What if you could go on a family vacation without worrying about anything?

What if you could enjoy the beauty of nature, the thrill of adventure, and the joy of spending time with your loved ones, knowing that they are always protected?

That’s the power of term insurance. Term insurance is a life insurance policy that covers you for a specific period of time.  If something happens to you during that time, your family will receive a large sum of money to take care of their needs and wants. Whether it’s paying for the house, food, medical bills, or education, or fulfilling their dreams and aspirations, your family will have the financial security they need.

Term insurance is like a safety net that you create to make sure your family is taken care of, even if you are not there. It is a way of showing your love and care for them, even after you are gone.

Exclusions: Generally, suicide within one year, death due to criminal activities, illegal activities.

Affordable Protection: Term insurance is budget-friendly, offering a straightforward way to protect your family without breaking the bank.

Financial Security: It provides a lump sum payment (death benefit) to your loved ones if you pass away during the policy term, helping them with living expenses and financial needs.

Flexible Coverage: You can choose the coverage amount based on your family’s needs, ensuring the policy fits your specific situation.

Peace of Mind: Term insurance provides reassurance, knowing your family is financially protected if the unexpected happens.

Tax Benefit: Premiums paid are exempted from tax under section 80C.

The ideal time to buy term insurance is typically when you’re young, healthy, and have dependents or financial responsibilities. Here are some key considerations:

Young Age: Purchase term insurance early in life when premiums are lower. This allows you to lock in affordable rates for the duration of the policy.

Health Considerations: Buy term insurance while you’re in good health. Health conditions can increase premiums or make it challenging to get coverage later on.

Dependents: If you have dependents, such as a spouse, children, or aging parents, it’s a good time to consider term insurance. The coverage ensures financial protection for your loved ones in case of your unexpected absence.

Major Life Events: Purchase term insurance when experiencing major life events, such as getting married, starting a family, or buying a home. These milestones often come with increased financial responsibilities.

Debt Acquisition: If you take on significant debts, like a mortgage or educational loans, consider purchasing term insurance to ensure that your loved ones aren’t burdened with financial obligations if something happens to you.

Career Changes: When your income increases due to career advancements, it’s a good time to reassess your insurance needs. Term insurance can help protect your loved ones against the higher financial stakes.

Financial Planning: Term insurance is a foundational element to secure your family’s financial future, providing peace of mind for you and your loved ones.

In summary, the best time to buy term insurance is when you’re young, healthy, and experiencing significant life events or financial changes. It’s a proactive step to ensure financial security for your loved ones in the face of life’s uncertainties.

When buying term insurance, consider the following key factors to ensure you make an informed decision:

Choosing the right Sum Assured:

Deciding the right cover amount for term insurance depends on various factors, such as your income, expenses, liabilities, future goals, and family size. There are different methods to calculate the optimal cover amount, such as:

• Thumb rule: This is a simple and quick way of estimating the cover amount. It suggests that you should have a cover of at least 10 to 15 times your annual income. For example, if your annual income is ₹10 lakh, you should have a cover of ₹1 crore to ₹1.5 crore.
• Income replacement: This method is based on the assumption that your family will need a regular income to sustain their lifestyle in case of your demise. It calculates the cover amount by multiplying your current annual income by the number of years left for your retirement. For example, if your annual income is ₹10 lakh and you have 20 years left for retirement, you should have a cover of ₹2 crore.
• Need-based analysis: This method is based on the specific needs and goals of your family, such as education, marriage, home loan, etc. It calculates the cover amount by adding up the present value of all these needs and subtracting your existing assets and savings. For example, if your family needs ₹50 lakh for education, ₹30 lakh for marriage, ₹40 lakh for home loan, and you have ₹20 lakh in savings, you should have a cover of ₹1 crore.

You can use any of these methods to decide the right cover amount for term insurance, or you can use a combination of them. You can use our calculator to find out how much insurance you need by clicking here. The important thing is to have a cover that is sufficient enough to protect your family’s financial future in case of any unforeseen event.

