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Low Cost Term Insurance – A Proactive Approach

Kashi was a 53-year-old man. He had a wife and two daughters. His daughters were at college, one doing master’s and the other in graduation. The younger daughter had a sinus, due to which she needed a regular check-up. Everything was going well, but suddenly Kashi died. His demise brought misery to his family. His wife could not withstand the news, and his younger daughter was drowning in the sinus.

Moreover, the elder daughter did not get the degree even so that she could get a job. Unfortunately, the elder daughter who took her father’s place can have to do the minimal job. Kashi, during his lifetime, could have taken Term Insurance which would have saved his family from such misery.

Before we dive further into Term Insurance, let us understand what it is? There are many insurances you have come across. All serve different purposes. Term Insurance is also one of them. As the name suggests, the Term Insurance is bought for a particular time or a fixed tenure. It is available to provide financial help to one’s family after their death provided during the specified period. This insurance has a relatively affordable premium to other insurances. 

Reasons to buy Term Insurance

This insurance is very underrated among the other insurances because the potential of this insurance is less known among crowds. There is also the myth that it does not provide additional benefits except the assured sum after the demise of the policyholder. Here are some reasons which you blow your mind, keep reading.

1. Financial Security in your absence

In almost many houses in India, there is only a single bread earner. I am sure you must have come across many stories where the death of the income earner made the life of their dependent miserable. I’m sure you don’t want that to happen to your dear ones. Here Term Insurance comes to play. It provides financial security to the dependent of the policyholder after their demise.

2. Affordable Premium

There are many insurances which show many advantages and to seek that one ends up paying higher return. In the case of Term Insurance, you have to pay a lesser premium than other insurance but enjoy the same perk as additional insurance.

3. Higher Return

The sum or the benefits received is higher than the investment. It is said to return 105% on maturity.

4. Financial Shield to the Dependent

One in a lifetime may take loans to meet daily expenses, educate their children, acquire new assets, etc. But suppose if the person dies, then the burden of repaying the loan is shifted to the alive family. In case of situations like this, Term Insurance helps repay loans, hence acting as a financial shield to the family.

5. Tax Benefits 

Although there are many more advantages, one of the most likable advantages is the tax benefits. Under Section 80C of the income tax act, it is mentioned that the beneficiary has to pay less tax.

 Finding the Right Term Insurance Plan

One finds a variety of this insurance in the market, but one must choose the correct term insurance to reap the maximum benefit. The right insurance varies, and that’s why one must consider certain factors to make the right decision before opting.

1. Count of Dependents

One must consider their life stage before considering the sum insured or the cover amount. A person must look at how many dependent members are there in the family and take into account certain future events like expecting a newborn. 

2. Expenses of the dependents

Before opting for this insurance and deciding the sum at maturity, one must analyze the lifestyle of the dependent or the expenses to sustain their life. E.g., if a person’s son is suffering from cancer and has to undergo regular treatment, he must choose a more excellent life cover. This is because, after that person’s death, his son’s recovery from cancer won’t halt due to lack of finance or less life cover.

3. Check on liability

If a person has EMIs to pay and any kind of loans to repay, he must also consider that value. Choose the Term Insurance based on the sum on maturity, which looks after the liability as later in the absence of the policyholder, the dependent has not to suffer.

4. High Claim Settlement Ratio

Let us first understand what is claim settlement ratio is about. It is the ratio of no of claims settled by no of insurance filed. It simply shows how much the life insurance company is reliable. Is it worthy of the trust and the premium you pay?

5. Analyzing Rider

Have a proper check on the additional advantages you can get from riders. This will give extra benefits other than the death benefits.

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What is the cost of the premium?

The premium cost differs based on factors like age, income, health, and even gender. Based on your health report, also it depends. Suppose one has some serious health issue or is involved in activities like drinking alcohol, consuming tobacco, or anything that causes health hazards. In that case, it is highly advisable to reveal it. Yes, it will raise the premium one has to pay, but if the insurer finds this, the policy will be strictly canceled.

Where can I buy Term Insurance?

You can buy from any life insurance company like MetLife, and there are other insurance companies where you can readily get such insurance.

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