Life’s good but life’s short. Your job is showing positive prospects. You are taking financial health and wellness with a proactive approach. But, are you taking care of keeping your family’s future needs in your plan? If not, then learn more about term insurance policy today.
A term insurance policy covers your life for a particular term with a sum assured that can be as high as Rs. 1 Cr if not more. You pay affordable premiums against the coverage you are assured. In an unfortunate scenario, if you meet with an accident or an unfortunate demise, your family is provided with the coverage amount. This allows them to avoid compromising on their lifestyle.
Let us quickly go through understanding the essentials of term insurance policy:
1. Affordable Premiums: Premiums make it pocket-friendly. The annual premium can be as low as Rs. 15000.
2. Better Coverage: The coverage amount for the policy can be higher. It allows you to focus on other aspects of investing.
3. Who can buy it? Individuals between the ages of 18 to 60 years can buy the policy. Working professionals, salaried employees, business owners or self-employed individuals, working women, married couples, parents, and others can look at this policy.
4. Tax benefits: The term insurance policy buyers can claim tax benefits under the Income Tax Act, 1961 on the premiums that they have paid. They can claim benefits up to Rs. 1,50,000.
5. Tenure: The tenure of the term insurance policy is up to 40 years. The attractive part is that there is high flexibility in payments of premiums. The premiums can be paid monthly, quarterly, and annually.
How to make an informed decision before buying a term insurance policy?
1. Reading and being aware: You can never go wrong with knowing more about the product that you are investing in or buying. This knowledge will help make informed decisions.
2. Calculating your needs: Understand the coverage amount that you need to protect your family to protect them from facing financial crises in your absence. The fundamental rule is your coverage amount should be 10 to 12 times your annual income.
3. Add riders: Riders are specific clauses that enhance your insurance policy. These riders can help you during accidents, critical illnesses, disability and more. Use them to save your finances.
4. Check claim settlement ratio: This ratio indicates the number of times your insurance service provider has approved the claim and serviced it. While checking this, look into the volume of the claims, reason for rejections and other key metrics like this.
5. Check premiums: Use a term insurance policy calculator to get an estimated premium. The calculator takes into account your age, gender, domicile city, smoking habits, income and the policy amount that you are looking for to provide that figure.
Apart from these points, consider hiring a financial advisor or talking to one so that you can make better financial decisions. Mix buying the term insurance policy with some investments in mutual funds, a medical insurance policy and other instruments to get a solid financial base for your future.
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