Term life insurance is a very handy type of life insurance. However, you need to have the best coverage to ensure you are adequately covered and your loved ones have the highest amount of financial protection. If at any point you feel your life cover is insufficient, you can try upgrading your term insurance policy. There are some easy ways in which you can do so. Read on to know more.
How to Upgrade Your Term Insurance Plan?
Here are some simple ways in which you can upgrade your term life insurance coverage without too many hassles:
Change to Whole Life Insurance
You can consider changing your term insurance plan into a whole life insurance plan. Many insurance companies offer this feature along with their term plans. You can buy a term plan initially, at a lower rate. Then, when you are older and richer, you can upgrade the policy and change it into a whole life plan. This will increase the scope of the cover and will make it more flexible for you as well as for your loved ones.
- Buy Another Cover
If upgrading the existing plan isn't an option with your insurance provider, you can consider getting a secondary term insurance plan. This will help you to have a higher cumulative life cover which can wholesomely protect your loved ones in case you suddenly die.
- Look at Riders
Another way in which you can enhance your term life cover is by getting a few riders along with the basic term plan. Riders are add-on covers that increase the coverage and make the plan more flexible as well. You can invest in term insurance riders such as the critical illness rider, disability or the personal accident rider, the waiver of premium rider, etc. Doing so will surely help you to upgrade your existing term insurance cover and have a better and most suitable cover.
Buy an Increasing Term Plan
A good option here is for you to buy an increasing term insurance plan. In an increasing term plan, the coverage amount keeps increasing as the policy progresses. The premium is slightly higher than that of a regular term insurance plan, but the benefits you get are much higher. An increasing term plan automatically enhances your life cover from time to time and makes it easier for you to keep your family protected in a proper way.
These are some ways in which you can get a better cover with your existing term life insurance plan.
Evaluating the Correct Value
Before you upgrade, you need to know what your own requirements are from the term insurance plan. Only after doing that will you be sure that you need and how you can get that cover. Here are some pointers to help you understand the calculations:
- Evaluate the Milestones
You need to start out by evaluating the milestones of your family. For example, if you have a young child, you need to factor in his education costs. You also need to financially protect his other future milestones like his wedding and his entrepreneurship. If you have aged parents, you need to calculate their medical expenses. If your family lives in a rented house, you need to think about having a house of your own. Make sure the life cover is large enough to cover these costs so that your family can take care of them if you die without fulfilling your duties.
- Consider Your Debt
The next and one of the most crucial factors to remember is that your term life insurance plan should cover all your existing debts and loans. If you have taken a new loan now, after you bought your term plan, you should upgrade the volume of the term plan to cover your new loans too. This is very crucial and would ensure the proper financial protection of your loved ones after your demise.
- Check Your Budget
You may want an upgraded term plan with a substantially higher cover, but you need something that is affordable as well. If you buy a plan that is too expensive, you may struggle to pay the premiums on time. This, in turn, will lead to many problems and your life cover may lapse as well. So be careful and choose a cover that is large, yet economical.
If you are mindful of these factors, you will surely know what your ideal term life cover should be. And once that is determined, you can easily upgrade the plan for better and more comprehensive coverage.
To Wrap It Up
As you can clearly see from the points mentioned above, there are some very effective ways in which you can upgrade your term life insurance plan. Give these tips a try and you will surely have larger and more effective protection with you.