What is term insurance? How does it provide financial security?
Term insurance is a type of life insurance that provides financial security for your family. It's a great plan for the future, and getting term insurance at a young age reduces premiums.
FollowTerm Insurance: This is a type of life insurance. A person can take this policy up to the age of 99. If the insured person dies during this period, the nominee will receive the sum assured. This protects the family from financial problems.
Key Features:
This insurance is for a fixed term, such as 10, 20, or 30 years.
Term insurance premiums are lower than whole life insurance premiums. You can choose the premium amount and duration according to your needs.
Benefits:
If the insured person dies suddenly, the insurance provides financial security for the family. Term insurance plans are easy to understand and manage.
Drawbacks:
If the insured person survives, the premium cannot be refunded. The benefit is available only after death, meaning it goes to the nominated family member.
Get term insurance at a young age with low premiums:
As age increases, health problems may increase, and premium costs will also be higher. Therefore, getting term insurance in your youth reduces the premium. So, you should get term insurance as soon as you start working.
Family Protection:
If you are the primary earner in your family, you can provide financial security by taking term insurance in advance. This ensures that your family does not face any financial problems or crises after your demise.
Importance of Health:
If you are young and healthy, companies will offer you insurance at a better rate. Risk increases with age.
Savings Habit:
Taking term insurance also helps develop the habit of saving. It's a great plan for the future.
Premium:
When you buy term insurance, your premium amount is fixed. The premium amount will not increase in the future for any reason. This is also a major advantage of term insurance.
Choose a premium keeping your financial needs in mind.
Calculate how long you need coverage, from children's education to home loans.
Get a tax deduction under Section 80C on the premium.
Carefully read the terms and conditions of the insurance policy.
Check the company's reputation, financial stability, and claim settlement ratio.
Who is not eligible for term insurance?:
Death while driving under the influence of alcohol
Suicide
Death due to drug use or self-inflicted injury
Death due to involvement in criminal activities
Death due to natural disaster
Death due to riots, war, or violence
Death during trekking, scuba diving, or auto racing is not covered by this insurance.
Premium Calculation:
A woman at the age of 30 taking a premium for 25 lakhs will have to pay 269 per year
A man at the age of 30 taking a premium for 25 lakhs will have to pay Rs. 279 per year
If a woman takes a premium for 25 lakhs at the age of 40, the monthly premium is Rs. 359, and for a man at the age of 40, it is Rs. 413.
If the premium is for 50 lakhs, a woman has to pay Rs. 385 per month, and a man has to pay Rs. 412.
If the premium is for one crore, a woman at the age of 30 has to pay Rs. 529 per month, and a man has to pay Rs. 579.
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