Term Insurance and its Benefits
For Example, Suppose you are driving on a highway in a brand new ferrari along with singing the latest and your favourite tune beating down from your Mp3 Player and suddenly a kid tries to cross the road just ahead to you, by attempting to safe his life you try and risk your’s life by putting emergency brakes and then…bhoom.!
Pure Term insurance is knows pure risk cover’s plan. It is called risk cover plan because it helps our financial problems connected with any life threat arising to us. Term life insurance will not only reduces the risk but it also helps us our beloved one’s to overcome the financial problem which will be arise because of any particular risk like death of beneficiary.
Why Buy Term Insurance?
Everybody thinks and believes that nothing will happen to them and they will live healthy for the entire life but there is always an element of risk which always says “ What if?’ therefore the term life insurance plan is brought to concern with the word “ What If”
The purpose to buy term insurance is different from person to person but the most common benefits which make the person to buy this term insurance plan is defined is,
For a Secured Family
If you are the only sole earner for your family, then the term insurance policy is very much important for you. If in case something happens to you, the term insurance policy will take care of the your loved ones. Through out the term life insurance option, there will be no financial burden on your beloved one’s in your adsense and your family will carry on their life as they dreamed to do.
Safeguard against liabilities
During our agreement, we take many liabilities to buy our home, buying a new branded car etc. These types of liabilities are usually paid over a period of time but in case of something happens to you, these burden of repaying the liability will be your concern to pay. But if you have term life insurance, you are not concerned of repaying the liabilities. The insurance will take care of the liabilities.
Benefit for Nuclear Families
Unlikely old times, there are very less join families nowadays. These adays the only support your family has could be you. But what if something happens to you? If you didn’t buy term insurance plan then in your absense, your family may faces crucial and tough things to handle.
Term life insurance is Cheap
Very much unlikely, other life insurance products we can buy term insurance plan at a very cheap and reasonable price. For example a risk cover f rs 5 Million for a male of age 25 years would be as low as 4184 Rupees per annual, which is less than 12 Rs per day.
Term Life Insurance as Tax Benefit
Term Life insurance also gives us tax Benefits. Term Insurance policy provides you tax benefit. That’s the reason when you buy term life insurance, actually you’re saving your money.
Types of Term Insurances
- Level Term
This is the dafault setting for the term insurance plan. This one is the most common term plans that people usually go for and most of all the insurance companies offers this plan
- Decreasing Term
The Life cover of decreasing term plan slowly reduced or decreases over a period of time at a predefined rate while the premium of the plan remains constant. These types of plan are renewable on annually basis. This type of insurance plan is more economically good when compared with the rest of the other types of term insurance plans.
- Increasing Term
As it name compiles, increases the coverage over a period of time. This term is little handy because it may gets leads to inflation and would choose sum assured according up front.
- Return of premium
One the latest addition to the types of term insurances. It address the concern that many people think term insurance is just not will give profit if they remains survive. If you choose for this type of return of premium, the company will refund your entire amount that you have paid as premium
- Death Benefit
In the unfortunate or undue event, the person nominised by the holder will receive the sum assured as per policy documents
How much term life insurance cover do I need?
The General Rule says that a person should buy and choose term insurance cover which will be 8times the annual income for example today, If I earn 1 million per annum so then the amount of term insruance will cover should be 8 millions.