Hint: This is the insurance that will keep your loved ones secure and protected when you’re no longer around.
Term Life Insurance is the simplest form of life insurance where a premium is paid for a certain period of time. In case of an untimely death, a cash benefit is paid to your family or your beneficiary. This secures them and ensures they're taken care of while you might not be around.
Here are some terms you must know about Term Life insurance:
- Claim Settlement Ratio: Commonly known as CSR, it is the ratio of the total number of claims raised in a year and the number of claims settled in a year by an insurer.
- Term insurance premium: The money you pay to the insurance company for financial protection. Premiums can be made in monthly, half-yearly, and annual instalments.
- Add-on benefits or riders: To enhance your plan's coverage, you can add benefits to your plans, such as a critical illness rider, an accidental death rider, or a permanent disability rider.
- Sum assured: The amount of money your nominee will receive in case of an unfortunate event.
- Death benefit: This is the same as a sum assured and is given to the nominee in case of an unfortunate eventuality, like loss of life
Now that you’re acquainted with the terms, we’ve answered the 10 most common questions about term life insurance so that you don’t have to scratch your head.
When is the best time to get Term Life Insurance?
It is better to get Term Life Insurance when you’re younger. You get cheaper premiums, so you’re saving up on a lot.
What situations make it crucial to get Term Life Insurance?
If you have dependents or financial liabilities like marriage, the birth of children, etc., you should get term life insurance. In times of an extreme crisis, your term life coverage will keep your family and loved ones financially covered.
Why should you get Term Life Insurance?
To ensure that your family and loved ones can continue their lifestyle in case of your untimely or sudden death.
When is the Term Life coverage not accessible?
In case of any suicides in the 1st year of the insurance coverage
What happens in case my children are less than 18 years of age?
If your children are less than 18 years of age, the Term Life Insurance Coverage will be dispatched to the assigned guardian.
Can my Term Life Insurance get rejected?
Yes, there are exceptions where outright rejections happen. For example, in case you lied on your application (knowingly or unknowingly), if policy lapsed due to non-payment, in case of death due to criminal activity, etc.
What decides my premiums?
Age and health conditions are some of the determining factors for premiums in the case of Term Life Insurance. How old you are, if you smoke or drink, and if you have other PEDs, like cancer, your Term Life Insurance premiums tend to rise.
Can I save on taxes with Term Life Insurance?
Yes, you can. With Term Life Insurance, you can save taxes under 80C. This can help you save taxes up to 1.5L.
What happens to my Term Life Insurance coverage in case of a non-natural death?
Unless the police investigation is over and closed, the Term Life Insurance coverage amount isn’t dispatched.
What’s a free look-up period?
Depending on the service provider, you can have a free-look-up period of 15 or 30 days and revoke the Term Life Insurance coverage you purchased.
Now that you have all the reasons to get Term Life Insurance, are you wondering where to find the best coverages?
Get in touch with our team of financial advisors who are here to help you discover a tailored, customised coverage plan after we analyse your financial & physical aspects and life goals.
Book a consultation with us now.