Choosing the right term insurance plan is crucial for ensuring the financial security of your loved ones. With numerous options available in the market, it's essential to understand the key factors that can help you make an informed decision.
Term Insurance
A pure life insurance product, term insurance Provides financial security for a specified term to the family of the policy-holder, in case of their untimely demise. Unlike other life insurance products, term insurance does not offer any maturity benefits if the policyholder survives the policy term. This makes term insurance plans relatively more affordable and accessible. With the most important term insurance benefit possibly being the death benefit, its simple design makes it quite lucrative for a range of customers.
How Does A Term Insurance Policy Work
Let’s understand how term insurance coverage works, with a simple example.
Suppose a policyholder who is 35 years of age chooses to buy a term plan with a sum assured of ₹2 crore, for a policy term of 30 years. Therefore, they become eligible for term insurance coverage until the age of 65.
The policyholder can choose to pay the premium annually, half yearly, quarterly, or monthly. It can also be paid in a single instalment when buying the plan. A term insurance calculator is used to estimate the premium for different coverage amounts, premium payment frequencies, and policy terms based on various factors like age of life assured, desired coverage amount, policy term, annual income, savings, annual expenses & liabilities.
In the years to come, the policyholder gets married. Their family goes on to include two beautiful children too. The policyholder’s spouse is appointed as the nominee of the purchased policy.
Unfortunately, at the age of 55, without warning, the policyholder passes away, and a family is left with no steady source of income. To deal with this financial crisis, the nominee i.e., the spouse of life assured can claim for a death benefit which is equal to sum assured under the plan. Thus, term insurance will provide financial security for future of the family.
Selecting the right term insurance plan involves evaluating your financial needs, understanding the policy features, and comparing different plans. Ensure that the plan you choose provides adequate coverage, is affordable, and includes essential riders to enhance your protection. By tools like a term insurance calculator, you can make an informed decision that secures your family's future.
Disclaimer:
Tax exemptions are as per applicable tax laws from time to time. Bonus rate may vary from time to time based on Company’s Investment Performance.
The aforesaid article presents the view of an independent writer who is an expert on financial and insurance matters. IndiaFirst Life Insurance Co. Ltd. doesn’t influence or support views of the writer of the article in any way. The article is informative in nature and IndiaFirst Life and/ or the writer of the article shall not be responsible for any direct/ indirect loss or liability or medical complications incurred by the reader for taking any decisions based on the contents and information given in article. Please consult your financial advisor/ insurance advisor/ health advisor before making any decision.
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IndiaFirst Life Insurance Company Limited, IRDAI Regn No.143, CIN: U66010MH2008PLC183679, Address: 12th & 13th floor, North Tower, Building 4, Nesco IT Park, Nesco Centre, Western Express Highway, Goregaon (East), Mumbai – 400 063. Toll free No – 18002098700. Email id: customer.first@indiafirstlife.com, Website: www.indiafirstlife.com. Fax No.: +912268570600. IndiaFirst Life Insurance Company Limited is only the name of the Life Insurance Company and does not in any way indicate the quality of the contract, its future prospects, or returns. For more details on risk factors and terms and conditions, please read the sales brochure carefully before concluding the sale. Trade logo displayed above belongs to our promoter M/s Bank of Baroda and is used by IndiaFirst Life Insurance Co. Ltd under License.
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