What is term insurance?
Term insurance is a type of life insurance that offers comprehensive financial protection against the uncertainties of life. Depending on the term insurance plan purchased by you; In case of your untimely death during the policy term, your family will get the Sum Assured. The money received in your absence will help your family members to face financial difficulties. When you consider buying a term insurance policy, it is important to know and understand the meaning of term insurance. Along with this, it is also important to know which plan will be suitable for you and your family. For example, the life cover of the term insurance you choose should be sufficient to meet your family’s financial needs for regular expenses, children’s education, and other obligations.
What are the features of a term insurance plan?
Now that you know what term insurance is, you must be aware of the features and benefits of term insurance plans. The primary benefits and features of term insurance are as follows:
Coverage against life eventualities
If you are the sole breadwinner in your family, a term insurance policy can help your family members face the unfortunate event of your death and secure them against any financial loss. This policy enables you to provide a worry-free financial future for your family.
For example, if you are a 25-year-old non-smoker female, you can buy a term insurance plan with Rs.50 lakh life cover and pay for the next 35 years, your premium Will be around Rs3,599 per annum (inclusive or exclusive of taxes).
Cover for critical illness
In your 20s and 30s, you may have a critical illness like cancer or kidney failure. This will deteriorate your Health term insurance plans offer death benefits without any special features, you can enhance the coverage with a critical illness rider.
As the name suggests, a critical illness rider when bundled with your term insurance provides additional benefits i.e. against any financial loss your family may face for the treatment of any illness covered under the rider
Accidental death or disability (accidental death or disability)
Accidents can happen anytime and anywhere. Depending on its severity, you may require a significant amount to cover your medical expenses and loss of income. Popular term insurance plans with accidental death or disability riders help you deal with situations like this.
Max Life Insurance offers a Comprehensive Accident Benefit Rider (UIN: 104B025V03) with their term insurance plans. This rider provides extended financial protection to your family by covering you against accidental dismemberment and death.
Multiple payout options
If you feel that your family members do not have the necessary know-how to handle large sums of money and they may find it difficult to utilize the lump sum amount received by them under your term insurance policy, then you can opt for a term insurance plan from Max Life You can choose from multiple payout options available.
How to buy a term insurance policy?
Apart from understanding what is term insurance and the importance of buying a term insurance policy, you need to research in detail about the term insurance plan that is right for you. Buying term insurance plans online is quick and hassle-free. All you need to do is follow a few easy steps.
Stepwise checklist for you to follow in order to buy a term insurance policy:
1. Assess your financial needs
Before you choose a term insurance policy, you must thoroughly understand your family and your financial needs and requirements. Whichever policy you choose, it should have enough life cover to take care of your family’s needs well in your absence.
Start with an analysis of all sources of income, number of dependents, current financial liabilities, and lifestyle expenses of your family. Apart from this, the life goals of your spouse and children should also be considered.
2. Estimate Term Insurance Policy Premium
After assessing your financial needs, the next step is to calculate the term insurance premium that you need to pay for your term insurance policy. These include basic term insurance plans, term insurance with survival benefits, and term insurance with various payout options.
The premium to be paid under a term insurance policy depends on several factors such as the life cover chosen, policy term, plan type, age, gender, and smoking habits.
The ideal coverage amount for a term insurance policy should be around 15-25 times your annual income depending on your age.
3. Check the Claim Settlement Ratio (CSR) of the insurer
Before proceeding to choose a term insurance policy, it is extremely important that you check the CSR of the insurance company you have chosen. CSR is the ratio of claims settled by the insurer to the number of claims received by the insurer during a financial year. A high CSR indicates that the insurance company makes its best efforts to settle the claim filed by your nominee.
4. Choose riders for additional coverage
Depending on your needs and preferences, you can customize the term insurance policy with add-ons, also known as riders. Term insurance riders are optional features that you can add to your basic plan to enhance your insurance coverage.
5. Pay term insurance premiums online
Once you reach this stage, you have all the information you need to make a wise decision to buy a term insurance policy. The last step in this checklist is online payment of the premium.
Before you choose an adequate life cover and rider, you need to provide details about your income, profession, current address, and lifestyle habits. Thereafter, you are redirected to pay the premium online using any of the multiple payment modes.
