Tag Archive | "Term Insurance"

Term Plan: Buying early gives you the benefit of lower premiums

  • Easypolicy
  • 05 Mar 2015

We all know it is essential to buy Term plan. But it is not just a matter of buying – it is also that of deciding what the best time is to buy one considering the costs and benefits involved. Is it too early or too late to buy? Would I be saving more or less if I decide to postpone my decision?

Here is a briefing on timing to buy term insurance, in consideration of factors such as cost, inflation, risk, and of course, tax benefit.

  • Does insurance cost more with time? There can be no standard way of telling how much your Premium would be when you decide to purchase. However, you could be sure of the fact that the later you buy, the more costly it would be. And the reasons have definitely to do with Inflation and risks.

  • What role does inflation play? In simple terms, you could expect the rupee to lose its value with time, irrespective of how much it pares against the dollar. An ounce of product A would cost more ten years down the line in all likelihood, than what it costs now. Of course, you could expect your salary to rise as well – unfortunately, while there is no sure way of knowing what your salary would be in the future, you could vouch for the fact that costs would have rocketed up. If you could find a way for your salary to match the rising costs, count yourself lucky.

  • What are the risks involved? If you buy Term Insurance early in your career, you would be in the low-risk bracket, and would hence have lesser premium to pay. To the contrary, if you were to find yourself in the high-risk group because of time and age, and if you decided one fine day to buy insurance, you could be sure that the insurance companies would welcome you, but only with a higher price tag.

  • So, what about tax benefits? Your savings on your term plan would come from lower costs associated with premiums, as well as lower taxes that you pay on account of provisions associated with income tax. Considering that money is only likely to lose its value with time, money saved today means much more than money that you would save later. And you may as well want to make use of legal provisions today, than speculate on what they could be years later when you make a buying decision.

So, if you are looking for tax benefits through term insurance, now is the time. 

Factors to consider while buying term insurance

  • Easypolicy
  • 27 Feb 2015

Where would you head if your priority was low Risk and low premium? The first response would naturally be Term insurance. Buying term plan is a relatively easy proposition. However, there are tricks to every trade – and these are the basic factors that you would need to consider when you make your purchase decision.

  • Are you adequately covered? It is so easy to buy accessible instruments such as online insurance these days that the level of cover could be overlooked. It is essential that you conduct reality checks to see if your level of cover is sufficient, considering your personal and financial circumstances.
  • What’s the duration of your insurance cover? The last thing you would want to happen is to see that your insurance Premium of a lifetime does not come in handy just when you need it – that’s why, it is important to decide on the tenure of your term insurance, making sure it is valid to see you through your old age, and you buy it on time. 
  • Brand value does matter. If you thought brand was all about advertising and make-believe, you may want to think again – reputation to pay clients and settle claims is all that matters when it comes to the “moment of truth”.
  • The rupee does not appreciate – and that’s called inflation. And the way Inflation could affect your plans is in terms of the value of your Term Insurance as well as through the insurance premium that you pay towards it. When you calculate the amount that you would want to insure, do consider the effect that inflation could have on your decision.
  • Have you considered online insurance? It’s not just because it is easier for you to buy online, but also due to the fact that you could be shelling out much less than what you would if you were to buy the traditional way. And yes, with online insurance, you would also have the luxury of comparing insurance options available to you within your budget and for your circumstances, before you actually make the decision.
  • What’s your cover? That’s the key in term insurance. When you remember this is for a fixed term and that you are doing it with a purpose, you would focus more on cover and less on the investment part of it. Needless to say, this would turn out to be a wise decision when you make the most of your insurance premium through maximising the coverage. 

As you could see, with facilities such as online insurance available at the click of the mouse, you would be better empowered in choosing a product of your choice, precisely tailored to suit your needs. 

How good is online comparison for buying a term plan?

  • Easypolicy
  • 11 Nov 2014

erm insurance has become increasingly popular in the insurance sector so much so that some plans are available exclusively online. Buying Term plan online is convenient, easy and costs less than buying from an agent or broker.

Insurance companies have their own websites where the insurance plans are available for purchase. Apart from that there are online companies that bring together insurance policies of different companies under one roof so that a person can purchase an insurance Policy after comparing it with other policies under the same category.

When comparing online plans, one must keep the following factors in mind before purchase:

1. Every insurance policy has its own limitations. Hence, buying the right policy would provide a win-win situation for the company and the customer. 

2. The customer must be clear about his requirements so that it is easy to compare the different insurance policies according to their needs. Only then the process of comparison becomes effective.

3. It is necessary to cross check the insurance policy of a company with what is put on an aggregator site for comparison. This can reduce any problems occurring because of wrong information given to the customer.

4. When comparing term plans, it obviously is wise to choose the one with the lowest premium, as long as other features of the policy do not vary so much from one company to another. For this, one has to thoroughly research all options available before making a decision.

5. One must keep in mind that online plans are not customized to the individual needs, and one cannot bargain over the Premium charges with the insurer. Hence, it is important to read and understand the term policy in detail before choosing to buy one.

6. Aggregator sites need not necessarily have all the available insurance products for comparison .So, it is necessary to have prior knowledge of the insurance companies before comparing them.

7. When comparing Term Insurance plans, one has to keep in mind that Riders like accidental benefit and others may not be available online as a bundle. So, when purchasing a policy, it is necessary to opt for an insurance cover that best suits the needs and not base decisions only the cost of the policy.

8. It is necessary to ensure that all details are available for comparison. If some essential details of the policy are missing, then it is better to avoid purchase and go for a policy where all clauses are clear to the buyer, or, engage in further research for better decision making.

Although comparing insurance plans before purchase is advisable, it takes an informed eye to review the policy before purchasing it online.