Basics of Term Insurance |
Posted: June 30, 2016 |
Ever thought about your dependants? How difficult their survival would be after your demise or any permanent physical disability due to an unexpected situation. Your future financial and life stag goals remain questionable in this case. Although a regularized fixed income does a lot bit of the plans made for the future. But in case there is any hindrance in the flow of income and the savings aren’t huge yet, any mishap makes it difficult to meet the living expenses and fulfill the future financial needs. What is a Term Insurance plan? A Term Insurance plan is a limited period life insurance plan which is taken for a fixed period of time. The key feature of a term insurance plans is available for a fixed period of time. Further extra coverage can be added to a term insurance plan. The benefits of a term insurance plan can be availed on the unexpected event of death of the insurance holder. A Term Insurance plan is available with most of the life insurance service providers with a plan tenure of 5/10/15/20/25 years and so on. The best feature of a term insurance plan is that they are easily convertible into a whole or a permanent life insurance plan. The solution to a secure life for your loved ones and family members is an affordable Term Insurance plan which provides higher coverage at lower costs. Additionally, a term insurance is convertible in to whole life insurance. All you need is good Term insurance plan specially structured as per your life needs. Your best term insurance plan is uniquely structured to give your family the financial security in your absence. It takes care of the financial expenses of your family and loved ones. Since, it is absolutely impossible to be sure about the future and predict the uncertainties an individual can almost plan for them. While, we have sound set of reasons to buy a term insurance plan now, it is the time to make the planning of the insurance plans. Points to consider: Benefits of maintaining a healthy lifestyle: There are some insurance companies that have structured their insurance plan into smoker and non smoker category. These insurance plans charge the insurance holders higher premium amount from the insurance holders who frequent tobacco users. Hence, this also means that the premium amount for the non tobacco users will be comparatively lesser than the tobacco users. Term insurance plans hence proves to be beneficial for the non tobacco users. Death on Terrorist Attack: A Term Insurance plan provides coverage for all types of death instances that can be for any reason; this also includes death due to a terrorist attack. If you want to cover yourself under death by terrorist attack also then before buying the term insurance plan you should also check whether the insurance company provides such benefit or not. Rider Benefit There are various insurance companies that provide the benefit on accidental death, terminal illness, and critical illness. These rider benefits are added to the insurance plans with additional top up value. The rider benefits are added to the basic insurance and the basic plan still remains claimable in case the rider benefits are used up. The rider benefits are extra additional feature to the insurance plan which is mutually agreed in the insurance contract. Convertible Plan: There are various insurance companies that provide the option of converting the insurance plan from a term life insurance to a whole life insurance or a permanent life insurance. These term insurance plans can also be converted to a endowment plan or a money back insurance plan etc. A convertible insurance plan benefits is the best during the policy tenure when the insurance holder feels that the insurance plan is of no use to him. Hence, in this case the insurance holder is free to switch his insurance plan to one he feels is the best for him. Plan Renewal: Every life insurance service provider mentions the eligibility age upto when the insurance plan can be renewed. During the policy tenure generally the plan cannot be renewed in the initial and the last year of the term insurance plan. There 2 important criteria that has to be considered before renewing the term insurance plan which are the maximum age limit and within the policy tenure. Company Claim Settlement Ratio: The claim settlement ratio is another important factor that has to be kept in mind by the insurance holder before choosing his insurance provider and the insurance plan. A claim settlement is the ratio at which the company settled per 100 claims received. This indicates that a company with higher ratio of the claim settlement is capable of settling them better, eg: XYZ Company has a claim settlement ratio of 99%, this mean the company can settle 99 claims per 100 claims received. This claim Insurance Solvency Ratio: The solvency ratio of the life insurance company is also amongst the important points to keep in mind before choosing the life insurance plans and product. This ratio explains how able the insurance provider to is in terms to meet any unforeseen situation like company solvency etc. Think smart, act early, choose your term insurance plan keeping the important factors in mind.
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