What is Term Plan?Term insurance is basically a life insurance plan providing a financial coverage to the beneficiary after the death of the policyholder. It is usually for a long period of time with a very nominal premium amount. Term insurance is a protection plan for your family when you are not available for them. Just like Heath insurance, a term plan is also a necessity. You cannot compare term plan with other saving plans which give you profit on maturity or dividend. In saving plans you invest in equity, debentures or balanced plans based on your risk level. But in the case of term plans, you invest for your family. If your responsibility to earn for your family and in case of death, your family should not suffer financially. You need a term plan. There are various kinds of term plan options. The basic term plan will give benefit in case of death of the policyholder. But, the term plan also works as fix income option, permanent disability, accidental case and much more depending on the policy option you opt-in.
What is the need of a term plan?
You are the earning person of your family. You must be having home expenses, loans, EMI payment, house rent, school college fees, home bills, children planning for your child’s education and your retirement planning. Majority of the bread earns have such kinds of expenses and investment planning. You plan everything according to your business or salary income but in case of death, your expenses and future planning will be zero and it will be very hard for your family and dependents to manage all the expenses. To be on the safe side you need a term plan with a nominal premium of approx. 6000-7000 per year for the cover of 50 Lacs. Depending upon your liabilities you have to set the cover amount. You can pay the premium monthly also. In the monthly plan, the amount will be very nominal and your family will be secured financially. As your age will increase, the premium amount will also increase, so it is the best option to invest in a term plan as soon as possible.
If you want to get something in return with term plan you can also go for fixed income options. According to that option, you will get a fixed income after the maturity. It means you will get a life cover and return on invested amount.
Benefits of Term Plan?
- Term insurance provides financial security
Normally a person take attest cover of 1cr and the premium is just 1000 per month. The amount is reasonable and your will get financial safety of your family member for their expenses and your child’s future.
- Low Premium
Premium amount of term insurance is very low as it is a protection plan, not an investment plan. So, you need not to pay a huge premium to get higher returns.
Riders are the additional benefits that you can add to your policy like permanent disability, accident cover. The rider will cost additional 300-400 in per month premium will give protection if you fall in such case. The cover amount will be increase as per your option terms and the duration selected
- Lifetime Cover
Normally a term plan is up to 75 yrs age but you can opt for lifetime cases also. You will get life cover till you last breath.
- Tax Benefit
You can get tax rebate u/s 80C with a term insurance plan.
- Peace of mind
A term plan is designed to give you Pease of mind. The peace of mind against liabilities you have. Your responsivities will be covered even after you so what you family should not suffer.
You can buy term plan online but you need term plan agent to discuss your needs to select a term plan accordingly. After an agent act as an advisor, not a monthly target employee whom you don’t know. He will not be responsible for not discloser of better options for you and the hidden term and condition. Just like a health insurance agent is available for you to settle the claim and other formalities. A term plan insurance agent is also required to update you also the changed of the policy, the hidden clause and to maintain a healthy lifelong relationship with you. You cannot compare the services of an agent with a 2-3% discount that you will get online. Because the real story comes when you need the amount back from the company. You need a financial advisor who will help your family to get a claim from the company.
There are many companies which are selling like HDFC Life, ICICI, LIC, MAX Life and much more.
Financial Discussions can not be done without a cup of coffee.