Term insurance is the purest form of insurance which comes with no clutter, the original meaning of insurance is protection against risk and the risk may compromise of life, property, accidental and many other things and to simply further insurance is a thing providing protection against a possible eventuality and term insurance benefits are tremendous when compared to the price we pay. Term insurance offer peace of mind, provides broader risk coverage, offers best return on your investment (just in case if something happens to you) and is the perfect insurance plan.
Today in this article I would like to stress about Term Insurance which covers Life, basically a Term Insurance is a no frills product that covers your life for very low premiums and pays you nothing if you outlive the term (we have term insurance products that offer return of premium at the end of tenure, but that’s a different story).
Term Insurance Benefits (Demystified!)
Let’s take an example to brief you better, consider Mr. Kumar aged 30 years living happily with family of 4 which consists his wife and 2 young kids. Mr. Kumar is the bread winner of the family and is decently paid and took term insurance for the life cover of Rs. 1 Crore for the term of 30 years.
Case 1: Insured Person is dead during the Tenure
After 5 years of taking the term insurance policy, in an unfortunate incident Mr. Kumar was declared dead in an accident and a claim is filed with the insurance company, the company evaluates the claim and pays the nominee an amount of Rs. 1 Crore and the policy is considered closed and no further benefits will be paid to the nominee. Although the emotional loss of losing a person cannot be replaced the family is fortunate enough to take care of their finances with the claim amount which will help them to maintain their standard of living.
Case 2: Insured Person Outlives the Term
In another case consider that Mr. Kumar had outlived the term of 30 years and is now 60 years old, in the pure term insurance policy no amount will be paid to Mr. Kumar for outliving the term, he is covered for the risk of losing his life for 30 years and now the policy is considered as closed.
The above scenario is a best example that stresses the importance of term insurance and will help us to learn the term insurance benefits.
5 Strong Reasons Why You Should Buy Term Insurance Today
Everyone one of us assumes that nothing will happen to us, but what ‘if’ something really happens to you owing to uncertainty of life? For peace of mind and to ensure that your family will not have to bear the financial loss in your absence and to cover the risk of your life, it is a viable idea to opt for Term Insurance covering your life.
The Perfect Insurance Plan
Term insurance plans offers what it says, they cover your life in an event of unfortunate loss. Insurance companies design Term Plans in such a way that they are priced competitively and will pool the policy holder’s money to benefit the unfortunate event that may occur for one/few of its policy holder.
Gives You the Best
Term plans gives you the best, they cover your life for higher amounts (Sum Insured) for the little money you put. Term Plans are cheaper (read Online Term Insurance Plans here), cost effective (if bought online when compared to offline plans) and with no savings plan attached to these there are no other expenses to be borne both by the insurer and insured to manage the funds.
Peace of Mind
Term Plans gives you peace of mind and you will be relived of tensions like how your family will handle your liabilities (home/car loans & other commitments) and protect your loved ones in your absence and I am sure that your spouse will love (not emotionally!) you for this.
PS: Also you have the perk of tax saving by claiming the premium amount paid for term insurance for tax deduction under section 80C.
Get Rid of Bad Insurance
Opting for a Term Insurance Plan will place you in best league which entitles that you understand risk and insurance in the right way and it helps you in getting rid of bad insurance policies such as endowment plans which are typically savings/investment cum insurance plans that offers you lower returns and just in case when you are approached by your bank’s relationship manager or some friendly life insurance agents suggesting endowment or ULIP plans you can simply say that I am properly insured and can even prove them that they are wrong in suggesting endowment or ULIP plans.
Premiums Increase with Age
Term Plans premiums will increase with age and there is no point of waiting to opt for term insurance as the risk that you carry on your shoulders in case of unfortunate risk is definitely not worth the risk and the best age or time to opt for insurance is right NOW.
Between Us: I will rest my case now, please share your thoughts on this and take proper action by buying term insurance in case if you haven’t had one or share your story on how you bought your term plan and what are the things you have considered when buying your “Best Term insurance” from the “Top Term Insurance Company” according to you, after all sharing is caring and it inspires the tribe to take appropriate actions.