One of the first things that you ought to get yourself when you become financially independent is a term insurance plan. A term plan is a very basic form of insurance plan. It is a worthy tool for financial protection. It provides you with a large sum assured at a low premium cost. Nowadays, some insurers have even started providing lucrative options like return of premium, a factor that eluded most term plans and discouraged people from them earlier. Of course, term insurance tax benefits are another encouraging factor.
When you are looking for term plans, you get a quote with various components such as the type of cover, options, and some statutory additions. Here are a few things to keep in mind for evaluating a quote you receive from a potential insurer.
With age, your health risks increase, which is basically increased risk for your insurer. This makes them increase your premium amount. It thus makes sense to buy a term plan as early as possible. However, later is better than never. Since term plans generally carry lower premium rates, it won’t come as a huge blow to your financial planning.
Base premium, as the term suggests is your basic amount of premium, minus taxes and minus riders. This amount is usually lower for online term plans than for the offline ones, thanks to a saving in distribution costs for the insurer. The base premium of a term insurance plan depends not just on your age, but also on your gender and your smoking habits. Since smokers carry much bigger health risks, the premium goes up for them. Whereas if you are a non-smoker, you could be rewarded with a lower base premium.
Riders are additional covers to your basic plan. The different riders that you can pick from include accident cover, critical illness cover, disability cover, etc. Your choice of riders should depend on your lifestyle. For example, a Child Support Benefit rider makes sense for couples with children.
Your total policy cost depends on your policy duration too. This duration depends on the following factors.
You can take advantage of the following term insurance tax benefits, and factor them into your financial planning while evaluating quotes.
Every plan has a Policy Lapse clause. If you do not pay your premium within a specific duration from your due date, you lose policy benefits. You can then revive your policy by paying some charges. It is crucial to take them into consideration while choosing a policy.
Every company won’t mandatorily ask you to take a medical test. However, it is always advisable to take on nevertheless. If your test shows you in good health, your term insurance premium can reduce. If there are health problems that aren’t revealed at the right time, it may cause a problem with claim settlement later.
It would be best to take your time with policy quotes and compare them to select the one that suits you best. It is very easy to do it online. Remember that the claim settlement ratio of the insurers you consider should be at least 90%.
Make sure that you look beyond just term insurance tax benefits and evaluate the entire quote in detail, compare quotes, and choose a plan wisely. After all, it is an investment of a lifetime that is going to benefit your family even after your lifetime.
iSelect+ Term Insurance Plan
You can check out a flexible plan like Canara HSBC Oriental Bank of Commerce Life Insurance's iSelect+ Term Plan. This plan can be customized to suit your individual needs - there is a variety of add-on covers ranging from child support to accidental death benefits. You can choose to receive the income in a lump sum form, a monthly form or a part-lump sum/part monthly form. This is a plan that this built for your utmost comfort and convenience.
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