Term Insurance

In today’s scenario where life is full of stress & uncertainties, it is important that your loved ones enjoy a good quality of life against any unfortunate event. Life insurance acts as a long term investment and provides financial support to your family in case of uncertain death. It is important to invest small part of your income in Life Insurance. Term plans are typically affordable insurance plans that provide full protection and financial stability to your family in case of any uncertain events. Today, there are a number of insurance plans floating in the market, because the priorities of different insurance buyers are different. Term Plan is the most basic, yet, most important insurance for every individual who has a family.

Benefits of Term Insurance

Benefits of Term Insurance, in totality, are in terms of financial security to your loved one after the death of policyholder. Here are some of the major benefits of Term Insurance Policy: *Loans Repayment And Debt Handling
During the course of life if the policyholder has taken any loans or debts and due to some unpredictable situation if the policyholder dies. Then, the Term Insurance lump-sum amount will be useful to clear the loans or debts. Also, the family can focus on rebuilding their life without any liability stress on their head.
*It Is the Most Efficient Insurance Plan
Even though Term Plan comes with so many benefits and gives absolute financial security to the family of policyholder. Also, anyone can afford term insurance as the premium is low compare to regular plans. If one buys the term insurance at a young age, the premium payments are substantially low with maximum cover.
*In Case of Disability provides Income Stability
In case the policyholder is disabled due to an accident or a critical illness and there is a loss of income. Then, the term plan will help to provide a supplementary income to the family to run a smooth and healthy life.
*Maintain The Daily Life of Family:
If the policyholder dies due to uncertain event and he is the only earning member of the family, then after his death, the sum assured amount is paid to the nominee or to the family member to sustain the daily life without facing any financial challenges.
*Policyholder Gets The Tax Benefits
The premium payments for your term insurance attract tax exemptions under section 80C of the Income Tax Act and also the lump-sum amount received in case of death is a tax-free income.
*Life Expenses Are Taken Care Of
In case of policy holder death or uncertain situation the term insurance lump-sum amount received by nominee will take care of important life expenses like quality education, marriage etc

Top Factors That Affect Life Insurance Premiums

*Your Current Health
Generally, you have to go through a medical exam to look for things like high blood pressure or other health concerns that might be a sign of future problems. Often, people with health issue or obesity buy term insurance at slightly higher rates.
*Your Age
If you buy term insurance at younger age than the premium is often less compare to higher age. Even, experts often recommend buying a policy at young age.
*Your Health History
If you have a history of any kind of chronic disease or other ongoing health issues, than you pay premium at higher rate.
*Your Occupation
If your job is bit risky than it may result in increase of premium rate or even denial of coverage because they carry such a heavy risk accidental death.
Smokers pay more for life insurance simply because of the many health risks inherent in the habit. If you quit smoking, you can qualify for lower rates.
Heavy alcohol consumption can also take a major toll on your health. Those who drink more are likely to pay more for their insurance rates.
*Your Weight
If you are overweight or obese based on a height to weight ratio scale, you may pay more for your life insurance coverage.


*How much cover should I buy?
There is no strict mathematical formula calculate cover as it depend from person to person based on his responsibilities, liabilities, family and lifestyle. But, your cover should be based on your Human Life Value and in case of uncertain situations your family must get lump-sum amount to be financially independent. For example, if your family is dependent on you for 50000 per month and you have home loan of 50 lacs, you should take cover of 50 lacs (loan) + 50000*12*10=50 lacs. Hence, buy a term plan of 1 crore which will cover your loans and expenses of the family.
*How else does life insurance help?
Premiums paid under a life insurance policy are eligible for deduction under Section 80C* of the Income Tax Act. The policyholder will get tax benefits under 80C*.
*What is Term Rider Insurance?
A rider is an add-on provision to a basic insurance policy that provides additional benefits to the policyholder at an additional cost.
*Will my premium amount change during the tenure of the policy?
The premium amount stays same throughout the policy term. But premium may depends on the tax regulation declared by the Government of India.
*Can I change the duration of life cover after the policy is issued to me?
The duration of life cover cannot be changed once the policy is issued.
*What is the right time to buy Term Plan?
Earlier you begin the cheaper it costs but there is nothing called wrong time to safeguard your loved ones. You can buy term plan or term insurance any time to protect your family from uncertain situation.
*What if I want to surrender my policy during the policy tenure?
If you surrender your policy during the policy term, you remain at a loss! This is a term insurance plan. You won’t gain benefits if you surrender your policy.
*What is Claim Settlement ratio? Where can I find it?
The ultimate success of Term Plan is easy claim settlement. Which means Claim Settlement Ratio and period required to settle the claims should be more important criteria than saving few hundred on premium.
In India, the Insurance Regulatory and Development Authority (IRDA) publishes an annual report which gives a detailed claim ratio analysis and the claim status of different companies.

"Successful Investing takes time, discipline and patience. No matter how great the talent or effort, some things just take time: You can’t produce a baby in one month by getting nine women pregnant."

By Warren Buffett

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Disclaimer: Insurance is the subject matter of solicitation. Mutual fund investments are subject to market risks. Please read all the scheme related documents carefully before investing.