Life insurance is one of the most important investments that can be made by any individual, providing a financial safety net to a policyholder’s family and beneficiaries in the event of their death.
Traditional life insurance policies provide protection based on periodic- often monthly- payments of a sum referred to as the premium amount. They generally offer investment options and were solicited in the past as a means of providing financial security as well as generating savings through the investment of premium payments. However these types of policies require relatively large premium payments due to their potentially long tenure.
Term insurance plans are becoming increasingly popular for this very reason. Conventional term plans can be described as the most unalloyed form of life insurance, providing protective cover in the event of the policyholder’s death for a fixed period of time. The duration of term plans can vary anywhere between 5 to 40 years, or longer depending upon the age of the policyholder and the insurance provider. They also usually require a medical examination prior to their issue in order for insurance companies to assess the risk they take on with each policyholder, with respect to any pre-existing medical conditions and their overall lifestyle. Term insurance generally requires smaller premium payments while offering similar or greater amounts of coverage when compared with traditional life insurance plans.
Picking a policy that suits your needs in the long term is crucial to get the most out of term plans. Ensuring that you account for liabilities such as existing debt when choosing your coverage amount, as this will allow your family members to avoid such burdens in the event of your passing. It is best to choose a coverage amount equal to or greater than 15-20 times your annual household expenses. It is also vital to account for your age at the time of soliciting the policy with respect to the number of years you will be expected to remain in the workforce. Additionally, purchasing term insurance will be easier when you are younger as you will likely be regarded as a lower risk investment by insurance providers when compared to older policyholders. It may also be cheaper to purchase policies online as brokerage charges are often absent in such cases. Opting for the iSelect Term Plan from Canara HSBC Oriental Bank of Commerce Life Insurance , will give you a variety of options such as whole life cover, premium return and short tenures of up to 5 years to ensure your family’s financial security in any situation.