Categorized | Life Insurance

Deciding Term Insurance Sum Assured

Overview of Term Insurance:
Term insurance as the name implies is a life Coverage that an insurance company offers & insures you for a fixed term. It is the cheapest form of insurance if the investor is looking only for death benefits. The Policy period varies from five years to thirty years. Term Insurance is easily understood and needs no elucidation. The investor chooses the term plan and would be paying an amount; as Premium either monthly, quarterly or annually throughout the policy period. Unlike other types of insurance term insurance does not provide you any returns as such. The premium you pay is never going to be paid back. In the event of death of the Insured within the term period the nominee would inherit the death benefits or the sum Assured as per the terms of the insurance policy.

Benefits of Term Insurance:
It reduces financial strain on the family of the insured after death. It’s a security for the insured’s family. Conversion clauses in the policy of the term insurance allow change in the term policy to a permanent one whenever desired. Some conversion clauses also allow you to switch over plans up to 75 years of age.  Most importantly; before buying a term insurance the clauses needs to be read and understood, since it differs from policy to policy.

Online Term Insurance:
Prior to computerization the only mode to buy a Term Insurance policy was through Insurance Agents, but now-a-days buying any form of insurance has become trouble-free due to its offerings online by the insurance companies. The online websites of the insurers provide valuable information about the various policies in detail. The point of differentiation between regular term insurance plans and online term insurance plans is that the premium paid for online policies are lesser than the regular policies. The insurance companies offer a margin of 35-40% discount on the premiums paid. You may wonder why the concession is given. The insurance company makes profit with online term insurance as they can save the commission to be paid to the agents. Online term insurance plan has no commission as we get term insurance directly from the insurance companies.

Benefits of Online Term Insurance:
Few benefits of online insurance are listed below,
  • Online free insurance quotes are available in the web for the investors to calculate how much money they will require to invest for any particular return they expect.
  • In online insurance we can also make a comparison of term insurance policies of various insurers and analyze well before investing for term insurance plan.
  • Buying an insurance policy online is very easy and has only a few steps involved. You research, choose the policy, fill in the application, and make premium payments online using your debit or credit card and even net banking.
  • Much of time is saved as the entire process is online & trouble free.
  • Inclusion of Riders with the term insurance policy is an additional benefit that the policyholders can enjoy to meet their specific needs and customization.

Key Factors Influencing The Choice of The Best Term Insurance Plan:
  1. Consideration of the age, present health and medical condition and the existing loans. Only based on these the choice of policy can be made.
  2. Compare the various policies of insurance companies online to choose the best one that suits you.
  3. Look for the financial performance of the insurance company in the market.
  4. Understand the policy well and calculate the Claim settlement percentage that the Insurer is offering.