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Monday, October 23, 2017

Term Insurance: Your Tag Team Partner

Term insurance is the purest form of life insurance.It doesn't accumulate the premiums paid by you. The insurance company is liable to pay only when the insured dies during the currency of policy.

An insurance policy that takes care of your family in your absence is just like a tag team partner that takes on your responsibilities once you are no more. It is that friend that stands strong with your family and strives hard to lessen the burden of your death on them. Term insurance should be a key financial instrument you should have in your kitty to make sure your family sails through the journey of life smoothly even when you are not there to row the boat.

Term policy is a contractual and legal relationship between you and the life insurance company in which you promise to pay a lump sum or periodic premium up to a certain time period (term) to the insurance company and in return the insurance company promises to pay a lump sum amount or/with/without monthly income to your nominee in case you die within the policy period.

Death of a dear family member is often regarded as one the most dreadful pains this world offers. This pain is even sorer when the family depends on the earning of the dying person. Financial problems as a consequence of such death disturb the balance and lifestyle of the family. Even more ghastly situation arises when there are pending loans on the family.

We all understand how dubious life is. No one wants their families to go through such hardships. To avoid this fate compare term plans online. Study, research, scrutinize and juxtapose plans of scores of life insurance companies to know about the various features, premiums and service scope of these plans. You might save a lot of money by comparing properly. It is always advisable to get more number of quotes to have more favorable chances of getting a good plan and cheaper premium rates. Not to forget a term insurance plan in general is a long term contract with the insurance company. You would want the premium to be easy on your pocket.

Speaking about ease on pocket, you would be glad to know that these term plans also offers attractive tax benefits. Up to Rs.15000 of premium paid is deductible from the taxable income under section 80C of the Income Tax Act, 1961. Not only this, the proceeds from the insurance company in the form of claims are also fully exempt from tax under section 10(10)D of the Act.

Few Insurance companies offer a range of added benefits or extra toppings on a regular term plan for an extra premium called riders.

Popular Riders Available in the Market Are:

  • Critical Illness Rider: Under this rider the insurance company pays a lump sum amount to the policyholder if he is diagnosed of a dreadful disease listed in the range of diseases covered by the insurance company as critical diseases. The money received from the insurance company can be very vital to take required treatment.
  • Accidental Rider: Under this rider the insurance company pays up to twice the sum assured to the descendents or nominees of the policyholder provided the latter dies because of an accident. An accident can be any violent incident caused by an impact from an external and visible object.
  • Disability Rider: Under this rider the insurance company pays a portion of the sum assured to the policyholder in case he encounters a disability in his body.

There are a dozen of other riders or extra features that different insurance companies are selling. With the insurance market now open to private and foreign players, they are bringing lots of innovative features to stand market competition.

Study more and more plans to make a smart purchase. You don’t want to miss out a lucrative plan and settle for a mediocre one. It is recommended to use services of various online insurance comparison portals available online. These specialized portals without charging any fee provide a convenient and unbiased insurance compare space. They highlight the key features of top plans available in the market to make comparison easy.



About the Writer

Akanksha Agrawal is a writer for BrooWaha. For more information, visit the writer's website.
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