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Why does Term Insurance Needs to Be Part of Your Financial Plan?

Why does Term Insurance Needs to Be Part of Your Financial Plan?

Life is very uncertain as one never knows what may happen next. Therefore, in order to ensure your family's security, it's vital to include an insurance policy in your financial plan. Insurance is the most important part of financial planning, although people tend to ignore this component as they focus more on wealth generation than protection. But, considering the rapid change in lifestyles, the need of life insurance has become equally important. There are different types of insurance plans that safeguard you and your family against the unnecessary expenses that arise due to death, accident, disability, illnesses and term plan is one such plan which can help you with the same at the time of any eventuality.

Term insurance policy prepares you against the unfortunate events that may occur anytime in life. It's a simple product that offers financial coverage and stability to you and your family in case of any mishap. Also, in case of term plan, if the insured person dies during the policy period, then death benefit is paid to the beneficiary by the insurance company so that in his/her absence, the family not just becomes financially independent but also, is able to fulfill the pending obligations of the individual, like child's marriage, higher education, etc. Besides, here's the few reasons that shows why term insurance needs to be a part of your financial plan –

  • Flexibility - Flexibility is one of the most important benefits of buying a term insurance plan. You can choose to go for an online or an offline plan depending on your needs. Moreover, it gives you the flexibility to choose your policy term and premium payment option. Along with this, you can change the plan or customize it as per your requirements.
  • Simplicity - As compared to other plans, term insurance policies are easy to understand. All you need to do is to pay the desired amount of premium and get yourself covered under the policy.
  • Tax benefits - Tax advantage is yet another significant feature of a term insurance policy. In case of a term insurance, not only the premium amount is less, but the premium paid towards the policy is eligible to tax deduction under section 80C and Section 10D of the Income Tax Act.
  • Financial stability for longer tenure - Term insurance provides complete financial security. This plan offers the choice of life cover up to the age of 80 with terminal illness and in-built death cover.
  • Spouse cover - Term insurance plan also offers spouse cover. It gives you the option to cover your spouse under one contract. This pure protection plan provides multiple benefits to you and your spouse. It ensures that the future of your partner is secured in your absence.
  • Rider benefits - One more benefit of buying a term plan is its optional riders. If you are willing to add a lit extra protection in your plan, then include these riders at an additional cost. For example, in case of a term plan, you can opt for accidental death/disability benefits.
  • Future financial security - Term insurance is one such life insurance plan that offers high coverage at lower premium rates. Though other insurance plans might promise you lifelong coverage, guaranteed returns, but term insurance offers high sum assured at affordable premium. It ensures your family's complete financial security at low premium.
  • Low premium rates - One of the major benefits of buying a term plan is its lower premium. The premium rates of term insurance are very less as compared to other traditional plans. To get a life cover, one only has to pay just one percent of his annual income.

On the whole, a term insurance plan has got several benefits. Thus, it's definitely a wise decision to buy a term insurance especially if you are the sole breadwinner of your family.

So, if you are planning to opt for a term insurance plan online, then choose to go with iSelect Star Term plan by Canara HSBC OBC Life Insurance. This protection plan offers life insurance, spouse cover, lower premium rates for women as well as terminal illness cover along with accidental death benefits.

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Frequently Asked Questions (FAQs) for Term Insurance Plans

A person can only purchase a term insurance plan till the age of 65 years, and they can choose the risk coverage for up to 99 years of age. One can easily buy the best online term plan between the age of 18 to 65 years.

This being a term insurance plan doesn't offer any payout after maturity or expiration date

Each insurance company has its own term insurance premium calculator. If you want to check out the premium quote, go for the iSelect Star term plan calculator. It gives a premium amount based on your age, gender, habits, education, and annual income.

You can purchase an iSelect Star term plan anytime between 18 to 65 years of age. This is a term plan with return of premium option – that means all the premiums paid throughout the tenure will be paid back to you if you outlive the policy.

It depends on your needs. For example, if you want to cover a child's education or wedding expenses, you have to include them in your coverage. Your premium will be calculated accordingly when you buy the best term plan in India.

If your key purpose is to give your Family financial protection, go for the best term insurance plan. And if you want some savings, in the end, go for a traditional life insurance plan. iSelect Star is a term plan with return of premium option. All the term insurance premium will be paid back to you, if you outlive the policy term.

Go for at least 12 times cover than your annual income. Or you can go as far as 20 times coverage as per your needs.

The right time is when you don't have anything to keep your Family safe from financial storms, and they rely on you for financial needs.

If you are unable to make the payment or suffering from a terminal illness, the best term insurance plan pays a part of the sum insured to treat your disease.

Term life insurance plan riders are attachment or endorsements made, while taking the term insurance policy, as a supplementary coverage to policyholders. Apart from the core death benefit, term insurance plan riders offer below-given additional benefits:

  • Accidental Death Rider When a person suffers from a terminal illness, his/her family ends up spending a significant amount in treatment and medical expenses. Accelerated death rider pays a part of the sum insured in advance to cover such costs and save the family from running out of cash.
  • Accidental Disability Rider If the policyholder can't pay the premium because of an accident or permanent disability, a sudden disability this pays the premium on behalf of the policyholder till completion of policy term or for a defined duration.
  • Critical Illness Rider If the insured person gets a heart attack, cancer, or any other critical illness, this rider pays a lump sum on valid diagnosis.
  • Premium Waiver Rider If the policyholder is unable to make payments due to income loss or disability, a premium waiver rider waives off all future premium payments. And the term insurance policy remains active until the expiration date.
  • Income Rider: This rider in a term insurance plan ensures that your family receives regular income + sum insured in case of unfortunate demise of life insured.

Anyone can go for life insurance as it offers some savings after the maturity date, but it doesn't cover the protection of your family . The best term insurance plan is solely designed for taking care of loved ones if something happens to you. Term insurance plans act as a shield between your family and sudden financial fall. They make sure that your family lives a healthy life even after you. With a little amount paid per year, you can be worry-free from the family's financial conditions.

Questions that you need to ask while Buying the Best Term Insurance Plan?

  1. 1. Are you buying a term plan with return of premium?
  2. 2. Amount of premium you have to pay based on your age, habits, education, and monthly income
  3. 3. The total number of benefits covered in the term insurance plan. Do they include benefits that you care about the most?
  4. 4. How to save money on tax if you pay for the term life insurance plan?
  5. 5. Do they offer regular income options?
  6. 6. Can you change the coverage and premium in the future?
  7. 7. Does the claim consider valid if death occurs outside India?
  8. 8. Which kind of death is not covered by a term insurance plan?
  9. 9. Can NRIs take a term insurance plan? If yes, what are the conditions?
  10. 10. Does the term insurance plan have a cash value if you decide to cancel the term insurance policy?
  11. 11. Under what circumstances can a term insurance plan be cancelled?
  12. 12. Can I pay the premiums online or make electronic payments?
  13. 13. What will happen to the term life insurance plan if the life assured starts smoking after purchasing the policy?
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