Term Insurance is the purest form of life insurance that offers a total financial coverage for a defined period of time. In any emergency or unforeseen situation, the policy perfectly takes care of the financial stability of the insured family. In a term insurance policy, a death benefit is payable to the beneficiary who is generally a family member. By purchasing a life insurance policy, one can secure the family future and help them to live a stress-free life. A term insurance plan offers many benefits to the insured. Let’s check out a few of them:
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Life insurance is an investment or savings plan in which the insured has to pay premiums for a particular number of years and thereafter enjoy life coverage. Life insurance policy is a term insurance plan, which means that these plans are spread over a time called the tenure of the policy. After the end of the tenure the insurer gets a lump sum if she/he survives the tenure. If the insurer does not survive the tenure, then the lump sum is given to the beneficiaries mentioned by the insurer in the policy document. Firms are now offering a variety of Life Insurance schemes ranging from the most basic to well diversified portfolio plans. The most basic plans provide only life coverage whereas plans linked with units or profits offer life coverage as well as bonuses or profits. Investors can choose from a variety of life insurance plans as per their risk return appetites, capacities, requirements and preferences. Why to opt for Life Insurance Policy? By taking a life insurance policy, a policy holder can secure his/her family members even in the event of his/her unforeseen demise. Should a policy holder die during the term of a life insurance policy, then his/her family members can claim the insured amount and benefits if applicable without having to pay further premiums. If the insured survives the tenure, then she/he gets a lump sum after the conclusion of the policy with which the insured can lead a comfortable retired life. Features and Benefits of a Life Insurance Plan Life insurance plans have all the features of a good investment which are:
These days many firms are offering a variety of life insurance schemes so it has become necessary for investors to be well informed and compare schemes which one finds suitable vis a vis one’s capacity, requirements, risk/return preferences, prior to making a tax saving investments commitment. Before finalizing a life insurance plan, it is also important to get information regarding credibility and authorization of the insuring firm and their credit settlement ratio. Other factors for choosing an insurance firm can be relationships with staff, experience of services and such like. Investors should also work out the return on investment of the various schemes shortlisted by them. Also, the policy document should be read carefully and the facts verified if necessary by checking up with RBI guidelines, legal advisor. Investors need to always guard against tricky or trap like clauses in the investment plan and clarify the same. It is advisable to choose policies which are clearly documented without any unnecessary complications. Most policies offer a cooling period, which is generally a period of 15 days and is mentioned in the document, during this period the policy can be thoroughly read and understood and returned if the policy buyer is not satisfied. Other Information Eligibility: one needs to be generally be between 18-65 years of age to purchase a life insurance policy. The maximum age at which cover ceases is generally 75 years. Exclusions: there may be certain exclusions and these are slept out in the document, for example in case of suicide within 12 months no benefits can be claimed only saved/invested sum can be retrieved as per rules. Documents: the documents needed for submission for taking up life insurance policy generally include identity proof, address proof, income proof, and bank statement. Claim process: the appropriate claim settlement forms need to be accessed and submitted after being duly filled with all the required documents. The firm thereafter checks these forms and documents and approves the claim and releases the amount within stipulated time period. |
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