How To Choose A Nominee For Your Term Plan?
A term insurance plan is one of the most important financial investments in your life...Read Article
A term insurance plan is an affordable life insurance cum protection plan that you should buy as soon as you start earning. The younger you start, the better it is – as, premiums of a term insurance plan increases with age.
This is the first question you should try to answer before generating term life insurance quotes online. Your cover amount should help your family meet the following expenses after your untimely demise:
Generally, an amount 10-15 times your annual income is sufficient for your family to maintain their standard of living and meet their financial needs. However, you can add or subtract depending on:
(+) The other financial needs you have apart from the three
(-) Existing life insurance cover
Another important factor is the policy term for the life cover. The minimum term for which your family will need an umbrella is till your retirement age. For example, if you are 30 years now, your family needs a life cover for the next 30 – 35 years.
By the time of expiry of the online term plan:
Still, you can consider a term plan till the age of 99 if you wish to leave an estate for your children or grandkids.
You are considering an online term policy so that your family can survive and remain financially independent even if something happens to you before time. Although receiving a large sum of money sounds like a good start, you can ease your dependents’ financial troubles even further.
Your family will need to look after two types of financial decisions:
You can divide the benefit amount of your term insurance plan in such a way that your family receives a small sum every month as regular income and a large lump sum. With their regular income need taken care of, they can simply use the lump sum for their future and pay off their debts.
A life insurer’s track record is going to have a long-term impact on your policy. Remember that term life insurance plans are long-term plans which may continue for decades before you or your family will even need them.
You have to pay attention to how the insurer engages with their existing policyholders:
All of these options and channels will help you continue your term insurance plan for decades without hiccups.
The proof of concept for an insurance policy only shows up at the time of claim. An insurer with a robust claim settlement ratio means the insurer has a smooth claim settlement process. This means, your family is more likely to have an easier time with the insurer while making a claim.
Canara HSBC Life Insurance has maintained a 95%+ claim settlement ratio for more than 5 years, with the current ratio being 98.57% for FY 2021-22.
A term insurance plan is supposed to offer adequate financial safety for your family over a few decades. Thus, you must look at the necessary features which would keep the policy beneficial for the longest period:
The longer the better, with the minimum limit allowing you to hold the cover for at least five years after retirement.
You can do away with a lifetime of regular payments and even get a discount on premiums by paying them in a shorter time, provided the policy offers the feature.
The death benefit from a term insurance plan should help your dependent look after their lifestyle and goals. The regular expenses related to lifestyle are the most difficult to manage. Thus, regular income mode of death benefit pay out helps the family more.
Your financial needs and responsibilities will only grow in life, at least, until you retire. Thus, your online term insurance plan should have an option to increase the cover as your needs grow.
You only need to submit digital copies of the relevant documents while buying online term plans. Although you can save the online form and come back to complete it later, it's best to complete it in one go and secure your term cover sooner.
Here’s a list of documents you should keep handy while buying an online term plan:
Always have a look at the add-on covers available with the online term plan. These added covers or riders strengthen your term cover umbrella and offer wider coverage to your family. Some of the most prominent riders to add to your online term plans are:
Provides financial assistance in a lump sum and regular income mode if you are diagnosed with a life-threatening illness like cancer, etc.
Learn more about Critical Illness Insurance.
Accidental riders offer additional financial assistance in the case of death by accident. These riders are available in the following forms:
If you met with an accident and suffer from a permanent disability, all future premiums for your term life cover will be waived off.
The insurer will pay the selected sum assured in the case of accidental permanent total disability to you. A similar additional benefit can be added to the death benefit under term insurance for death due to an accident.
Apart from critical illness and accidental riders, term insurance plans can have few other riders. These riders can allow you to pass on a financial benefit to specific family members, for example, children.
Online term insurance plan premiums depend on the mortality rates for the age. Usually, the mortality rate increases with age, especially after 60. Additionally, the risk of illnesses and injury also increases with age. Thus, premiums of a term life insurance may increase anywhere from 4% to 12% every year increase in age.
Thus, with higher age, your premiums may increase considerably for the same sum assured amount. However, you can lock your annual term insurance premium at a lower rate if you buy the cover during your younger years. This is why buying a term plan at a younger age is financially more beneficial.
Yes, the premium you pay for the online term plan is eligible for deduction from your gross total income of the year under section 80C. The maximum deductible premium amount will be limited to the section 80C limit as defined by the annual Union Budget.Read More
You will need to submit the following documents while buying a term plan online:
Smoking and drinking are lifestyle habits that may increase your risk of getting a life-threatening health issue. Thus, smoking has a direct impact on your base premium cost of the policy. Drinking habits may affect the premium only if you are a regular consumer of alcohol.Read More
Yes, you can buy any amount of term insurance plan online, provided you are eligible for it. Your maximum eligibility for a term life cover depends on your annual income. The maximum term insurance cover for you can go up to 25 times your annual income.Read More
An online term insurance plan will cover all deaths, except for the suicide death within 12 months of the policy inception. If you have added riders like accidental death or disability in the policy, these riders may not work in certain other cases as well.Read More
The online term insurance calculator is a free online tool, which lets you assess your online term plan premium for various features and policy terms. You can modify different benefits and premium payment terms to arrive at the most suitable premium vs benefit combination for your family before filling out the application.Read More
Critical illness rider is an add-on cover available with your online term plan. With this rider you can:
This rider ensures that you have adequate financial support to fight dreaded diseases and manage your household while you are at it.Read More