Term Insurance

Term Insurance.

As defined by name Term insurance is risk cover for a period of time.

Term Insurance is best insurance plan, As there increasing nuclear families, every family behave like a alone tree, and each tree (family) has a one strong stem (the bread earner) and other members as branches of the tree. In Joint families there are many bread earners like father, uncle and sometime grand-father too.

But the Term Insurance is for every bread earner of the family. As a bread-earner, the head of family has to maintain funds for his family’s bad and good time, future and past plannings, and has to stand his family in all conditions, he can’t let it down at all.

Life and Death are two faces of a coin, both are universal truth. In our most advance medical science, we can determine and control the date and time of birth but still can’t control death according to our requirements, and we are still in uncertainty about the life of us.

No body knows date and time of his death, it could be game of few seconds, and no body can do everything for his family in a moment. After his (bread earner) death, he want that at least his family be financially independent. And with the concern in mind, Insurance Companies has an Unique Product Term Plan. 

What is Term Insurance: Term insurance is pure insurance which is best insurance among the insurance industry, with lowest investment highest risk cover. Term Insurance is the cheapest insurance in the insurance industry. Term Insurance starts as low as premium with Rs 15 per day for Rs 1 Crore (premium depends upon the age of insured person).

Who Can take Term Insurance: Any earning person can take Term Plan and secure his family, but he has to submit valid income proofs to calculate his human life value by insurance company. ITR is most preferable document to take Term Insurance.

Which earnings can’t be consider : Only income from Job/profession/business can be consider for your income. Rental income, income from Interest and any other income which is not due to your profession will not be consider as your income to calculate your Human Life Value by insurance company.

How much Coverage : Normally Insurance companies offer 22 times of annual income as coverage of young person, then after there is grid as per IRDA norms.

Is housewife can purchase Term Plan : No, only earning person with valid income proof can buy Term insurance.

Father/Spouse can purchase: No, in term insurance, proposer and insured should be same person, it can’t be purchased by any other person, as coverage is very very high there may be involvement of crime, so Payor/Proposer/Insured can’t be different.

Maturity Benefits: No, there is no maturity, only death benefit there.

Types of different Death Benefits:

  • Level Death Benefit – Death Benefit will be same from day one to entire term.
  • Level Death Benefit with monthly income – Death Benefit will be same from day one to entire term, with monthly income to nominee per the T&C specified in plan
  • Increasing Death Benefit – Death Benefit will increase by 5% per year or as per the T&C specified in plan
  • Increasing Death Benefit monthly income – Death Benefit will increase by 5% per year, with monthly income to nominee per the T&C specified in plan

here premium will never revise for entire Term, you will pay same premium for entire term.

Amit Saxena

Financial & Insurance Consultant
MaxLife Insurance Co Ltd & MaxBupa Health Insurance

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