All of us wish for a life that is free from financial worries and ensuring the well-being and safety of our families is a priority. Therefore, it is important to invest your savings wisely to safeguard the financial future of your family. Furthermore, you must plan for adverse events so that your family has adequate financial support in such circumstances. This is why a term insurance plan is one of the most reliable financial products that can help you ensure the security of the aspirations of your family members.
If you are looking for affordable term life insurance plans, the perusal of online term plans can help you compare the features of different plans on offer. You can visit the website of your insurance provider, input the relevant personal details, and compute the premium by using the online premium calculator. The aforementioned approach can also enable you to assess the various add-on rider# benefits that can be added to a particular policy to enhance its coverage.
What is Term Insurance?
Term insurance is the simplest form of a life insurance contract wherein the policyholder gets life coverage for a specific period in exchange for a predetermined amount of premium. If the policyholder dies during the term of the policy, their nominee is entitled to receive the sum assured which can act as a cushion for them to handle their financial obligations.
In this context, the term plan premium is determined by several factors such as the age of the applicant, the sum assured, the premium payment term, and the selected additional rider# benefits. For instance, TATA AIA’s whole life term insurance plan offers life coverage up to the age of 100 years.
How Much Does Term Insurance Cost?
As term insurance is the most basic type of life insurance cover, it carries a relatively low cost. From an insurance company’s point of view, the concept of the time value of money is applied to determine the premium to be paid; the amount of premium is a predetermined fraction of the present value of the sum assured you choose.
The premium value is also computed keeping in mind general economic conditions, the outlook for the insurance company, its risk servicing, and revenue model. As the policyholder, you can rest assured that the protection under a term plan offered is the most optimal for the premium you choose to pay.
With additional features such as the extension of coverage and the top-up of the sum assured, you get the opportunity to have an enhanced coverage at a lower cost compared to a new policy every time you wish to modify your coverage. Also, you can include attractive riders#, such as accidental death benefit, critical illness cover, etc. at a nominal premium and enjoy extended coverage at affordable rates.
Further, the tax* deduction of up to ₹1,50,000 available under Section 80C of the Income Tax Act for the premium paid for life cover lowers the overall cost of protection to the policyholder.
As there are several savings plans and products available for you to choose from, it is important to remember that pure term insurance plans are the cheapest amongst all the plans offered by insurance companies.
Here is why Term Insurance Plans are Affordable
There are many reasons why you can buy term insurance at an affordable cost, some of which have been discussed below.
Low premium for a high life cover
Term insurance is often the first insurance product people choose early in their lives since it offers a high life cover at a low rate of premium. As soon as you start earning, you must purchase an affordable term insurance plan by setting aside a small proportion of your income for the premium payment.
If you start early, the premium is pegged low to make it affordable for young individuals who want to get the safety of an insurance umbrella. For instance, Tata AIA Life Insurance offers term plans at affordable rates. The TATA AIA term plan has a premium payment period of 40 years or more. Therefore, the longer the duration of cover, the cheaper the cost.
In response to the evolving financial needs of customers, insurance companies keep adding attractive features into basic term insurance plans. Furthermore, you also get the option to add the features you want in your insurance plan through the purchase of various riders#. Therefore, the aforementioned features allow you to customise your plan according to your needs.
The option to buy the plan till the age of 65 years
The option to receive the death benefit as a lump sum or as regular periodic income
The flexibility to increase the cover as you go along depending on your financial goals and strengths
The option to increase the sum assured through top-ups
The opportunity to receive 50% of the sum assured in the wake of the occurrence of a critical illness during the policy term
Preferential premium rates for non-smokers and female applicants
Riders# for income protection in the wake of a disability or hospitalisation for critical illness
How is Term Insurance Useful?
A term insurance plan should be an essential element of your financial planning because it enables you to prepare to fulfil your family’s financial needs even in your absence. At any point in time, the dreams of your family members should not be derailed due to a dearth of sufficient funds.
Therefore, you should look for savings avenues that can help you accumulate sufficient funds in accordance with your family’s estimated future financial needs, including the higher education of your children, the wedding expenses of your children, the expenses pertaining to the long-term care necessary for a disabled family member, and your post-retirement expenses.
Most of us tend to have adequate financial plans in place. However, despite thorough planning, if something untoward happens, your savings may not suffice to support your family during a difficult situation. In such a scenario, the death benefit promised under your term insurance plan can provide substantial assistance to your family.
How can I Buy Term Insurance?
Purchasing a term insurance policy is a simple process, particularly if you buy an online term plan. Tata AIA Life Insurance offers online support for policy application, processing, and approval. You can apply for a term insurance policy online on our website by submitting your basic details, uploading the necessary documents, and paying the premium.
It is easy to ascertain the amount of the premium for a particular policy by using the term insurance premium calculator available on our website. You must read the information brochure fully and contact customer service to get your queries resolved before purchasing a term insurance policy.
Responsible financial planning consists of a systematic approach towards your savings and investment so as to have adequate funds available when required. In this context, term insurance should form the pivot around which your planning happens because it functions as the pillar of support for your family when you are gone. Moreover, compared to several instruments, the term insurance claim settlement process is quicker.