Term insurance As we all know, this is the type of life insurance. This provides financial protection for your family. The entire amount is paid to the nominee who dies with the insured person.
People tend to think of term insurance as the same as general insurance. There is a big difference between the two.
This article will provide you with detailed information on term insurance. When and how it can be taken, as well as its benefits.
What is Term Insurance?
Term insurance is the best and easiest way to get life insurance.
Term insurance can also be referred to as typical life insurance. It provides financial protection for a specified period of time or for a particular term.
It provides financial security for the family of the insured even if the insured is not present.
These insurance plans are the purest type of insurance policy.
This means that the policyholder continues to pay the premium for a set period.
If the insured is not present during the stipulated time, the sum assured (or the sum assured) will be paid to the nominee.
Even if the period expires, the insured is still healthy and not dying; so nothing is returned for the premium.
Important Points About Term Insurance
You can take it by anyone between 18 and 65 years old.
It’s the freedom to choose. It can be chosen individually or together, depending on your preference.
This allows you to pay a premium.
This can be done in one lump sum, or at regular intervals such as monthly, semi-annually, or annually.
The premium amount depends on the insured’s age and the amount of his insurance.
How many Term Insurance should you take?
It is recommended to purchase term insurance that covers 20 times an individual’s annual income.
If a person’s annual income is Rs 5 lakh, he would need term insurance that covers 500000 X 20, i.e. Total of 1 crore
At what age should you purchase term insurance?
Term insurance The ideal age for buying term insurance is 30.
At this point, everyone has responsibilities. He becomes an income source for himself; his financial situation improves.
They are likely to start a family or purchase a home by that point.
Insurance premiums decrease as you age.
As we age, our health begins to decline. This increases the risk for the insurance company. And, with age, the premium will also increase.
Term insurance premiums remain the same from start to finish.
Therefore, your premium will drop the earlier you get insurance.
Benefits of Term Insurance
Term insurance is different from general insurance because it offers certain benefits.
- The nominee of the insured has the option to receive the monthly income as the sum assured.
- A joint policy is possible. This means that husband and wife can both take out term insurance together.
- You can create multiple nominees for the insurance. The sum insured can then be divided into a percentage between all the nominees.
- As a rider, you can get benefits such as accident coverage, critical illness cover, and terminal illness coverage. These riders, which are very important but affordable, are included in the term plan.
- Plans with premium refund facilities are also available. In these plans, the principal you have deposited is returned at the time of maturity.
Who should take Term Insurance?
Most people contact an agent when they need insurance. He can also confuse you.
He advises that insurance be purchased for all family members if necessary.
It should only be purchased by the primary earner of the family. All other family members must also be covered.
How will other family members be fed if the most prominent member of the family is not there?
In such situations, it’s a good option. The money will be used to complete all family tasks.
For example, a 25-year-old man isn’t yet married and his parents are financially stable.
This is because the young man is independent and, unfortunately, there is no financial crisis for his family. Hence, this insurance is not recommended.
If both spouses are earners in a household, both should have term insurance.
Simply put, you should be the sole breadwinner of your family.
Your term insurance provides financial security for your family and protects you from financial loss to loved ones if you’re not there.
Here are some things to remember when buying a Term Insurance Plan
Your life insurance must be sufficient to cover all of your liabilities, such as loans and other financial obligations. All your future goals will be met.
Other aspects of the term plan must be addressed.
These issues may be overlooked and your claim could be denied. This will cause a major blow to your family.
There are some things you should keep in mind when purchasing term insurance
Provide accurate information about yourself
Insurance is built on trust.
Your claim will be rejected if the insurance company discovers that you provided incorrect information on the form.
A smoker shouldn’t tick the non-smoker box. There is a difference in the premium for both.
The claim will not be accepted if the claimant hides information about genetic diseases, etc.
Take a medical exam
It is an extremely valuable type of insurance.
Companies conduct medical tests in such situations.
It is possible that your claim could be at risk if a company asks for a declaration regarding your health.
The company could then make excuses to reject the claim.
Low premiums are not the only thing to consider
Opting for the lowest premium term plan could mean you miss out on some other benefits.
Sometimes, the company’s claim settlement history is not very good.
The company should consider the benefits of a policy with a low premium and its track record in claims settlement.
Pay attention to the terms of the policy
What should the policy term be? How long should it last?
This is why you should have insurance coverage in case you are removed from your primary responsibilities or until you reach the age of 60-65.
Select the best mode of premium payment
Term insurance After signing up for the plan, don’t forget to pay its premium.
Online mode such as ECS or E-mandate is available.
You can also add the premium to your bank account via net banking.
These methods will automatically deduct the premium amount from your bank and deposit it in time.