Doctors dedicate their lives to caring for others, which is why they often prioritise their patients' needs above their own. However, doctors also have families, and it is essential to consider their financial security and that of their loved ones. One effective way to ensure this is through term insurance. Read on to explore the importance of term insurance, factors influencing their term insurance premiums, and more.
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Term life insurance covers the insured for a certain period. The term is usually 10 to 30 years, or sometimes more, based on the insured’s needs. It provides simple and pure protection; if the insured dies during the term, the policy provides a death benefit for the survivors. However, the insured receives no benefit if he/she survives the term. This simplicity will make it an excellent solution for many physicians and other professionals who need to give their family members a cover without the headaches of more complex insurance products.
There are some compelling reasons why term insurance is significantly crucial for doctors like you:
Your income as a doctor is likely substantial, but what if you are no longer there to provide for your family? Term insurance will come in handy as it ensures that your family is in the same living style, paying their debts, mortgage, school fees, and daily expenses. Term insurance will act as a safety net, relieving the burden of financial insecurity while they try to cope with the loss of their loved one.
Term insurance is relatively cheap compared to whole life insurance. Their premiums are low and, at the same time, provide high coverage. This means you can easily safeguard your family's future without financial stress.
Most doctors leave medical school with significant debts in the form of student loans, business loans, and mortgages. In case of your untimely death, term insurance can help pay for these debts, so your family will not be left burying themselves under mountains of financial obligations once you are gone.
Having term insurance brings the peace of mind that you need. Such mental comfort enables you to work without worrying about your family's future. Indeed, such an assurance can enhance a person's welfare and job satisfaction.
Term insurance comes in different coverage amounts and terms, so you will easily find a policy that can suit your needs. You can choose a short-term or long-term policy that perfectly fits all of your financial goals and family requirements.
In India, term insurance also offers a tax benefit under Section 80C of the Income Tax Act. A person can claim an exemption of up to ₹1.5 lakh in every financial year, which helps considerably in reducing the taxable income. Furthermore, in case of an unfortunate demise, his or her beneficiaries receive the sum assured; this benefit is exempted as per Section 10(10D). All such tax benefits make term insurance even more attractive to doctors.
Choosing the right term insurance policy requires much thought and research. Here are the steps you might want to follow to make the right choice:
Consider your family's financial situation, the amount of debt you have, living expenses, and future obligations. This will enable you to establish how much coverage you need. Determining these factors helps ensure you have chosen a proper policy to protect your family.
Research different insurance providers and compare their policies. Compare premiums, coverage amounts, terms, and additional benefits. This research can help you find the right fit for your budget and ensure you are not overpaying for coverage.
They can guide you to a great insurance policy, providing valuable insights into what suits you best. They will explain the details so you fully understand your options, simplifying the process and leading to better choices.
As your situation changes, such as having a child, changing income, or changing jobs, you must also update your insurance coverage. By reviewing it regularly, you can ensure that you are maintaining relevant coverage at each stage of your life and financial status.
ACKO Life Flexi Term Plan is a modern, flexible, and customer-centric solution for long-term financial protection. In this plan, you benefit from a unique level of policy flexibility and its fully digital policy management system allows you to easily make any policy adjustments (endorsements), such as:
You can also add ACKO’s valuable riders, including the ACKO Life Accidental Death Benefit Rider, the ACKO Life Accidental Total Permanent Disability Benefit Rider, and the ACKO Life Critical Illness Benefit Rider.
The Critical Illness Rider covers 21 critical illnesses, including life-threatening common illnesses among women, such as breast, cervical, fallopian, and ovarian cancer.
When considering term insurance, doctors should know what impacts their premiums:
Younger applicants tend to pay lower premiums since they are considered less risky to insurers. As one ages, premiums tend to increase, so securing coverage sooner can lead to savings.
Your overall health affects your premiums. In most cases, the insurer will require a medical examination, and pre-existing conditions mean that you pay higher rates. Staying fit will enable you to get better rates.
Smoking, drinking alcohol, and engaging in hazardous activities will attract high premiums. Doctors who lead healthy lifestyles often receive lower rates.
The amount of coverage you choose will directly affect your premium. Your premium goes up based on a higher coverage amount.
The term length will also affect your premium. Typically, the longer the terms, the higher the premium.
In a way, understanding how much term insurance coverage suits you can help in your financial planning. With that in mind, here's a rough guideline based on income levels.
As your annual income falls within this range, your coverage must be 10 to 12 times your annual income. In the term coverage scheme, that means ₹1,00,00,000 to ₹2,40,00,000. It will keep your family's lifestyle going and enable the settlement of dues in addition to taking care of future liabilities.
Between ₹20,00,000 and ₹40,00,000, take up coverage 12 to 15 times the amount of your income. That is ₹2,40,00,000 to ₹6,00,00,000, which would support your family's finances, debts, and other lifestyle needs.
If the annual income is above ₹40,00,000, the coverage should be 15 to 20 times the income. At this amount of coverage, you can take care of everything essential for your family's future, such as education, mortgages, or business debts.
NOTE: You can use a term plan calculator to estimate the right coverage or consult a financial expert for personalised advice for informed decision-making
Term insurance is an essential part of doctors' financial planning. It provides comprehensive coverage so your loved ones are taken care of financially in case of an untimely event. While buying a term plan, make proper decisions, and for that, evaluate your requirements carefully to protect your family's future.
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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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