The process of obtaining a policy isn’t as straightforward as it seems. It is a crucial decision that must be considered carefully. With your requirements in mind when choosing the appropriate policy. However, it often occurs that people purchase a policy that isn’t right for their needs. If this occurs to you, do not be afraid, you have a choice.
Before that, it needs to be understood why people make the wrong choice:
- Unintentionally trusting an insurance broker
- Not verifying the assertions made by the insurance agent with the policy
- There are times when an acquaintance or relative of yours, who happens to be an agent for the insurance firm, will offer you a policy, and you take the policy out of any doubt, recognizing the relationship.
Get all the details for yourself
- Before you take out a policy first, you must get the details from yourself.
- Pick the best policy that meets your requirements and that of the entire family.
- Take a thorough look at the various policies.
- It is recommended to compare the amount of the premium, the rate of settlement for claims, total coverage amount, and the features provided by various policies.
- The aid of online sites can also be utilized to accomplish this task.
Do not worry in case you purchased the wrong insurance
Insurance companies offer the customers a free look for 15 days option to customers who purchase the policy. The “free look” time’ runs for 15 days beginning from the date of receiving this policy statement.
What should you do during the “free-look period’
- Find out all the highlights in the document.
- Find out more about Sum Assured as well as the Policy Term and the Premium Amount and more.
- After you have obtained all the required details, if you’re pleased with the policies, you can continue following the policy. Otherwise, the policy can be terminated within the “free-look period”.
Cash will be deducted when the policy is canceled
When you cancel the policy, the insurance company deducts some of the costs that are related to the policy. It then reimburses the remainder of the premium to you.
What is term insurance?
Term insurance is one type of life insurance policy that gives coverage at an agreed-upon rate of payout for a specified time. If the life insured dies within the period of the policy the death benefit will be paid to the beneficiary. The purpose of the policy is to protect the family members in the event of unpredictability or death.
What’s the price of term insurance?
Term insurance policies come with the lowest cost when in comparison to other forms of insurance for life. The cost is lower due to the absence of an investment component, and the premium amounts are used to fund the risk. The maturity benefit cannot be claimed following the time that the policy has expired. In the event of the death of one of the insured’s, the surviving will receive the policy amount.
When is the best time to purchase an insurance policy for the term?
It is recommended to purchase term insurance before thirty years of age. When you reach this age, an individual is an adult who is responsible. After the age of thirty, you’re in good health and have a good pay job, and your financial standing is good. You’re planning to be married or are just creating your family. You’re looking to buy or construct a home.
The earlier you get started the earlier you begin, the lower the cost
If you’re younger, the cost of insurance will decrease. For instance, if you’re 30 years old then you can purchase term insurance for up to 1 crore by paying a premium of 523 rupees per month. In the same amount, the premium will increase for those who are 40 years old who are taking term insurance. You will be required to pay the amount of Rs 914 per month to get term insurance that is worth 1 crore. So, the earlier you purchase term insurance the lower premium you’ll be required to pay.
Key Features of Term Insurance
Starting age – Minimum start age for starting is age 18 old and the maximum age at which you can start is 65 years old
Grace Period: From 15 to 30 days based on the type of insurance
Plan Types – It offers the flexibility to select the plan. You can pick the plan based on the concept of single as well as joint.
Premium Term Pay – Single Pay, Limited Pay, or Regular Pay
Age of Maturity – 25 Years, 65 Years 75 Years for Full Life (Varies according to the policy)
Premium Amount – Based on the applicant’s age and the Sum Assured
Policy Revival – Within 2 years after the date of the unpaid premium
Nomination – A nomination facility is available
The frequency of premium payments – Either monthly or quarterly, or half-yearly or annually
Policy Coverage – Maturity and Death Benefit
Sum Assured – Varies as per the different companies offered by different insurance companies
The benefits of term insurance policies
A financial product that is extremely recommended – A majority of financial advisers recommend buying term insurance. It can help you deal with the most significant risk in life and death. It offers financial protection to your family in case of your absence. If there is a death of the insured the survivor is entitled to the benefits.
Tax Benefits – The policyholder receives the tax benefit under Section 80C as well as section 10(10D) in the Income Tax Act of 1961 depending on the amount paid.
Death Benefit – It will pay a death benefit for the named nominee. If the policyholder dies within the duration that the insurance policy is in force, the benefit will be given to the survivor.
Maturity Benefit – Maturity Benefit is based on the number of premiums already paid if the policy is continued until the date of maturity.
Additional Coverage – Term insurance can also provide additional benefits like disability or death due to an accident or illness that is serious.
Low Premium Amount – If the person who is insured purchases term insurance in the early years of his life, he will have to pay a lesser cost. As you get older at the point of purchasing insurance, the less will be the cost of insurance.
Discount Opportunity – Life insurance companies provide special discounts for non-smokers and female investors when the amount insured is high as there isn’t any specific risk associated with their lives and, therefore, it is a way to show respect.