Yashish Dahiya
Consider this you are driving on a highway in your brand new car singing along the latest tune beating down from your car's radio and suddenly you see a person trying to cross the road just ahead of you, in a attempt to save his life you try and risk your life by putting on sudden breaks. And then......
Term insurance is known as a pure risk cover plan. A, risk cover plan because it helps you mitigate the financial problems associated with any life arising to you, and not only it mitigates the risk but it also helps your loved ones to overcome that financial trauma which has arisen because of that particular risk.
The risk cover commonly known as Sum Assured, which is pre determined amount of money which is paid to the designated nominee on demise of life assured. The risk cover lasts till the end of policy period which could be as long as 35 years.
Why Buy Term Insurance?
Everybody believes nothing can happen to them, but there is always that element of concern or risk which prevails that, 'What If?' The term Insurance is specifically bought to cover this concern of 'What If?' and all the financial trauma arising out of that risk.
The need to buy Term insurance could be differentiated from a person to person, but the most common benefits which influence an individual to buy a Term Insurance plan could be defined as:
a. For a Secured family: If you are the sole bread earner of your family, term life insurance is must for you. In case something happens to you, the term life insurance policy will pay the cover to your loved ones. There would be no financial burden in your absence and your family could carry on their lifestyle.
b. Safeguard against liabilities: During our lives we take on a lot of liabilities to buy our home, buy a brand new car, etc. Many of these liabilities are usually paid over a period of time and in-case something happens to you the burden to repay these responsibilities comes directly on your family. A term life insurance arms your dependents to manage aforesaid financial problems.
c. Nuclear Families: Unlike old times, there are far less joint families. These days, the only support system to your family could be you. In your absence, circumstances could get very tough to handle. Term life insurance deals with any financial repercussions in your absence.
d. It's Cheap: Unlike any other life insurance product a term insurance plan can be bought very cheaply, e.g., a risk cover of Rs. 50 Lakhs for a Male age 25yrs could be as low as Rs. 4184 annually, i.e., less than Rs. 12per day
e. Tax Benefits: A term insurance policy provides you Tax benefits u/s 80C & u/s 10(10D) of the Income Tax Act.
How much life cover do I need?
The general Thumb rule says a person should have life cover which is 8 times the annual income, i.e., if I today earn Rs. 5Lacs per annum then the amount of Term Cover chosen should be around 40 Lacs.
Many term Insurance plans also offer you a possibility to increase your sum assured to an X% year on year, thus keeping you adequately insured. In order to calculate a more accurate value you can log on to www.policybazaar.com and check your exact term insurance cover requirement.
When is the right time to buy Term Insurance?
Generally speaking, the best time to buy term insurance would be when you are young and in good health. As the premium amount for a term cover policy when bought early in life would be half of what the same life insurance policy premium 10 years later.
This is for a simple reason- as you grow older, the likelihood for mortality increases. For example, a 23 year old is considered less likely to die than a 65 year old.
This leads to a simple question, is Term insurance for youngsters only? The simple answer to the same would be No, even though the premiums which go up marginally as you grow a little older so do your responsibilities. As you grow old you, Obtain a new mortgage, Get married and have children, acquire additional liabilities like Home and Car Loans. Hence, it is all the more important that you always keep yourself adequately insured, for which Term Insurance is the most preferred solution.
Recent Trends in Term Insurance
Term Insurance prices have almost been reduced to twice the amount, of what they were in the year 2009. Taking an example, in the year 2009, the cost of Term Insurance for a male of age 30 years would have costed him Rs. 11,800 for a Sum Assured of Rs. 50 Lacs and term of 15 years. Taking the same example and putting it in the current scenario (Year 2011), his today's Term Insurance Premium would be Rs. 4,363.
Hence a maximum number for online searches for Term Insurance on www.policybazaar.com are for Sum Assured Rs. 50 Lacs and above. Which can be validated by a simple trend chart as depicted below:
Hence a key take out Customers who are continuing their old policies are paying much more. One can today immediately switch their Term Insurance Policy as there is no bounding of any Surrender Value or Maturity Value.
How can you buy Term Insurance?
Buying a term insurance plan on www.policybazaar.com is a simple 4 step process
Step 1 --- Enter your Name, Age, Choice of Sum Assured and a few other simple details to help us generate a premium quotation for you
Step 2 --- Chose the best product option for you, from the options provided by us.
Step 3 --- Click on Buy Now to complete the Proposal Form for the chosen insurer and product.
Step 4 --- Use your Credit / Debit Card to pay the premium and complete your transaction.
It is our strong belief that term life insurance is exceptionally important thing which should be bought as soon as one starts earning rather than waiting till later stage. Term life insurance plans are very cheap and available online with many insurers. Buying online is hassle free process and very fast.
Get started with term life insurance, on www.policybazaar.com
Yashish Dahiya, CEO, Policybazaar.com
View the original article here
No hay comentarios:
Publicar un comentario