When should Decreasing Term Plan be taken?
When should Decreasing Term Plan be taken? A decreasing term plan should ideally be taken as soon as a loan or mortgage is undertaken. Decreasing term life insurance is a kind of insurance that specifically covers loans and mortgages. It is designed in such a way that the sum assured always matches the unpaid loan amount and so if the policyholder dies within the policy period, the nominee will get the exact amount of money that would be required to pay off the loan. Therefore if you have recently taken a loan or are planning to mortgage your house, take a decreasing term plan too.
I took a loan 4 years ago. Would it be wise to take a decreasing term plan now?
If you took a loan 4 years ago, then a part of the loan must be repaid by now. In such a case, you need to calculate how much money you still owe to the lenders. If your loan was for 5 years, then it would not make much sense to buy a decreasing term plan now, when most of the money is repaid. However, if you have taken the loan for 10 or more years, then you must buy a decreasing term plan right away. The value of the plan will be equal to the amount of money you still have to pay back and this will reduce as you repay the loan periodically.
I am planning to mortgage my house next month. Should I take a decreasing term plan now?
If you are planning to mortgage a property, you must most definitely buy a decreasing term plan. And because these plans are quite reasonably priced, you should not think twice before getting one. If you are mortgaging your house, you need protection against the mortgage. Imagine what would happen to your parents, partner and kids if you were to die unexpectedly? Not only would they be left grieving, their house would also be taken away and they’d literally have nowhere to go to. To avoid such a thing, take a decreasing term plan as soon as you mortgage a property.
I have a life insurance plan and a child plan. Do I need to take a decreasing term plan now?
Even if you have other kinds of insurance plans, you most definitely need to take a decreasing term plan if you have loans and mortgages. Decreasing term life insurance provides you with additional coverage. So if you die, your family can use the death benefit from the life insurance policy to sustain their livelihood. They would not be required to spend the money repaying your loans and mortgages. Therefore no matter what other insurance policies you have, if you have a loan or mortgage, you should definitely take a decreasing term plan.