Term insurance becomes one of the most critical financial tools for a person who is unemployed; it can provide peace of mind and financial security for loved ones. While it might seem less relevant to consider buying a term plan without a steady income, unemployed individuals have families, and having a term plan in place can protect them in case something happens. In this article, you’ll learn why term insurance is important for unemployed people, key features to consider when selecting a term insurance policy, and more.
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Term insurance is a type of life insurance that offers coverage for a particular period. Normally, the duration runs between 10 to 30 years. If the insured person dies within this period, the beneficiaries will be entitled to the death benefit. In contrast to permanent life insurance, term insurance doesn't have cash value accumulation. It is, therefore, highly affordable.
Unemployed refers to people currently out of jobs and looking for employment. Unemployment can result from many factors, including economic downturns, changes in industry demands, and personal reasons. This category includes:
Those whose jobs were affected by company downsising or closure
Individuals who have completed their education and are now looking for their first job.
People who might have quit their old work to find new opportunities but are currently unemployed.
Transition workers are switching careers or industries and have a temporary gap from employment until they find a new job.
Unemployment can occur for various reasons, and unemployed individuals have responsibilities, financial obligations, and families just like anyone else. Let’s look at some key reasons why unemployed people need term insurance.
Even if you’re employed and face an unexpected job loss, your family will still have essential needs, including housing and educational expenses for your children. Term insurance provides financial protection for them to maintain their standard of living in your absence.
If you still have other outstanding loans, either personal or credit card debt, term insurance will pay this liability. This means your family won’t be burdened with financial stress when you are no longer around.
Term insurance is relatively inexpensive in terms of premium charges, making it ideal for unemployed individuals who wish to secure the future for their families.
This flexibility ensures that you have the right amount of protection to meet your family's needs and financial liabilities. You can increase or decrease the sum assured based on your financial situation.
Most providers allow you to choose the coverage duration that suits you, whether short or long.
Many term insurance plans can attach riders, including critical illness coverage or accidental death benefits, that offer extra protection for specific situations.
Term insurance plans are straightforward, which makes it easy for many to understand the benefit provisions and terms. This simplicity allows you to choose the correct plan based on your requirements without confusion.
Choosing the best term insurance plan based on your needs involves careful consideration of multiple factors, including:
While settling on the amount of coverage, one needs to consider their family's financial requirements and future needs.
Compare different term insurance plans from various insurance firms. Find the premium rate, coverage options, and claim settlement ratios and identify the best plan.
Choose an insurer with a good track record and claim settlement history. Reliability can also be measured through the positive comments received from the customers.
Talk to a financial advisor if you do not know what type of policy would meet your needs. They can help you understand your options and find a plan for your purpose.
ACKO Life Flexi Term Plan delivers a modern, flexible, and customer-centric solution for long-term financial protection. It provides a unique level of policy flexibility unmatched by most traditional insurers. With ACKO’s fully digital policy management system, policyholders can easily make any policy adjustments (endorsements), such as:
Raising claims—all via the mobile ACKO App.
Term insurance is an essential financial product for unemployed individuals in India. If you are considering purchasing a term plan, evaluate your needs and explore various policies to discover which term insurance policy you need to ensure your family's future. Additionally, check the insurer's reputation and speak to a financial advisor if required.
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Reviewed by Vaibhav Kumar Kaushik 
Acko Technology & Services Private Limited
#36/5, Hustlehub One East, Somasandrapalya, 27th Main Rd, Sector 2, HSR Layout, Bengaluru, Karnataka 560102
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