Why Do We Need Term Life Insurance?

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What is Term Life Insurance?

As the name suggests, Term Life Insurance is a Life Insurance that guarantees a stated death benefit if the covered person dies during a specified term. It is simple, highly affordable, and the term period can be fixed as per one’s need.

Why do we need it?

Term Life Insurance could provide instant support to the family

· Help your loved ones pay for the living expenses, like rent or a mortgage.

· Take care of debts that you might leave behind.

· Take care of your children’s education costs.

· Help you leave behind an inheritance.

Features:

To understand our Term Life Insurance better, let us check out its features:

· It provides financial security for your family at a very reasonable price. Suppose you are a 30-year-old non-smoker or smoker; you can buy term insurance of Rs 1 crore for merely approx. Rs. 900 and 1300 per month, respectively

· The term length of the insurance can be decided at one’s convenience. The shortest is five years, and the highest being until the Insured reaches the age of 85.

· The premium can be paid monthly, half-yearly or yearly, as per the Insured’s convenience.

· One can add additional riders, like Accidental death benefit, Accelerated Critical Illness Benefits etc.

· In case of sudden death within the term length, the beneficiary or beneficiaries would receive a death benefit.

· When it comes to the death benefit, the insured can choose between three options:

(a) Lump sum: The entire amount can be paid as a lump sum.

(b) Fixed monthly plan: Where 10% of Sum Assured will be paid annually for ten years in equated monthly instalments,

(c)Lump sum and Fixed Monthly Plan: A percentage of the sum assured will be paid out as Lumpsum, and the remaining sum will be paid in monthly instalments.

(d) Increasing monthly income plan: Death benefits will be paid out in monthly instalments at an increasing income basis

· When the term length is over, the life insurance coverage ends.

Advantages of Term Life Insurance:

Term life insurance plays a vital role in securing your loved ones’ future when you are not around. It comes with a lot of benefits:

· It is straightforward and easy to understand.

· You get to live in peace and provide financial security to your loved ones at a very affordable price.

· Freedom to customize the term length that matches the timeframe of your financial responsibilities. For example, until the children are fully independent, or you have no other financial obligations left.

· Insured get a tax benefit of under:

Section 80C: Here, they can claim a tax deduction of up to Rs 1.5 lakh.

Section 80D: This section applies to health-related coverage like critical illness riders. One can claim deductions up to Rs 25,000 on the premium paid.

Section 10 (10D): Under this section, the entire death benefit payout is exempted from taxes.

· One can add cover for accidental death up to Rs. 10 lakhs

· Waiver of premium on permanent disability due to accident

Disadvantages of Term Life Insurance

· If the insured outlives the term plan, no benefit is received. One needs to keep in mind that term life insurance is an affordable way of securing your loved ones’ future during those pivotal years if something unfortunate happens.

· Term life insurance does not enable wealth creation – But you invest your money in it for the same reason you invest in car insurance. But car insurance charges almost 2% of the car’s present value as the premium. In comparison, term life insurance only charges as low as 0.1%.

Here are the top 5 companies:

Bajaj Finserv Health Insurance

Bajaj Finserv will cover essential health, accident and illness expenses and help you protect yourself from uncertain expenses that you might not be ready for. This company gives you various types of insurances to select from like family, individual, critical illness, group/employee, personal accidental covers, senior citizen, maternal etc.

Star health Insurance plans

This company is the first one to stand alone in India. It is well known for its disease-specific health insurances and a wide range of hospitals it is linked to. Star family health optima and senior citizen health carpet are two of their best insurance plans.

Apollo Munich health insurance

Another famous stand-alone insurance company in India is well known for its smooth procedures and portability features. The best part about their plans is that you can renew them for a lifetime. Easy Health Gold, Standard, Exclusive and Premium, Optima Restore Family, Dengue Care Plan, Maxima health, Optima Super are some of their best plans to opt for.

ICICI Lombard Health Insurance

One of the largest private general insurance companies has recently come up with a tool that can help its customers pick up the best insurance plan for themselves. Some of their best plans are Health Advantage, ICICI Lombard Complete Health Insurance, ICICI Lombard Health Care Plus

Max Bupa Insurance

Max life insurance is a well-known company for taking out innovative insurances and also because they are lenient with the terms and conditions. Two of their best insurance plans to opt from are, one is heartbeat health plan (gold, silver, platinum), and the other is health companion health insurance.

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