New Delhi, Santosh Aggarwal. Are you thinking of buying a term life insurance plan? Before taking any decision , be sure to know how beneficial an insurance plan will be for you and your family. According to a recent survey , most people buy term life insurance plans for saving tax and death benefit. There is no doubt that term life insurance is a better way to save tax. And it also protects your family’s future. Term life insurance takes care of your family after you leave. It provides financial help to your family in difficult times. It is important for all of us to understand that life insurance is a bond of trust.
Before finding out or buying a term plan , it is very important to understand what you really want from the policy. Remember , life insurance is an important financial product , so you will not want to make any mistake while deciding. To help , here are some of the important tips , which you should pay attention when you buy term life insurance.
Number to calculate the sum assured
How much amount of term life insurance do I need? This is a question faced by every person who thinks about buying a term life insurance policy. There is a basic rule for this, the death benefit of your policy should be 7 to 15-20 times of your annual salary. But like any other basic rule, it is not always perfect. It is important here that you must ask the insurance company what will be taken into consideration to consider your sum assured. Never trust everything stated by an insurance company. Make sure that the company is arguing whether it suits you or not. There is also another way to find out how many assurances you need. Think about how much income you want to pay for your spouse or family in your absence.
Choose the appropriate policy term
After you have decided the sum assured, the next big step will be to decide how long you need the assurance. If you want your spouse to send children to college and your family enjoy a comfortable life, even if you do not have an income, buy term insurance for the period you feel you will be working or money Will keep earning For example, if you are thinking of working till the age of 65, then you buy a cover that will provide you with the cover till then. If you want to work till the age of 70, then you should buy a plan that keeps you covered for 70 years. Always discuss your circumstances and plans in detail with your insurance company. This will help you in finding the proper coverage. If you are thinking of a will and want to leave something for your legal heir, So you should invest in a full term life insurance plan. This plan gives you cover for 99 years and above.
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Think about the pay-out option
In the beginning , life insurance was considered to be the simplest financial product as it paid a lump sum to their beneficiaries on the death of the insured. However , things have changed a lot now. Insurance companies have started offering several payment options. The objective is to provide equal assurance to the beneficiaries through various options as per their benefit. Apart from the regular lump sum payment plan , the beneficiaries can also opt for a separate payment plan ie pay-out. He can also customize the plan according to his special needs and requirements.
Various options have made it easier to understand term plan payment. For those dependents , who can not take major economic decisions , better option to pay in installments for them. In the option of payment in installments, the beneficiary receives a part or percentage of the total sum assured as a lump sum and the remaining amount is provided as a monthly payment in a pre-determined period. Generally this period is for 15-20 years.
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