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21st Dec 2020 | 10 min |
The impact of the coronavirus pandemic has made us realise the importance of being prepared for uncertainties. People are now increasingly looking to buy a good life insurance policy to safeguard their family’s future. Traditionally, a life insurance plan entailed two simple things - optimum life cover for the insured and financial safeguard for the insured’s family. However, the developments and expansion of the life insurance sector have brought in a wide variety of life insurance products. If you want to buy life insurance today, then you can choose from whole life covers, endowment covers, money-back policies, pension cover with monthly income, and so much more.
For a beginner, it is easy to get confused by the aforementioned types and choices among life insurance plans. So, let us explain the simplest, purest form of life insurance cover you can buy to ensure a high coverage at affordable premium rates - the Term Life Insurance plan.
A Term Life Insurance plan is the most basic as well as an affordable form of life insurance coverage. It pays out a pre-determined sum of money (called Sum Assured) to surviving family (nominees) of the insured person in case of his/her unfortunate death during the term of the policy .
As the name suggests, Term Insurance plans are valid for a specific “term.” The coverage is valid for a pre-determined period of time called policy term. If the policyholder survives the policy term, in most cases, no benefits are paid. However, a variant of the same, called Term Plan with Return of Premium ((popularly called TROP), is also available that pays back the premiums paid to the policyholder on survival till the end of the Policy Term.
Term Life Insurance plans in India are available in multiple variants. One can avail a specific type of Term Life cover based on their individual insurance needs: 1. Level Term Plans – a fixed sum assured throughout the policy tenure 2. Increasing Term Plans – the sum assured increases every policy year in tune with the increasing responsibilities 3. Decreasing Term Plans – the sum assured decreases every year to match the decreasing insurance needs, typically purchased to cover outstanding loan liabilities. 4. Term Plans with Return of Premium* – the total value of premiums paid by the policyholder is paid back as a ‘maturity benefit’ in case the insured survives the policy term It is imperative that you go through the offerings of the insurance company and choose the one that best suits the financial needs of your family.
It is essential to go through these questions to make an informed choice:
As a general rule of thumb, a person should buy a Term Life cover that is at least 8 to 10 times their yearly income.
For instance, if an individual earns ₹8 lakhs today, their Term Insurance coverage should be between ₹64 lakhs to ₹80 lakhs.
However, this number should increase in case the insured has liabilities, the burden of which will fall on the family in case of the insured’s demise. In the case of loans and liabilities, the Term Insurance coverage should also include the total outstanding liabilities.
In case the financial dependency on the individual is more, for instance if the individual has dependent parents, spouse and children, the cover amount should be dialled upwards appropriately.
In India, you can buy a Term Insurance policy both through online and offline methods. With the prevalent social distancing norms and emphasis on ‘no-contact’ transactions in the post-COVID world, it is advisable to buy Term Insurance online.
Tata AIA Life Insurance is one of the leading names in the life insurance segment in India. Along with the trustworthiness of the TATA brand, Tata AIA offers:
One of the umbrella protection plans from Tata AIA, Maha Raksha Supreme plan offers varied choices to offer an all-round coverage for the family:
A pure Term Life Insurance plan, Sampoorna Raksha by Tata AIA offers the perfect combination of extended life cover and affordable premiums.
An attractive Term Insurance plan from Tata AIA, Sampoorna Raksha+ offers: • Return of Premium if the policyholder survives the policy term • Two death benefit payout options – Sum Assured on Death (Lump sum) or Sum Assured on Death (Lumpsum) plus Regular Monthly Income (up to 10 years)
A pure Term Insurance plan from Tata AIA Life, iRaksha TROP offers the dual benefits of Return of Premium and optimum financial protection
One always strives to secure the lives of their near and dear ones, and a Term Life Insurance plan is the perfect way to do that. To buy the best Term Insurance policy, it is crucial to know what term insurance is and the benefits it offers, along with the various features and inclusions that should match one’s financial needs. Therefore, before buying a Term Insurance plan, assess the specific insurance requirements, , look at the Term Insurance benefits and inclusions, and finally choose the suitable plan.
By submitting your details, you are giving your consent to receive SMS/Call by Tata AIA Life Insurance Company Limited or its representative, with reference to this solicited inquiry even though you may be registered on the DND list. L&C/Advt/2019/Jan/075