The 7 Vital Aspects of Term Insurance Plans in India

We all know about life insurance plans. Term insurance is one of the simplest forms of life insurance plan. Its fundamental objective is to provide financial security to the family members after the demise of the policyholder.

Term insurance is a policy type which is the purest type of life insurance policy. As stated before, its basic objective is providing financial security subsequent to the demise of the policyholder who acts as the main wealth provider for his/her family. Hence, a sudden demise of such policyholder can put the family members under terrible situation, who may not be able to bear huge debts like mortgage loan, children education, etc. In such scenarios, term insurance acts as a savior which takes care of such huge expenditures when the bread winner is no more able to provide.

Term insurance does not provide anything if the insured survives throughout the policy term. However, there are term plans named as ‘Term With Premium Back policies’ which enables the insured to get back all his premiums. These plans however require more premiums.

Further, you’ll learn the 7 vital aspects of term insurance plans in India.

Advantage of getting multiple term insurance policies-

It is beneficial to get two term plans say for 50 lakhs than an individual plan of 1 crore. In this way if either of the policy reduces its premium rate you will benefit from a lower premium.

Listing the policy beneficiaries

One should list those family members or dependents who feels are more vulnerable whether it’s spouse, children or parents. Account for specific percentages of the sum insured to different beneficiaries.

Deciding the sum insured amount

According to a fundamental rule, the person who is under 40 years should aim for a sum assured value of 15 times his yearly income.

For a person who falls between the age bracket of 40-45 years, he/she should aim at sum assured value of 10X his yearly income.

The person who is above 45 years should aim for sum assured value of 5X his yearly income.

Determining the policy duration

As per the thumb rule a younger person must aim for longer policy duration. There is a simple formula which gives an idea about the policy duration for a particular person of particular age.

Formula: Desired Retirement age - Present age

The right time to buy

There’s no specific time to purchase term insurance.  In fact the right time is now. You should purchase one when you’re healthy so as to avoid greater premiums. Also don’t forget to mention any kind of existing ailments you’re going through. Otherwise, the insurer can refuse to underwrite the risk and grant lower premiums to you if it discovers any medical discrepancy in future which was not informed earlier.

Importance of additional riders

It is beneficial for people to take advantage of rider options to get additional necessary protection. You can take help of critical illness rider for cover against severe accidents. People with disability problems can take help of Permanent Total Disability rider.  

Combination of Savings and Risk Coverage

Term insurance also acts as risk cover and as saving elements. It is advisable that each policyholder should assess their requirements, needs and the amount of income that they are willing to invest, before deciding on which type of insurance product to buy and invest in. 

Term Insurance- A Friend Indeed!

Term insurance plan is an important policy. It provides full coverage covering your family’s essential financial needs. Term insurance protects entire family against difficult or critical situations.

Term insurance-“plan which meets all needs is a friend indeed”

The above phrase rightly quotes term insurance as being the best friend of a man. It is the term insurance which alleges loyalty towards the protection of the family when the bread winner is not around.

Term insurance plans in India have now become a necessary for individuals. This is especially if you want to lead a fully secured life.

Term insurance can also be called as a life insurance plan which provides valuable coverage. However this coverage comes for a fixed time period at a fixed premium. Any claim made after the completion of the period stands annulled.

Different ways to obtain coverage

Potential customers can receive coverage in different ways. You can get coverage through diverse modes. There are several ways of payments and related conditions suiting individual requirements.

Term insurance plan is usually known to be the least expensive of all other policies. One is entitled to receive a significant death benefit at a comparatively reasonable premium amount. The premium extends over the period of the policy as stated in the respective company documents.

It gives various compatible solutions to the insured. These solutions are of most significance during the good and worst times.

Get term insurance online

Leading insurance companies offer and recommend useful term insurance policies. And the best way to spot them is online.

Most life insurance companies offer online facilities on their websites. This makes it easy for potential customers to browse through the various offerings. Perhaps it is the easiest way to evaluate from the plethora insurers and choose the best term insurance plan.

Tip- Look for term life insurance policies which provide several add-on benefits at regular intervals during policy period.

Making the wise decision

A wise decision is made after each selected policy is evaluated for its rules, offerings and benefits. When you evaluate you know which one policy suits your requirements. Therefore, you make the best deal!

Concluding Tips-

If there’s not enough time to pay the premium going to the insurance company, go online. You just need to log in to company website. In this way you will be easily able to pay your premium sitting at home.

Comparison of term insurance plans is important. Today it is not any more a difficult task. You can easily compare policies with other polices online and get all information regarding its advantages and disadvantages.

Look for add-on solutions and benefits. Check they are provided at regular intervals during the policy periods.

It is important to compare term insurance plans as these potential customers can compare the policies with other existing insurance policies. To get better results and other consequently solutions, you can easily compare the policy and its other various beneficial aspects which further offer positive insights at the end.