Choosing the right Policy Term:

The term insurance duration should be between 60 to 70 years because:

• It covers you until your retirement age, when you will not have an active income to replace in case of your demise. Most people retire between 60 to 65 years, so having a term insurance duration beyond that is not necessary.
• Your family’s financial needs and goals will be accomplished by then. For example, if you have children their education, marriage, and other expenses, which will be mostly completed by the time you are 60 to 70 years old.
• It covers your liabilities, such as loans, which will be repaid by the time you are 60 to 70 years old. 
• It is more affordable and cost-effective than having a longer-term insurance duration. If you take for longer duration the premium rates will be higher. Having a term insurance duration between 60 to 70 years will help you save money and get adequate coverage.

Health Assessment: Be honest and thorough when providing your health information during the application process. Health conditions can impact premiums, and providing accurate information ensures a smooth claims process.

Riders and Add-ons: Explore optional riders or add-ons that can enhance your coverage, such as critical illness riders or disability riders. These can provide additional financial protection in specific situations. We will discuss riders in detail in next section.

Claim Settlement Ratio: Research the insurer’s claim settlement ratio. A higher ratio indicates the company’s reliability in settling claims, ensuring that your beneficiaries will receive the death benefit when needed.

Company Reliability: Choose a reputable insurance company with a track record of financial stability and customer satisfaction. Research customer reviews and ratings to observe the company’s reliability.

Compare Quotes: Obtain quotes from multiple insurers to compare coverage options, premiums, and features. This helps you find the best value for your specific needs.

Riders in term insurance are additional features that you can add to your basic term insurance policy to enhance coverage. You have to personally consider what rider will be beneficial for you. The conditions might vary from insurer to insurer, make sure you check the policy document for what is covered with your insurer.

Critical Illness Rider:

What it does:  the insured receives a lump-sum payment of the sum assured when you are diagnosed with a critical illness already specified in the policy.

Purpose: Helps cover medical expenses and other financial needs during a critical illness.

Nuances: On diagnosis of critical illness, the person needs to survive for (generally 30 days) to be eligible for this benefit. There is also a waiting period (generally 90 days) before it comes into effect.

Disability Rider:

What it does: Provides a lump sum payment if you are diagnosed with permanent disability

Purpose: Helps cover medical expenses and other financial needs during a disability.

Nuances: It means the insured person is either unable to work or is physically impaired (loss of both limbs, loss of sight of both eyes etc.) The disabilities continue without interruption for six months period & must be deemed permanent via medical practitioner

Accidental Death Benefit Rider:

What it does: Pays an additional benefit if the insured’s death is the result of an accident.

Purpose: Provides extra financial support for the family in the case of accidental death.

Nuances: Additional payout on death due to an accident. Base life cover also gets paid out. Recommended for people who travel regularly

Waiver of Premium Rider:

What it does: Waives future premiums if the policyholder becomes disabled or seriously ill, ensuring the policy stays in force.

Purpose: Prevents financial strain on the policyholder in case of a disability.

Accelerated Death Benefit Rider:

What it does: Allows the policyholder to receive a portion of the death benefit if diagnosed with a terminal illness, helping cover medical expenses.

Purpose: Provides financial support for medical costs and other end-of-life expenses.

Return of Premium Rider:

What it does: Returns the total premiums paid over the term if the policyholder survives the term.

Purpose: Acts as a savings component, providing a refund if the policyholder outlives the policy.

It’s important to carefully review and understand each rider’s terms, conditions, and costs before adding them to your term insurance policy. Not all riders may be necessary for every individual, so consider your specific needs and financial situation when choosing riders.

TERM LIFE INSURANCE

If you are looking to buy term insurance, call us at 96909-18554 / 87922-23133 or click here: https://wa.me/919690918554

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