one-directional; after you, the next generation must continue driving forward. A contingency plan helps you achieve this certainty even in the most difficult, unforeseen situations.

Why Term Life Insurance Comes First?

Among all the insurances and protections you need, term life insurance is the most critical, especially if you have dependents. Here’s why it should be your first priority:

• Your dependents stand to lose their only source of financial support in your absence

•  needed to sustain the family and help meet their goals is substantially large

• The cost of hospitalisation is lower and you can bear with savings and loans. So, if you must choose between life and health, life comes first.

• The job loss would be temporary and you can still manage with your savings and recover later. However, loss of life is not recoverable.

1. Make Your Term Insurance More than Life Cover: Since term insurance is the first step after your financial plan, why not make it more than just a life cover? There are two ways you can turn your term insurance cover into an ultimate risk manager for your family:
   
   
   • Add more benefits to the base plan
   • Select features and plan benefits to make the plan work like a swiss knife of financial tools

Make Your Term Plan More Than Just Life Cover

The best part? Today’s term insurance plans are not just limited to death cover. You can enhance your policy to make it a more comprehensive risk management tool. Here’s how:

Add Riders to the Base Plan

These additional benefits will help you cover other natural risks like health, accident and disability. These risks may not always end up in the loss of life, but are financially taxing nonetheless.

So, don’t forget to add the following benefits to your base term plan for a nominal increase in premium:

• Accidental death and disability cover

• Premium waiver benefit, at least in the case of disability

• Critical health insurance for life-threatening diseases like cancer, heart failure, etc.

Building a Flexible Term Plan

Apart from the additional covers, you can choose many features in the best online term plans, which will turn them into a well-rounded financial solution. For example, consider the following problems with your current term plan setup:

• After you, your spouse will be the primary caretaker of the family. But if she’s a homemaker she cannot secure a term cover

• You may have a family floater Mediclaim insurance for your homemaker spouse. However, she’s also prone to unpredictable life-threatening diseases.

• Your dependents may not have managed a large amount of money. Term insurance will suddenly add a crore rupees to their account. How comfortably can they use this money for their future needs and goals?

Who Should Buy Term Insurance Immediately?

You should consider term insurance if you:

• Have dependents (children, spouse, ageing parents)

• Have ongoing liabilities (home loan, personal loans, EMIs)

• Are the sole or major income earner in the family

• Have future goals like children’s education, marriage, or spouse’s retirement to protect
  

Even if you’re single or young, term insurance comes cheap and secures your future insurability in case of health issues later.

iSelect Smart360 Term Plan by Canara HSBC Life Insurance

Here are a few ways the iSelect Smart360 Term Plan from Canara HSBC Life Insurance provides solutions for these problems:

• Critical health cover is inbuilt with the term cover without any additional premium. So, the moment you buy term cover you automatically have a term cover as well.
• You can add your homemaker spouse to your term cover and have a joint life cover. After your demise, the cover for your spouse continues without any extra charge. Thus, they’ll also have life and critical health cover.
• You can divide your term life cover benefit amount payable upon the claim, into two parts:
  
  
  1. Lump-sum payment: for taking care of immediate liabilities, and investing for future life goals
  2. Regular monthly income: for taking care of regular expenses and lifestyle. You can choose to increase this income every year to account for inflation.

Secure Before You Grow

Financial planning is not just about accumulating wealth, but also about preserving and protecting it. Without a contingency plan, your dreams can be derailed at any moment.

Term life insurance is the first layer of protection. It is a financial safety net that ensures your family never falls, even when life takes unexpected turns. It is cost-effective, customisable, and essential.

So, before you invest in stocks, mutual funds, or retirement plans, take the first right step: get term life cover. It’s not just a product; it’s a promise of continuity for the people who matter most.