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| Term Insurance |
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| Term insurance plan is a must for a person who has dependents or a family. It is a well accepted fact that a term insurance plan provides the most ‘value for money’ proposition. So, what is the difference between a term plan and any other life insurance plan? Term insurance is the simplest or the purest form of life insurance. In this case, provisions are put in place in the event of the demise of the insured person, The family of the deceased is paid a pre-determined amount as part of the coverage. |
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| Say for instance, a person bought a term insurance plan for a sum of Rs 30 lakh. The tenure or the term of the policy is 20 years. So, if the insured person passes away in the duration when the policy is valid, the family will be paid a sum of Rs 30 lakh. |
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| If he insured person happens to outlive the tenure of the policy, all the amount paid in the form of premiums will be forfeited by the insurance company without any benefits to the insured or his/her family. |
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| Another important aspect of life insurance is to ascertain the safety net which the family of the insured will require in the event of the demise of the insured. The calculation is done by keeping a view on the present standard of living of the family and the funds that would be required in order to continue living with the same standard of living. Also to be considered are the various important events that are imminent like marriages, higher education etc; and the debt that the deceased must have left behind unpaid. |
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| After the calculation of the aforementioned future expenses the person can come to a definite number or the coverage which he/she may require in order to provide for the family or dependents so they can continue their present standard of living. |
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| Points to remember |
- An insurance policy should cover a person till the age he intends to work.
- Don't take a short-term cover of 15-20 years. In the 40s, the need for life cover is at its zenith. If you take fresh insurance at that age, it will cost you a bomb. You might even be denied the cover if you have not been keeping well.
- Choose a term plan that offers you the flexibility of fixing the tenure
- Have you bought a Rs 50 lakh cover and think it is sufficient for you? Think again. The value of Rs 50 lakh will only be Rs 28 lakh after 10 years assuming an inflation of just 6%.
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| For more information or any other assistance,
please contact us. We will be happy to help you. |
