The SIP or systematic investment plan which is ruled to be one of the best investment option for wealth creation will fail to meet its ultimate goal in case the one tendering monthly dues towards it meet untimely death. Primarily, SIP investment calls for regular and consistent savings, to reach an estimated goal.
So, as a matter to confront any uncertain situation, you need to take a term plan such that even if you lose a job or some earning due to some ground or meet untimely death, your SIP continues and your long-term financial goal per se creation of a corpus to meet a liability is realized.
How much cover do you need to ensure your long-term financial goal via SIP is not left unmet?
With a simple example, you can understand the importance of term insurance while investing in SIP. Say, you are betting on the regular saving through SIP with a monthly investment of Rs. 5000 and have no term insurance in place, then in such a case if you with an aim to meet your daughter's education higher education expenses through corpus of Rs. 50 lakh in 15 years time, can falter in your realization if you happen to meet some unfortunate circumstances.
However if you have made your financial plan foolproof with a term cover, say for a SIP investment of Rs. 5000 in a month, you tender a sum of Rs. 500 or 10% of the investment in SIP towards term insurance on a month on month basis, then surely you would be able to meet your financial liabilities without fail.
So, it is advisable to opt for a term insurance plan beforehand to avoid any unprecedented circumstance at a future date.