Term Insurance As we know that this is the form of life insurance. By this your family gets financial protection. Whose nominee gets the entire amount during the death of the insured person.
Generally people think of term insurance as general insurance. While there is a fundamental difference between these two.
Through today’s article, you will be given detailed information about what is term insurance, when and how to take it, and what are its benefits?
What Is Term Insurance
Term insurance is the most effective and simplest option to take life insurance.
Term insurance is also a type of life insurance, which provides financial protection cover for a certain period or for a specific ‘term’.
It provides financial security to the family of the insured in the absence of the insured.
Term insurance plan is the purest form of insurance policy.
In this, the person taking the insurance keeps paying the premium for a specified period.
If the insured dies during this stipulated period, the sum assured or the sum assured is paid to his/her nominee.
If even after the expiry of this period the insured remains healthy and does not die; So nothing is received in return for the premium paid.
Important Points Of Term Insurance
It can be taken by any person from minimum 18 years to maximum 65 years.
It is the freedom to choose. You can choose it singly or jointly as per your convenience.
In this, the option of paying premium is available.
You can choose to do this as a lump sum or at regular intervals like monthly, half-yearly or yearly.
Its premium amount depends on the age of the insured and the amount of insurance taken by him.
term insurance(Term Insurance) how much should be taken
It is advisable to take term insurance for an amount of 20 times the annual income of an individual.
For example, the annual income of a person is ₹ 5 lakh; So he should get term insurance of 500000 X 20 i.e. total 1 crore.
At what age to buy term insurance
Term Insurance The ideal age to buy is considered to be 30 years.
By this age, responsibilities start coming on any person. becomes a source of income for him; His financial condition gets better.
By that time they are planning to build a family or buy a house.
As you get older, the insurance premium also goes down.
As people age, their health starts deteriorating. In this case, the risk of the insurance company increases; And with increasing age the premium also increases.
The most important thing about term insurance is that its premium remains the same from beginning to end.
Hence, the sooner you take insurance, the lower will be your premium.
You can know your premium with the help of Term Insurance Calculator.
Benefits Of Term Insurance
There are some benefits that differentiate term insurance from general insurance-
1- The option of getting the sum assured as monthly income is available with the nominee of the insured.
2- There is facility to take joint policy in this, husband and wife can take term insurance jointly.
3- There is a facility to create more than one nominee in term insurance; In this, the sum insured can be divided as a percentage among all the nominees.
4- Benefit of accident cover, facility of critical illness cover and facility of terminal illness cover can be added as a rider.
These riders are low priced but very important ones which are included with the term plan itself.
5- There are also plans with premium refund facility, in which the principal deposited by you is returned at the end of maturity.
Who Should Take Term Insurance
Generally people consult an agent to get insurance; And he can confuse you about this.
If it is necessary to have insurance for all your family members, he advises as follows; So that’s not correct.
Term insurance should be taken by only the person who is the main earner in the family and the rest of the family members are dependent on him.
In the absence of the most prominent person in the family, how will the other members of the family be fed?
In such a situation Term Insurance The money received from this will help in completing all the necessary tasks of the family.
for example- Some 25 year old young man who is not married yet and his parents are also in good financial condition.
In such a situation, because there is no dependent on that young man and unfortunately even if he is not there, no financial crisis is going to come on the family; That’s why term insurance is not recommended for that young man.
Similarly, if both husband and wife are the earners in a family, then both the people should take term insurance jointly.
Simply put, if you are the sole breadwinner in your family;
So your term insurance protects you against financial loss to family members if you are unfortunately not there; and provides financial security to the family.
What to keep in mind while buying Term Insurance Plan
Your life cover must be big enough that in your absence all your liabilities like loans etc. and all future goals are met.
There are some other aspects of the term plan which need to be taken care of.
If these are not taken care of, then your claim may get rejected and it will prove to be another big blow to your family.
Some things that must be kept in mind while taking term insurance-
Give accurate information about yourself
Trust is the basis of insurance.
If the insurance company finds that you have given incorrect information in the form, it will reject your claim.
For example, a smoker should not tick the non-smoker category; Because there is some difference in the premium of both.
Similarly, even if you hide the information about genetic diseases etc., the claim is not received.
Do a medical test
Term insurance is a very high value insurance cover.
In such a situation, in general, companies conduct medical tests.
If a company only asks you to fill out a declaration about your health, it is possible that your claim may be in jeopardy.
Because then the company can get excuses for rejecting the claim.
Don’t just look at low premiums
You may miss out on other benefits by opting for a term plan with the cheapest premium.
It may also happen that the claim settlement history of that company is very bad.
In such a situation, instead of low premium, the company should choose a policy after looking at the company’s good record of claim settlement and other facilities like accident insurance, critical illness etc.
Be sure to pay attention to the term of the policy
How many days should be the policy term or till what age should it be.
In response to this, it can be said that you must take an insurance cover when you are relieved of your main responsibilities, or in general till the age of 60-65 years.
Choose the right mode of premium payment
Term Insurance After taking the plan, try not to miss out on paying its premium.
For this, the option of online mode like ECS or e-mandate can be opted.
Or the premium can be added to the biller of your bank account through net banking.
With these methods, the premium amount will automatically be deducted from your bank and deposited in time.
