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4 Ways to Buy an Affordable Term Plan with Good Cover

28-07-2022 |

Life insurance is an important tool to prepare for the uncertainties that can arise due to the untimely death of the primary earning member of a family. In addition to severe emotional trauma, the dependents of the deceased need financial support to meet their short-term obligations and a steady stream of income to fulfil their long-term plans.

In the aforementioned scenario, the money received under the benefits promised under a term policy acts as a much-needed cushion for the concerned family and enables them to meet their financial obligations. Therefore, saving in a term insurance plan is a wise financial decision.



What is Term Insurance?

It is common for people to start saving when they begin to earn. By encouraging the development of financial discipline amongst people, savings serve as a significant channel for the creation of a corpus to meet one’s predetermined as well as contingent financial commitments. As people move through different stages in their lives, their financial commitments are bound to increase. Despite the increase in earnings as one progresses in their career, savings alone are not sufficient to cater to the ever-rising commitments.

Furthermore, the risk of an untimely death or incapacitation can severely impact their family’s source of income. A term insurance plan is the best method to mitigate the aforementioned risks. It is important to note that term insurance is the simplest form of life insurance. In a term plan, the policyholder pays regular premiums over the policy term and if they pass away during the said policy term, the insurance company would pay their nominee the death benefit determined under the policy.



Here is How You Should Approach Your Term Insurance Purchase

Buying an adequate term policy is crucial for the protection of your loved ones in your absence. Therefore, you must choose a good life insurance company and the appropriate term insurance plan for yourself. There is no such thing as the appropriate term plan or the best company to buy a term insurance policy from. These decisions depend on your financial goals and financial capacity. However, the following four parameters can help you make an adequate decision on the best term insurance company and the right policy for you.

 

1. Get insured at a young age

The age of the applicant is an important factor in the determination of the premium amount and the coverage under a term insurance plan. Therefore, you must purchase a term insurance plan as early in life as possible. As you can enhance the coverage at different stages in your life, your term insurance policy can be altered in accordance with your evolving financial goals and strengths.

 

2. Accurately estimate your insurance needs

As your financial commitments are bound to evolve with the changes in your personal and professional circumstances, you should estimate the various financial needs that may emerge over time. On that basis, you should determine your coverage considering your financial liabilities, number of dependents, outflows for living expenses, etc. This approach will help you ensure that your family has sufficient funds to achieve their goals even in your absence.

 

3. Choose an insurance company with a good reputation

You must purchase your term insurance plan from a company that is reliable and has a history of honouring its commitments. To this end, you can check different insurers’ claim settlement ratios and ascertain their reliability. The claim settlement ratio of an insurer is the number of claims settled per 100 claims received. If the ratio is high, then it means the concerned company has a systematic process of settling claims and does not reject claims on flimsy grounds.

For instance, Tata AIA Life insurance is one of the trusted and reliable insurance companies in India. Equipped with customer-centric values and infrastructure, we offer an easy and streamlined online policy application process. Therefore, you can purchase a term policy online in a safe and convenient manner and save on time and effort.

 

4. Customise your policy as per your financial needs

Buying a term policy online is cheap, safe, and convenient but it is also important to assess and select the available add-on features to enhance the coverage and the benefits you receive from the plan. For example, opting for a joint life insurance rider# or increasing the coverage amount in the light of new developments help you make your term insurance plan more versatile and useful.



Here is Why You Should Purchase Term Insurance


Many young people perceive the risk of death to be quite low and something that is a distant problem; as a result, they often end up ignoring the benefits of term insurance. In this context, the most important features of a term insurance plan are its affordability and flexibility. The premium of a term policy is low and therefore getting a cheap term insurance plan is easy. Furthermore, the long policy tenure of 20 to 25 years means that the premium paid would be considerably less in proportion to the death benefit received under the policy after adjusting for inflation.

 

Insurance companies offer several flexible features on their term insurance plans. For instance, the Tata AIA term life insurance plan offers the option of receiving the policy payouts in a lump sum or in the form of regular income. In addition to this, policyholders can enhance their coverage at different life stages throughout the policy and add additional features called optional riders#. They can choose the policy term and premium payment term and its frequency. Hence the premium can be paid monthly, quarterly, bi-annually, or annually. The premium paid towards a term policy qualifies for tax* benefits under Section 80C of the Income Tax Act, 1961.

Buying a term insurance plan at an early stage in one’s life is, therefore, financially prudent and enables one to have a high life cover at relatively low premiums. Therefore, a term insurance policy should be the first financial investment in your money management basket.

However, it is worth noting here that traditional term insurance policies do not offer any benefit if the policyholder survives the term of the policy.



How to Buy a Term Insurance Plan

It is easy to invest in term insurance and select a cheap life insurance plan that is in alignment with your financial goals. You can visit our term insurance page to check out the different plans on offer. Additionally, you can make use of our online term insurance premium calculator to ascertain and compare the cost of various term policies. The aforementioned premium is determined on the basis of factors such as your age, health, lifestyle habits, sum insured, and policy term.

Once you know the amount of premium you would have to pay, you can choose the frequency of payment, upload the required documents online and make the premium payment.

After the approval of the aforementioned documents, the policy will be issued to you. It is important to note that the policy document can be downloaded, and a copy would be sent to your email address.



Conclusion

A term insurance plan is the simplest type of life insurance plan available yet one with immense benefits that you can customise according to your specific needs. Therefore, you must choose a suitable plan from a reliable life insurance company and free yourself of any worries about how your family will cope when you are gone.

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Tata AIA Life Insurance

A joint venture between Tata Sons Pvt. Ltd. and AIA Group Ltd. (AIA),  Tata AIA Life Insurance  is one of the leading life insurance providers in India. We post everything you need to know about life insurance, tax savings and a variety of lateral topics such as savings and investments in this space. You can access and read a host of different blogs, articles and pages at the Tata AIA Life Insurance Knowledge Center or get in touch with us with any queries or questions!

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Disclaimers

  • Insurance cover is available under the product.

  • The products are underwritten by Tata AIA Life Insurance Company Ltd.

  • The plans are not a guaranteed issuance plan, and it will be subject to Company’s underwriting and acceptance.

  • For more details on risk factors, terms and conditions please read sales brochure carefully before concluding a sale.

  • This blog is for information and illustrative purposes only and does not purport to any financial or investment services and do not offer or form part of any offer or recommendation. The information is not and should not be regarded as investment advice or as a recommendation regarding any particular security or course of action.

  • Please know the associated risks and the applicable charges, from your insurance agent or the Intermediary or policy document issued by the insurance company.

  • Every effort is made to ensure that all information contained in this blog is accurate at the date of publication, however, the Tata AIA Life shall not have any liability for any damages of any kind (including but not limited to errors and omissions) whatsoever relating to this material.

  • *Income Tax benefits would be available as per the prevailing income tax laws, subject to fulfilment of conditions stipulated therein. Income Tax laws are subject to change from time to time. Tata AIA Life Insurance Company Ltd. does not assume responsibility on tax implications mentioned anywhere in this document. Please consult your own tax consultant to know the tax benefits available to you.

  • #Rider is not mandatory and is available for a nominal extra cost. For more details on benefits, premiums, and exclusions under the Rider, please contact Tata AIA Life's Insurance Advisor/ branch.