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Why are term insurances considered as one of the best forms of investment?

dateKnowledge Centre Team dateFebruary 09, 2021 views144 Views
Why are term insurances considered as one of the best forms of investment?

The simplest and least expensive choice for life insurance protection is Term Insurance. Term insurance plans are life insurance plans that provide the maximum amount guaranteed and cover life loss. Under the plan, there is typically no financial benefit to be received. Term plans provide pure methods of protection. It is better to have term plans than other life insurance plans. It is possible to view term plans as luxury insurance plans. Multi-life term plans vs other life insurance forms.

Insurance terms are, in effect, sub-institutions of life insurance schemes. Term insurance is a policy that ensures that your family in your absence is financially stable and secure. If any individual is insured under this policy, they will pay a specific amount at fixed intervals. However, if the life insured dies at any point in time, and the assured amount will be given to the nominees selected by him or her during the policy's time of purchase. Term insurance is the most efficient form of insurance that provides the insured person and their family with financial protection in the event of sudden death.

Who would benefit from term insurance?

A term plan is low-cost life insurance that's relatively affordable. A life insurance policy provides financial stability to the family when a breadwinner is lost.

You should opt for Term Life Insurance if you are a:

  • Breadwinner.
  • Single-parent household, with one child
  • A homeowner with a mortgage applied for.
  • A business owner with debt, loan, or interest.

Key Features of Term Insurance Plan

Term policies are insurance plans specifically designed to cover the basics with death and disability. Under the policy, family/dependents of the life insured are eligible for a lump sum amount in the event of the death or critical illness (if applied for) of the life insured during the policy's tenure. Let's consider the key features of this term being defined.

  • Price-effective
  • Getting term insurance coverage is extremely cost-effective and does not result in people spending money out of pocket. A term plan provides instant insurance alternatives which are easy to purchase at any given time. The term life insurance premiums for life insurance are low in comparison to other products.

  • Easy to buy
  • Purchasing a term insurance policy is a much less tedious task than buying the same product over the phone before undertaking a term policy. It is recommended that conduct a thorough review of the same, and only a decision can be made to invest in an online term insurance policy.

  • Long-term protection
  • Choosing the right life insurance plan ensures that your family is protected from financial emergencies. One may select a term life cover from the age of 25-50.

  • Convenience of payment options
  • One can easily budget for monthly, quarterly, or annual term plan premiums with the rationale that it's convenient.

  • Travel Benefits
  • One can either choose to take advantage of promoting riders or insurance plans.

  • Additional Rider Benefits
  • Additional benefits such as critical illness insurance and insurance against accidental death are available under the term policy. The benefits can be added to the term plan in the form of a premium. The best term plan in India sports a lower price than what individuals seek with such coverage pay. Review various additional benefits available for your term insurance plan at our website. Select the plan comparison tools that best demonstrate the extra services you need.

    The reasons for buying Canara HSBC Oriental Bank of Commerce Life Insurance :

    • The Low-Cost Family Protection Plan - Provides very low-cost coverage to your family.
    • Rewards for living a healthy lifestyle, exciting special discounts for people who don't smoke.
    • One may choose an option with a monthly or annual premium.
    • Riders – optional, to help support the policy.
    • Companion coverage for the same policy.
    • Discount for women.
    • Tax deductions, tax exemptions under Section 80C and 10 (10D).

Types of Canara HSBC Term Insurance Plans

Canara HSBC Oriental Bank of Commerce Life Insurance provides variable term or fixed term insurance. Term Plan is a pure protection plan that provides financial security to your family and the option to secure an income to support the family even during periods of unemployment.

To obtain the sum assured that you need, you may increase your responsibilities. Your policy sum assured increase by 25% after every 5th policy year. The housing fee can be increased from 100 per cent to 200 per cent or from 200 per cent to 300 per cent.

For instance, the first policy year is worth Rs. 50 lakhs, at the end of the second policy year, increases to Rs. 1 crore, and after that, it remains constant until the end of the policy term. So, you get a Rs. 1 Cr term plan.

Claims processing process of Canara HSBC Oriental Bank of Commerce Life Insurance term plan

1. Claims reporting

  • Fill out the Online Claim Form to officially document a death.
  • Go to the nearest branch or office, fill out the form, and take a picture with identifying documents.
  • A prompt pays out on claims registration.

Documents that are required, along with the completed application forms:

  • Official policy document.
  • Official death record from the municipal authorities.
  • A copy of the bank passbook/ cancel cheque.
  • Hospital / Treatment Records
  • ID matching proof and residence proof of the claimant.
  • Post-mortem & chemical evidence report (if performed)
  • Medical Statement.

In case of death caused by unnatural causes:

  • Police reports (FIR, Panchnama, Police investigation report)
  • Newspaper clippings (if applicable) (Detailing the incident)

2. Litigation Settlement:

After checks and balances have been made on the claim, payment will be made to the claimant.

Why should you choose Canara HSBC Oriental Bank of Commerce Life Insurance?

Canara HSBC Oriental Bank of Commerce Life Insurance Company Limited is the first Life Insurance Company to launch "Immediate Pay-out on Death Claim Registration" wherein they pay the Fund Value to the claimant on registration of the claim. In 2016, the company was conferred with "The Economic Times Best BFSI Brands 2016" award in the Life Insurer category, which clearly shows that the company is customer-oriented, be it the customizable products, the needs or the claim settlement process.

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Frequently Asked Questions (FAQs) for Term Insurance

This being a term 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 70 years of age.

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.

If your key purpose is to give your Family financial protection, go for the term insurance plan. And if you want some savings, in the end, go for a traditional life insurance plan.

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, a term plan pays a part of the sum insured to treat your disease.

Term insurance 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 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 policy remains active until the expiration date.
  • Income Rider: The rider 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 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 Term Insurance?

  1. 1. Amount of premium you have to pay based on your age, habits, education, and monthly income
  2. 2. The total number of benefits covered in the term plan. Do they include benefits that you care about the most?
  3. 3. How to save money on tax if you pay for the term plan?
  4. 4. Do they offer regular income options?
  5. 5. Can you change the coverage and premium in the future?
  6. 6. Does the claim consider valid if death occurs outside India?
  7. 7. Which kind of death is not covered by insurance?
  8. 8. Can NRIs take term insurance? If yes, what are the conditions?
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