Use returns from your savings to pay for it
One of the biggest obstacles toward the acceptance of term insurance is an emotional one. No matter how low the premiums are, some people are just uncomfortable with the idea of paying premiums for insurance over a period of time and if nothing happens at the end of say 20 years, there is nothing back.
On the other hand, people generally do not mind seeing insurance as a form of savings. Emotionally, the idea that at the end of the day, there is always something back provides the comfort that there is no loss and the premiums are regarded more like disciplined savings.
I’ve learnt to respect that people are different and for those who are just uncomfortable with the idea of writing off insurance premiums as a cost, they have the option of buying term insurance with a “premium cashback option”.
It’s like arranging to rent a house from a landlord for 20 years and at the end of the 20 years, all your rental will be refunded back if your keep to the agreement for the full 20 years. The real “rental cost” in such an arrangement will be the returns you would have generated from the savings.
The main drawback for buying insurance this way is that the premiums is much higher than a simple term insurance arrangement. Thus, it will only be suitable for people who have the financial means to insure in such a way.
For those who do not have budgetary constraints, there is yet another way to get covered…