I am a 25-year-old salaried professional and the sole earning member of my family. I want to invest in a life insurance plan that offers risk cover in case of any unforeseen event and doesn’t cost too much. Please advise.

Term life insurance plans offer financial security to your dependants in the eventuality of your death.

It ensures that your family maintains its standard of living in spite of a drop in the income.

It is the simplest form of life insurance.

The term plan works like a contract that provides a specified death benefit, but has no cash build-up or investment component.

Since the premium for a term plan is very low, a person may get adequately insured for a relatively low premium cost.

You could also consider a term with return of premium, if you seek a capital guarantee on your invested amount.

I am a 30-year-old man. I have been investing in short-term investment instruments such as mutual funds. I plan to invest in a life insurance plan this year. How long does the term of the life insurance policy have to be?

We always advise people to invest for the long term, because whether you take traditional plans or unit-linked insurance policies, life insurance plans are most beneficial in the long term.

The term you choose can depend on your personal circumstances, though it would be advisable to look at terms of 10 years and above to maximize benefits.

Readers are welcome to write in with their queries to askmint@livemint.com. The questions will be answered by senior executives from leading insurance firms.

This week’s expert is Rajesh Relan, managing director, MetLife.