TERM INSURANCE
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Clarify All Doubts Related Term Insurance
Term insurance is a pure risk product. It provides specific amount of coverage for a specific period of time. It is the cheapest form of life insurance. In case of death of the policyholder, the nominee gets the sum assured. However, in case if policyholder survives the policy tenure, there is no maturity or survival benefit. In other words, in case of insured surviving the policy term, he will have to forgo the entire premium. Term insurance provides very high coverage at very low price.
It is a contract between Life Insurance Company and one or more persons called the policyholders, where the insurance company promises to pay some pre-specified death benefit or any monetary benefit in case of death of the insured person and the policyholder agrees to pay an amount or a series of amount.
It provides only life cover with the lowest premium comparative to other types of life insurance products. It's a contract to pay a death benefit on death of the insured if death occurs within a specified period which is called the term of the contract.
The term insurance plan is the most economical way to insure the most important years of your life. In exchange of the affordable premium, you are able to access death benefit and some insurance companies also provide the option of additional death benefit, which is paid in case of accidental death only. Moreover, you can avail tax exemptions on the premium paid.
While buying Life insurance plan, basically you are intending to cover the important years of your life, i.e., when you are earning. You should choose the number of years, which when added to your present age would result in the number of years when you would be retired or not be earning.
Generally, the age eligibility criteria to acquire term insurance ranges from 18 to 65 years. While the maturity age is maximum 75 years. The age-range to enter and exit such plan can vary from insurer to insurer. While you choose the term of the policy, you need to consider your age and the maturity age till what you can avail the term insurance and decide accordingly. For instance, you are 30 years old, while the exit year is 75, so the term of the policy can go up to (75-30) 45 years in your individual case. Now it depends on your choice of the number of years you choose for the coverage.
The term insurance riders are the provisions of benefits that you can attach to your basic term insurance policy. Basic term coverage may not fulfill your each and every life insurance need and you might feel the requirement to augment your coverage. Riders act as the coverage enhancers and you are charged to avail various term insurance riders which can be profitable in the longer stretch of life.
Yes, medical test is mandatory before acquiring the term plan. However, some online term plans do not ask for the medical tests and you might have to pay a higher premium for that coverage.
The sum insured for an individual differs from the other insured person and depends largely upon the basic necessities expenses of his dependants. To determine the sum insured, you should be adding the daily expenditure of your family which includes routine expenses like educational costs and grocery bills and multiply the same with the number of years you want coverage for. Add your outstanding mortgage bills, taxes, repayment of loans, final burial expenses as well as the capital amount that your family will need to have another source of earning.
While determining the premium amount of your term plan, the insurance company takes into account:
- Your age decides whether you are eligible for investing in insurance sector or not, because you need to be financially secure to invest at the first place.
- Your health status is also another consideration which is taken into account, as the risk of cardiac problems and other diseases is much in people with addictives habits.
- Your gender is also mostly looked upon to analyze the better imprint of the insured; this can be helpful in the future.
- Your hobbies can also reflect in understanding the right investment plan as per your lifestyle and living standard.
- Whether you are a smoker or non-smoker insurance covers both but it's important to understand the habits of the insured for better investment understanding.
You get pure life coverage under a price that is the lowest when compared to other life insurance products. That means higher coverage at the lowest premium. Advantages of buying term insurance plan are:
- Simplicity in the investment market which maximizes the profit and minimizes the complexity of investments.
- Pure life protection ensuring financial safeguarding of you and your family in case any unprecedented event takes place.
- Right to choose the duration of the policy is one of the most salient features of the Insurance sector. Indeed it is to be used as per preference.
- Can be utilized to pay mortgages and debts in future if financial downfall creates havoc in the financial stability of the family.
The term insurance riders are the provisions of benefits that you can attach to your basic term insurance policy. Basic term coverage may not fulfill your each and every life insurance need and you might feel the requirement to augment your coverage. Riders act as the coverage enhancers and you are charged to avail various term insurance riders which can be profitable in the longer stretch of life.
There are numerous advantages when you buy term insurance policy online. The significant one is the lower rate of premium. Next, the insured is able to avail the coverage immediately after paying the premium amount online, if no medical test is required. In case medical test is the pre-requisite, the applicant has to clear the following medical tests to avail the coverage. Once the legal formalities are fulfilled, the insured is able to pay the premiums through online mode and save his insurance documents on the online platform provided by the insurance company.
IRDA publishes an annual report which shows the detailed status of claims of every insurance company.
No, you will not face any problem just because you purchased the plan online. Every insurance company has a centralised customer service team which attends to all the customer query/complaints. They do not differentiate between customers who have purchased online or offline. The Claims Management division of the insurance company processes the claim without questioning where was the policy purchased from.
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