Life is very unpredictable; you never know what is going to happen in next few hours. This is the sole reason why we always plan to take insurance policy and cover all sort of contingencies. If you have dependents, you need insurance which will give you confidence that after you, your dependents will easily be financially protected through the cover of policy. Life insurance is a good way to protect your dependents and term insurance is the best and economical option in it.
Term insurance is gaining huge popularity in last few years. Since companies have dropped the premium rates, they advertise these policies in big way. Also, companies have started online option to get the term policies which proves to be very convenient while buyers can compare and choose their own term plan. Rs 20 in today’s picture are not sufficient even to buy 2 kg of vegetable but it is an adequate amount to buy a term insurance policy with a cover of Rs 49.99 Lac for a day.
Today, financial planners challenge that a term policy is the best type of insurance as it provides a high cover at low cost. The amount of premium you pay is merely a fraction of amount which you have to give when you purchase an ULIP or a money back policy of same coverage. The reason behind huge coverage of term policy is that there is no investment component attached with it and the whole premium goes to cover the risk. Before purchasing any term policy, here are 5 steps you should look at:
Amount of cover you need?
The cover of life insurance means the amount which dependents of policyholder require to replace his earnings in case of his death. Always keep in your mind before buying term policy that your cover should be enough to cover basic expenditure, key expenses like marriage of children and other accountability like loans if any of the dependents. If the amount of cover is insufficient, it thrashes the whole objective of insurance. For example: Mr. Rahul, bread earner of his family has taken a term policy with cover of Rs 30 Lac has taken additional10 Lac for his remaining home loan which he has recently taken. So, always take the insurance with the sufficient cover otherwise it will create lot of problems to your dependents.
Till when you need cover of insurance
Knowing the actual tenure