If you care for your family then go for Term Insurance Policy

: 1k To 1 Cr Blog

Term insurance policy -

Term insurance plans offer guaranteed life cover in terms of sum assured for a fixed premium for a fixed period of time. In case the policyholder dies during the term, the sum assured gets paid to the family. On surviving the term, one doesn’t get anything back as there is no ‘saving’ portion of the premium. If you have taken Term Insurance and unfortunately something happens to you then In your absence, not only does your family remains financially independent, but also is able to fulfill its future needs like a young child’s higher education.

"Term Insurance is not because you will die but because your family will live."

The premiums for Term insurance policies are the lowest among all the types of life insurance policies. The premiums are low since there is no investment component and the entire premium goes for covering the risk.

In today's world there is no point taking 5 Lakhs or 10 Lakhs Rs Life cover plans because this money will not be of much use when you are not there. Do a simple calculation and take minimum cover of 15 Times of your annual salary and keep revising it as your income increases or your liability increases like you buy a Home of 1 CR and if you have taken the loan of 80 Lakhs then make sure you have considered this as part of Insurance calculation.

For example if your salary is 20 Lakhs Per Year then have Term Insurance cover of minimum 2 CR and you can go till 3 CR.

Please note that as part of your financial planning , do not mix Insurance and Investments, both have to be dealt separately . If you start mixing one with another that means you are compromising on both.

There are many parameters that should be considered while buying a Term Insurance.

Which company - Buy from the company that will exist for next 20-30 years.

Coverage till what age - I prefer till the age of 65 because after that you don't have many liabilities but it is upto you.

Riders : I prefer to take accidental riders because accident can happen any time and accidental riders give us a bigger risk coverage.

Premium Paying Frequency: I prefer annually but it is your choice.

Policy Paying Term: Try to adjust Policy Paying Term so that you can finish paying the premium before or by 55 years of your age so that you don't have these liabilities during retirement time.

Rider Returning Premium paid at the end of coverage -- Not Preferred. Take pure term insurance.

Please note buying a good term insurance is extremely important and delaying it might be very costly to your family and dependents.

The best time to buy a term plan is when one has financial dependents. For unmarried professionals, there could still be parents around who are financially dependents. This means taking term plans early on and then as life moves on, one should keep topping up with additional coverage which could be on marriage and on birth of kids. Finally, do not merely go by the premium amount while choosing the plan. Select the insurer based on their reputation, market share, claim settlement ratio among other ..

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