Secure Your Family with Term Insurance

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Secure Your Family with Term Insurance
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• Term
  insurance is the best form of life insurance as
  it gives a very high cover at a very low price.
  The premium of a term insurance plan is a
  fraction of what you have to shell out for an
  endowment plan, a money back policy or a
  unit-linked insurance plan (ULIP) for the same
  coverage. This is because there is no investment
  component in a term insurance plan and entire
  premium goes for covering the risk. So if the
  policyholder dies during the insured term, the
  death benefit is paid to the nominee. There is no
  survival or maturity benefit once the policy term
  expires.

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• Term plans are specifically designed to secure
  your family needs in case of death or
  uncertainty.
• There are two common mistakes when it comes to
  buying life insurance. Firstly, people dont act
  at the right time and secondly when they realize
  their mistake, they buy too much insurance.
• It is always advisable that as soon as you start
  earning you must start your insurance planning by
  buying term insurance plan. You must buy term
  insurance as early as possible as you can lock it
  at cheaper price. The early you buy a term
  insurance plan, the cheaper it is.
• You must neither be over insured nor under
  insured. If the life cover is inadequate, it
  defeats the whole purpose of insurance and if you
  take too much insurance then it becomes the
  matter of affordability.

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• While deciding how much cover you need, you must
  take into consideration certain things such as
  the basic expenditure that your family will incur
  major expenses like marriage of children and
  other liabilities like loans. You must reassess
  your life insurance needs after each important
  milestone in your life. Failing to upgrade your
  life insurance cover over time could mean that
  something unfortunate happens to you your family
  may not have enough funds to pay for the childs
  education, the home loan EMI and other household
  expenses. Hence, it is important to upgrade your
  sum assured to cover the additional costs. It is
  particularly important to be able to provide debt
  cover when borrowings increase.
• The tenure of a term insurance plan is almost as
  important as the amount of cover. Ideally, an
  insurance policy should cover person till the age
  he intends to work.
• You can also buy more than one term insurance
  plan. You can configure tenures of your term
  insurance plans in a way that they match your
  financial goals. Whenever a financial goal is
  achieved, the corresponding term plan terminates.

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• While deciding on how much life cover you need,
  remember to factor in inflation. The amount that
  you think sufficient now may not be sufficient
  after few years. For this, some companies offer
  plans where the cover increases by certain
  percentage every year. As your sum assured would
  automatically increase in the coming years, it
  would take care of increase in your income as
  well as inflation.
• In these policies, the cover increases with time
  to hedge against inflation. One doesnt need to
  buy more insurance later in life as
  responsibilities grow.

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• Online term insurance plans is the best way to
  buy a term insurance plan. Online term plans are
  roughly 30-40 cheaper than offline policies.
  This is because there is no intermediary and the
  online buyer is perceived as low risk customer.
• Premium paid for term insurance policies are
  exempted from tax under Section 80C of Income Tax
  Act, 1961. The claim amount received by the
  nominees is tax-free under Section 10 (10D) of
  Income Tax Act.
• There is no monetary value for peace of mind. For
  everything else, do take a term insurance plan.

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