Term Life Insurance

Term Insurance Information 

Term Insurance is a Life Insurance which provides Insurance coverage for a specific period of years. This type of policy provides a Financial Protection to the nominee/s. These types of policies provide higher amount of life insurance cover at the lowest possible premium payment. These types of policies do not have maturity options, however some insurance companies came up with the options of Return Of Premium (ROP) at the end of policy term. However the premium may cost more compare to the regular term insurance plans. Term Insurance cover is applicable as long as policyholder pays the premium. If policyholder misses the premium payment, then term insurance cover does not come into picture. Here the premium payment options can be taken by the policyholder as per his or her convenience. One can opt for Single Premium, Regular Premium which is equal to the policy duration in years, Limited Premium Payment (LPP) for certain years is another option. There are 24 Life Insurance companies in India and all of them sell Term Insurance products to their customers. Every Life Insurance company has different premium rates as per their calculations of Morality, Life Expectancy, Lifestyle, Education, Profession of the policyholders. 

We can buy Term Insurance policies either online or offline with the help of Financial Planners. A person who neither smokes or drinks get the premium discount, however a person who smokes and/or drinks have to bear with more premium cost. Once one applies for term insurance application, this goes to Underwriting department of that Insurance company. Underwriters decide whether to accept the policy? Underwrites may take following decisions against the Insurance application

1] Accept the proposal at regular premium rates

2] Decline the proposal due to medical reasons

3] Reduce the Life Cover (Sum Assured) 

4] Increase the Premium Cost

If a person is young and earning handsome amount of salary then some companies do not go with the option of medical test of the proposer. However if the life insurance cover request is more and if the age is also at the higher side then proposer will have to undergo a medical test where Underwriters get the details to assess the risk of the life of the proposer. Most of the Life Insurance companies provide the maximum Life Insurance coverage up to 20 times of the annual income of an individual. The rules of Underwriting differ from other Insurance companies. All companies offer additional benefits which are known as Riders such as Permanent Disability Benefit Rider, Double Accident Death Benefit Rider, Critical Illness Benefit Rider etc. All riders come with the additional cost of premium payment.  One should be careful in choosing riders as per the individual needs as taking riders is optional. To take a Term Insurance one needs to prove his or he income by providing the documents such as Salary Slips, ITR, Form 16, Bank Statement etc. 

Some Insurance companies provide their clients with the option of Married Women Property Act (
MWP Act 1874) where the insurance policy indicates that it has been taken for the future of wife and kids. One should check this option at the time of application. This act is of the Era of British Empire, therefore I urge the readers to know more about this before applying for Insurance Policy. You may get the detailed information from Insurance Advisors, Financial Planners, Brokers or Finance Experts.

There are few tips our readers to follow before buying a Term Insurance

1] Try to take a term insurance in early age once we start earning

2] Provide all correct information in the forms

3] Check the riders details and apply for it if needed

4] Try to take Insurance coverage for maximum period, do not take it only for 5, 10, 15 years.

5] Check the Claim Settlement Ratio of that Insurance company

6] Check if that organization has achieved its break ever point ( Maiden Profit)

7] Check the ratings of Services towards the clients

8] Policy can be backdated for the same Financial year, one can take its advantage is his or her birthday has recently appeared. 

9] Fill the correct details of Nominee and update if if nominee dies.

10]  One should take a Life Insurance cover of  12 to 15 times of Annual Income

11] Applying for Term Insurance has to be a first priority if there is any Liability such as Home Loan, Personal Loan or huge responsibilities on a shoulder of a bread winner.

12] Take a proper guidance from the experts and then proceed with the application, do not rely completely on the information received by tele-marketing calls. Fake calls by them can leads towards misleading. 

Thank you for reading, you may share your queries and feedback here. Do not hesitate to dial 9373907560 if you want more information. I urge our readers to follow our blog and our Facebook page too.  

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