There is more to term insurance than low premiums

However, low premium Should not be the primary consideration while buying a term insurance policy.

Sajja Praveen Choudhary, Head – Sajja Praveen Choudhary said, “Calculation of one’s life insurance needs should begin with determining one’s life goals, with an aim to protect one’s dependents from financial stress in the event of one’s death. , and then buy a plan that provides that protection.” Term Life Insurance, Policybazaar.com.

Echoing him, Parag Raja, Managing Director and CEO, Bharti AXA Life Insurance said that individuals should evaluate their need for insurance and choose a term plan that will help their financial obligations or their families to fulfill their dreams. helps in.

“As a rule of thumb, a person should buy a life insurance that is 15-20 times his salary. The premium should easily fit into their budget. Also, the claim settlement ratio of the company they are planning to buy insurance from should be strong. One should also consider an insurer who has digital platforms that enable quick and hassle-free transactions with the company.”

What is term insurance?

Term insurance is a policy that helps protect your family in case of your untimely death. In exchange for the premium you pay as a fee, the insurance company guarantees a tax-free lump sum payment to the policy’s beneficiaries on your death.

Here are some of the key features to understand while deciding to buy a term insurance policy.

Payment Options: Some term insurance products allow you to tailor your plan to your specific needs. If the insured dies, the cash amount is distributed to the beneficiary. The prescribed amount can be availed in various ways depending on the type of insurance.

Chowdhary said, “If you feel that your dependent will not be able to utilize the lump sum amount well, you can break it into smaller amounts to ensure periodic income for them. One part of the Sum Assured can be converted into a lump sum and the rest There is also an option to pay Rs.

Premium Payment Flexibility: While buying a life insurance policy, you can choose between a single premium and a regular premium. However, the decision can be made on the basis of one’s financial condition.

Single-premium policies are generally considered a good option when paid upfront, but they can be costly at times.

Regular premium paying option is suitable for those who have regular source of income and want to pay premium for each year of the policy term.

Coverage: This is the most important element to consider while buying term insurance. The calculation is simple if you consider factors such as how much coverage your family will need to maintain their current lifestyle and whether it will be enough to meet the family’s future financial needs. Experts recommend taking a term insurance policy that is at least 20 times your annual salary. Less coverage can compromise your lifestyle while you are away, and opting for more coverage can result in higher premium costs. As a result, it is always a good idea to find out how much life insurance you will need to protect your family.

Add on: A rider can be added to your base term insurance policy to provide additional protection to the policyholder.

It serves as a supplement to existing insurance coverage without the need to purchase a separate policy. Riders are unique to each individual, so it is important to assess your demands and invest in riders accordingly.

Choudhary said, “Based on your demands, you can choose from critical illness, accidental death or premium waiver. These are the most basic riders, each with a different purpose and offering a variety of benefits. However, while buying them, it is important to compare them with other insurers and assess the diseases covered by the policy as well as the benefits offered by each one.”

Policy Tenure: It is always a good idea to get life insurance for longer than you think. Chowdhury said, “If you get a short-term policy, your family will be put at risk once the policy expires, and you may find it challenging to get life insurance later in life. Many insurers usually take 35 years. or offer terms of up to 40.”

He said, “Things have changed dramatically in recent years, and many individuals now want to work for at least 15 years after the age of 60, which requires them to purchase whole life insurance, Which covers them for up to 100 years.”