There are many life insurance products offered today. Each product is different in features and benefits. Term insurance has gained popularity in the last few years.
In simple words, term life insurance is an inexpensive and pure form of life insurance. You pay premiums for a fixed sum assured. On death within the term of the plan, nominees get the death benefit. This plan offers no survival benefits.
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See Also: Term Insurance For Indians
10 Effective Ways to Get More Out of Term Insurance
The following are the 10 ways to get more out of term insurance:
- If you want to pay a fixed premium for a fixed tenure, choose a level term insurance policy. On death within the policy term, the nominee gets the death benefit. If you survive the policy term, the insurance company pays nothing.
- The cost of living has been increasing rapidly, especially in metro cities like Kolkata, Chennai, Delhi and Mumbai. Moreover, education and health care are becoming expensive each day. The term insurance plan you choose today may not be enough tomorrow. What you can do is go for an increasing term insurance policy. The sum assured for an increasing term insurance plan keeps increasing for the same premiums.
- Opt for a decreasing term insurance policy to cover the home loan. The cover decreases as home loan EMIs are repaid.
- When you buy a term insurance policy with return of premiums (TROPs), premiums are repaid if you survive the policy tenure. The premiums on TROPs are comparatively higher than regular term insurance policies.
- Term insurance comes with several riders like critical illness rider, accident disability rider, accidental death benefit rider and waiver of premium rider.
- Critical illness riders offer an extra cover if you are diagnosed with a critical illness. Be sure to check the inclusions and exclusions. The commonly covered critical illnesses are cancer, kidney failure, heart problems, stroke and so on.
- If you want family members to receive regular income on an untimely demise, choose the income benefit rider. This gives financial security and an income source to your loved ones.
- Regular travelers must avail a personal accident policy. Instead of buying a separate personal accident policy, buy term insurance with accidental disability rider.
- Term insurance offers an option to convert your term insurance plan into a whole life insurance policy or endowment life plan. This is called a convertible term assurance policy.
- Term Life insurance can also be used to save tax. You get a tax deduction under Section 80C up to Rs 1.5 Lakhs a year on term life insurance premiums.
See Also: What is a Term Life Insurance Policy?
Factors to Be Considered While Choosing Term Insurance
- Consider reputation of the insurer while availing term life insurance plan.
- Draft your requirements and shop around for a good term insurance policy.
- Choose the insurance company with a higher claim settlement ratio.
- Compare term insurance policies and buy online.
- Check for key features and benefits instead of just considering the premiums.
- Try to buy term insurance as early as possible.
See Also: Why You Need A Term Insurance Plan?
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