Life Insurance is a contract between the insurance policy holder and the insurance company. The insured pays a premium and the insurance company pays an assured lump sum to the beneficiary upon the death of the insured person. There are several types of Life insurance plans and Term Insurance is one of them.
Term Insurance ensures the family’s financial independence in the event of the death or critical illness of the policy holder. Unlike Life insurance which provides coverage for a lifetime, Term life insurance provides protection for a specific period of time. The sum assured is paid to the nominee only in the event of the death of the insured person during the policy period. In case the insured survives till after the policy term, he/she will not receive anything. Yet it is the best form of insurance. The most important reasons for you to buy a Term Insurance policy are:
· It is very important to take a Term Insurance policy if you are the chief wage earner in your family and have high financial liabilities. It is meant to provide enough money to your family to replace your income in case of any eventuality.
· Term Insurance policy can give you a very high life cover for a very small premium. This would usually be a fraction of what you would pay if you buy other policies with the same coverage. As a result you can easily go for a higher sum assured. For example you can buy a policy of Rs. 1 crore for which you will have to pay a premium of about Rs. 15,000 a year.
· Term Insurance can be bought for a wide range of terms such as 10, 15, 20 or 30 years and the coverage can be chosen as per your choice.
· The annual premium which is paid for a Term Insurance policy qualifies for tax deduction of up to Rs 1 lakh premium paid per annum under section 80C of the Income Tax Act.
· Taking a Term Insurance policy which matches and links the amount and tenure of your home/car loan is a very sensible move which will protect your family from this sudden liability in case of your death.It improves the quality of life by giving you peace of mind and making you tension free.
There are several companies in the market offering various Term Insurance Plans at very competitive rates. Before buying and zeroing in on any one plan you should compare the various Life Insurance Quotes available, to get the best possible plan. Most companies these days are selling their policies online, which is the most convenient way of buying them. You could compare Term Insurance Quotes online and then decide and buy the most suitable policy from the comfort of your home. It saves your time as well as effort. It is important to decide on the tenure (you need to cover yourself till your retirement) of the term plan and buy it as per your financial needs. It is always better to buy a term insurance at an early age as the premium rate increases with age.
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