Life is unpredictable and you can not predict what the future holds. To make sure your loved ones are financially secure when you are not there, you can invest in a term life insurance plan.
A long-term plan helps you make preparations for these types of uncertainties. The purchase of a term insurance plan helps you mitigate risk because it requires lower premiums, but it transfers the full amount of the term plan to your beneficiary.
If you survive the term of the policy, the term plan will not pay any survivor benefits or benefits at the end of the term. In the recent past, insurers have introduced a benefit that in the event of survival, the insurance company will reimburse a specific portion of the total premium paid by them.
Things to keep in mind
You have to keep some things in mind before buying a life insurance policy. They are:
- The term "diet" must be able to provide a sufficient income if the breadwinner dies.
- The term of office of the policy should cover the period of time that the individual intends to work. A long-term plan must cover at least 65 years.
Why You Should Buy a Term Insurance Plan
Here are the reasons why you must buy a term insurance plan:
- Lower premiums
- Provides financial protection
- Rejection of low claim
Let's talk about each one.
As no investment item is involved in the amount insured, the insured must pay lower premiums for all term plans compared to other insurance plans. Many of you may have made payments of about one percent of your annual income, to buy a life cover for you and your loved ones. For example, you must pay a premium of only Rs 7,500 (approximately) – equal to 115 USD – per year for a policy with a guaranteed sum of Rs. 1 crore – equal to USD 155,000.
Provides financial protection
An accidental disappearance is disastrous; just like your financial debts. Responsibilities that your family and your loved ones will have to bear. In order to avoid getting into such circumstances, it is best to make an investment in a term insurance plan. A futures plan would pay attention to your financial needs and those of your family.
One of the main advantages of a term insurance plan is flexibility. You can choose any offline or online plan for which a health plan is not required. You have an option to customize your plan and modify your duration plan according to your needs.
The premium allocation fee contains brokerage fees and this expense is a recurring expense. Each time you make the payment of the premium, a certain percentage is deducted as a brokerage fee, but decreases gradually. Brokerage costs are only about 5-6%, approximately. If you buy a term insurance plan online, you do not have any brokerage fees to pay.
The additional benefits that accompany a term insurance plan to meet your needs are called riders. You must pay a nominal fee for the runners and they should be purchased if you find a special need for them. Some of the most popular examples of runners that subscribers buy are death due to accidents, serious illnesses, permanent or partial damage, and so on. You must buy an endorsement only if you really need it and you must study the documents for all exclusions carefully before you buy them.
Rejection of low claim
By purchasing a term insurance plan, you must make sure to disclose the correct facts about your health, your habits and finances, and so on. According to the Insurance Regulatory and Development Authority (IRDA), no insurer or insurance company can claim non-disclosure of the facts after two years of the policy.