Term Insurance and Its Market

So, you have made up your mind and want to avail term insurance. Good; your family’s financial future is undoubtedly secured. But, before you take up any term insurance policy available on the market, you should check out the different plans being offered by the various life insurers and then choose a one that suits you the best.

Should A Senior Citizen Get A Term Insurance?

Term Insurance is crafted to benefit the person who earns money within a family and dies when the family needs them the most. So, the best time to buy the policy is when the person is still young. At one age, the premium amount rises drastically. Some companies also stop providing insurance to people over 65 years of age.

Even after all these problems, a senior citizen should buy the term insurance online regardless of the high premiums for the following reasons.

  • If you don’t want to leave your spouse dependent on somebody then you must surely buy the policy. It might not cover the loss of the loved one, but it will undoubtedly cover the loss of income. They are a good option if you haven’t made any other arrangements. This will help your spouse to live his/her life with self-respect and peace even when you are not there.
  • In case your children still depend on you for financial support such as college education fees then you should get the policy irrespective of the higher premium. In case of your sudden death, you will ensure that they are financially supported until they can earn by themselves.
  • Another situation where you might need to invest in term insurance policy is when your debts are still unpaid. If you don’t want to leave your family with an additional financial burden due to the borrowed money, then you should definitely invest in term insurance plans.

Term Insurance and Its Market

So, you have made up your mind and wanted to take term insurance. Good, your family’s future is undoubtedly secured. But, before you take up any policy available on the market, you should check out the different plans being offered by the various firms and then choose a one that suits you the best.

What Are the Factors That Make Term Insurance A Good Option?

Taking term insurance is not only a way to secure your family’s future in case of your absence; but specific policies help you in the future along with your loved ones. To help you, is a list of things that you should consider before buying insurance.

  • Low premiums

The premium amount in case of term insurance is a lot smaller than other policies and investment schemes. Here is an example, if you are currently 30 years old and want a plan for the next 20 years, worth 10 lakh, then all you need to do is spend ₹3000. In comparison to this an endowment policy worth the same amount and benefits will cost you around ₹30,000. In case of additional benefits, this policy could cost you anywhere around ₹50,000 per annum.

  • Tax Benefits

The endowment class of insurance is considered an excellent option, thanks to additional benefit from section 80C of the Income Tax Act, due to the higher premium. The income received on maturity is also tax-free. The Term Insurance policy is also eligible for section 80C under the Income Tax Act, 1961, and the difference in premium can be invested in other schemes like PPF.

  • Pricing

The Term Insurance policies are more or less structurally similar and therefore can be compared by price solely. This means that there is a lot of competition among the firms as information is readily available to the buyer and therefore the companies need to battle at providing the best prices to their customers.

  • The flexibility of the policy

In the case of Term Insurance, it is a lot easier to come out, when compared to other cash value-based policies. If you stop paying the premium, then the risk cover is revoked, and the procedure ends. As there is no savings element in the policy, you receive no payment.

Whereas, cash value policies give you the benefits only for the full tenure. If you stop paying the premium, there will be a net loss for you. You will get only a part of your savings due to certain deductions.

Limitations of this policy

Conclusion

So, it is true that as you grow older, the health risks increase and so do the insurance premiums. But if you want your loved ones to live without any difficulty after your death, you should get term insurance at the late stage as well, even though the best practice is to spend on the policy while you are still young.