What is the best way to show your family how much do you love and care about them? By ensuring their happiness and protection even in your absence. The best way to do this is by buying a life insurance policy. There are various types of life insurance policies, and one of the most popular ones is the term insurance policy. It is a policy that you buy when you need protection for a specific term. Hence, the name term insurance policy. Once the term expires, you can either renew the policy, convert it into permanent coverage or let the policy terminate.
When is the right time to cancel the term insurance policy?
If you have a family that depends on you, then selecting and purchasing a good term insurance policy is one of the important responsibilities on your shoulders. Your insurance agent must have already told you the exact amount of life insurance that you will need to financially secure the future of your family, considering their present needs, future needs and inflation as well. Term insurance is usually taken to fulfil a specific purpose. If the purpose gets solved within the term period, then you might want to cancel the term insurance policy. Let’s see the causes due to which you may want to cancel the term insurance policy.
- Income replacement – In a lot of families, there is more than one working member, which brings double income. If both the married partners are working, there are instances where the income of one spouse gets replaced by death benefit in case of the early death of the insured person. This fills the void of the income that the deceased person used to get. In such cases, the living partner might want to cancel the term insurance plan.
- Mortgage protection – Term insurance lets you take the policy for the term of your mortgage. To take up a term insurance policy for the exact number of mortgage years or less than that and the amount of policy is something that you should discuss with an experienced agent and then decide. This will make sure that even in your absence, the quality of your family’s life won’t be affected.
- Elimination of Debt – There are various loans that a person might have on his head, like a credit card loan, home loan, education loan, etc. You surely don’t want all this debt responsibility to fall on your family’s shoulders after you pass away, and neither do you want them to face the creditors. Thus, people buy a term insurance policy to take care of the debt amount. But if the debts are already been paid off, then you might want to cancel the term insurance policy when it is no longer needed.
- Fund Colleges – Many people find it difficult to fund their child’s college fees and other education-related expenses, but they get term insurance to support their child’s education. After the kid is graduated and the term insurance policy is no longer required, the policyholder can terminate it.
- Unpaid medical expenses – People having a family history of some critical illness usually take a term insurance policy so that the settlement of hospitalization bills and medical expenses don’t fall on their family. If you have a good Mediclaim plan or enough money to take care of any medical expenses, then you can eliminate the term insurance policy.
- Weddings and other important functions – In India, weddings are a huge affair that involves a lot of expenses. Thus, some parents save money to organise the grand wedding of their kids. Once the wedding is over, this term insurance policy can be terminated.