Term Insurance plan variants

Even though there is increase in educational literacy rate there is lack of financial literacy, due to which large number of populations remain uninsured or under-insured.   

Everybody especially the primary bread earner needs insurance cover to effectively replace his income and for settling their liabilities. The cost of insurance cover escalates with every delay in purchasing the insurance plan.Term Insurance Plans are cheapest pure insurance plan for income protection. However, there are many variants of Term insurance plan to suit the need of different individuals.

  1. Single premium:  It is suitable for self employed people who do not have fixed income and are financial savvy.
  2. Limited paying term: for those who may not be able to pay premium in later years. The insurance cover will continue for the extended period of time. Suitable for those who want to start their own business after working for few years.
  3. Return of premium: For those who thinks insurance premiums are waste of money.  Ideally one should not expect return of insurance premium.  However, It make them buy the insurance cover they need.
  4. Increasing cover: To fight the inflation.
  5. Accidental death rider. For extra cover at low extra premium.
  6. Extended life cover:  For those who want cover liabilities during retirement.

How to choose best suited plan?

First, determine the amount of cover needed.  The insurance cover we need as per financial thumb rule is 15-20 times your annual income, for those under 40 years of age and for those who are above 40 years of age, 10 times your annual income is the required cover. The rule may be tweaked taking into account other factors like our outstandingliabilities, number of dependents, future goals and desired lifestyle.

Second, choose the insurance company with good claim settlement record.

Third, choosing the right tenure.  Companies offer long term insurance cover till the age of 100 year.  However, it is recommended to take cover till the age of 60-70 since most of the liabilities are cleared till that time.

Take right financial decisions!!!

For further information dial 9930901086, email to moneyacts@outlook.com or click the link below and get response.

https://docs.google.com/forms/d/18fV4jd5us0nH-gTjJr4NH7oBsTwzERvuFgtbw5sFePg/edit

Kishore Hegde

CFA (ICFAI)

Be wise, moneywise!

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