Term Insurance is considered as the purest and the simplest form of life insurance. It helps in making your family financially secure and stable in your absence. Few traits of a term insurance plan are very clear, such as low premium cost, however, you should expect more from your term insurance.
However, at any juncture, if the insured passes away, the nominee(s) (as chosen by the person) will get the assured amount of money. Now, with the best term insurance plans, you can have certain expectations. Here are the seven most useful ones you should have from your term plan:
One of the key reasons to invest in term insurance is the affordability of the plan. Term insurance is a more cost-effective plan to provide adequate financial cover to your family.
For example, if you are 30 years of age, smoker and need to buy a term cover worth Rs. 1 crore, it may cost you as low as Rs. 834 a month or Rs. 10,000 a year. That is perhaps cheaper than the monthly DTH bill for your family.
With a term insurance plan, the nominee(s) can have adequate financial support for the family after the insurer's death. It offers you the highest death benefit with a nominal premium. The best part with term insurance is you can fool proof your contingency plan with additional covers.
For example, you can add accidental death & disability and critical illness covers to your term plan, for a nominally higher premium.
These additional benefits help your family sail through even when you are hit with a hazardous life-threatening disease like a heart attack or cancer. The biggest challenge during disabilities and critical diseases is that your income may stop while the expenses pile up.
With the additional covers in place, the family can continue to run the household and children's education while you recover from the injury or disease.
Usually, generic term insurance would pay a lump-sum amount to your nominee. After that, the nominee must navigate the investment maze to secure a regular income for her and family. Managing a large sum is difficult enough, let alone the possibility of safely generating a monthly income out of it.
The right term insurance plan can help you plan your family’s future in your absence. It makes life easy for your family by first, making timely claim settlements and by offering you options to convert a part of the total sum assured to regular income for the nominee, disbursed as a monthly amount.
You must look for the claim settlement ratio, which is usually a percentage, like it is 98.12% for Canara HSBC OBC Life Insurance. This ensures your family can stop worrying about getting a regular income and continue towards their life goals.
If you opt for a longer coverage tenure stretching beyond retirement, you can choose to pay all the premiums within a short period of time. This limited pay feature is especially useful for you, if you have opted for a whole life plan.
With the limited pay option, you can stop paying the premiums much before retirement and continue the cover.
The whole life option allows you to continue your term life cover till the age of 99 years. That means the policy will benefit your nominees even in case of natural demise. Thus, providing them with a lump-sum and tax-free estate.
You can achieve all this at the term insurance cost.
It is easy to see the financial contribution of earning spouse to the family. But the non-earning spouse also contributes a lot to the family. However, difficult to put in financial terms, absence of the non-earning spouse may also result in increased financial burden.
Thus, the best term insurance plans not only cover the earning member of the family but also the non-earning one. The term insurance also gives you the option of joint cover.
The joint cover implies both the partners are the owner of this policy. In case, anything happens to any partner, the family doesn’t suffer any financial setback. In other words, with a good term life policy, the homemaker also gets the term cover.
As life progresses, your financial earning also increases. A majority of life insurance plans offer a good amount of additional benefits. These are also called riders. You can upgrade with covers like critical illness coverage, accidental coverage, and return of premium.
All you need is a small amount for the premium. These riders assure you a good amount of benefits for your life term insurance. The best part is they are highly affordable. Adding them doesn’t cause a dent to your pocket.
In a nutshell, the family with a term insurance plan gets good financial security in the absence of the earning member. The iSelect Star term plan from Canara HSBC OBC Life can meet all the seven expectations above.
Term insurance plans can offer far more than just a comfortable survival of your family after your untimely demise. Term insurance remains the ray of hope for families even when they lose the bread earner owning this policy.
Ideally, the term insurance should offer ‘enough money for your family to sustain their life if anything unfortunate befalls you. And it should do so without pinching your pockets while you are alive & well.’
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