Despite the best of our efforts and planning in life, things might go topsy-turvy and our near ones might have to bear the brunt. So, life is often considered inherently risky and one should make the most out of it. With such unpredictability, it is important to be all the more careful and do vigorous financial planning. Therefore, the first step towards financial planning as suggested by top industry financial planners, is buying a term insurance plan. A term plan will not only assist you in terms of tax saving but also secure your family’s condition in case of your absence. Nowadays, term plans are easily available and one can compare term plans and zero in on one. This article will further help you know more about term insurance.
Best Term Insurance Plans
There are many types and variants of term insurance plans available in the market with various insurance companies. However, the 5 best options amongst them are listed below:
- Standard Term Insurance Plan
- This is the simplest and the most uncomplicated term insurance plan. One can select premium payment frequency as annual, half-yearly, quarterly or monthly. The life assured of the term policy pays the premium as per the mode decided at the time of policy purchase.
- If the life assured passes away during the policy period, the insurer will pay the sum assured to the nominee of the policy.
- Note: There is only death benefit in this policy, which means there is no payout if the policyholder outlives the policy term.
- Increasing Sum Assured Term Insurance Plan
- This plan is almost similar to the standard term insurance plan, except the Term Insurance cover increases with the increasing age.
- Such plans will help you match inflation and therefore, have been designed accordingly.
- In most of the term plans the sum assured will increase on every policy renewal/anniversary until the max applicable sum assured is reached.
- The increment in the coverage could be as good as 5% to 10%.
- Life Stage Event Term Insurance Plan
- You can increase the coverage of your term insurance policy on a significant life stage milestone.
- In case you opt for a cover like this, your sum assured and premium will increase with each milestone like a first marriage, the birth of your first child etc.
- Also, if the insured passes away during the policy period, the insurance company will pay the effective sum assured on the date of death to the nominee as per the payout opted by the policyholder.
- Term Return of Premium Plan
- This policy is one of its kind, as the insurance company will pay back all the premiums excluding applicable taxes and rider charges paid, if the life assured survives till the end of the policy.
- The premiums for this type of policy are generally higher than the standard term plans.
- Convertible Term Plan
- This type of term plan allows you to convert your term insurance plan into a whole life insurance or an endowment plan.
- Extra charges may be applicable at the time of conversion from a term plan to a whole life or an endowment plan.
The top five term insurance companies in India are:
- LIC’s e-Term
- SBI Life eShield
- Max Life Online Term Plan
- Reliance Nippon Life Online Term Plan
- Bajaj Allianz iSecure Term Plan
How to Apply For Term Insurance?
Anyone can buy a term insurance policy, however, if there are people in your family who are dependent on your income, you owe to protect them from the potential loss of income in case of your death. The most convenient way to buy a term insurance policy is to go online at coverfox.com. It is vital to compare term insurance policy before you finalize one. It is an ideal option for people who don’t mix their investment objective with risk objective.
Below points will help you to know how to apply for term insurance
- The insurer may first ask you to fill a proposal form online.
- Secondly, it may ask if you have had any life insurance policies earlier or if you might buy in parallel from the same/another insurance company.
- Lifestyle habits like smoking, alcohol etc.
- Medical conditions
- Educational qualification
- Family health history, etc.
On the basis of the above information, you may submit the proposal form to the insurer online, on basis of which your premium will be decided and policy will be issued.
How to Calculate the Premium on Your Insurance?
The Term insurance calculator will help you to compare various plan, features, and premium and select a suitable option for you.
Steps to use a term insurance Calculator are as follows:
- One will first have to enter personal details like name, gender, date of birth etc.
- To answer all family, lifestyle and health-related questions.
- The third step could be to select sum assured and period of life cover, premium paying mode like quarterly, half-yearly, yearly, etc.
- Once you get the premium amount, you can choose the best plan.
The best term insurance plans are easily available online. Comparing term policies online will save you the guesswork and will guarantee an affordable premium.