We are trying very hard to make savings which could come handy as the economy of our nation India continues to steam ahead. An effective financial planning is needed to consider your financial requirements and goals. People will always search for financial instruments which gives them higher returns on the investments.
Term Insurance Policies are a financial instrument that helps you to get the benefits of protection and tax benefit. It helps the family to stay financially secured in case of demise of policyholder therefore, buying term insurance policy is an important instrument when one thinks about taking life insurance. Online Purchase of term plans can be first crucial step toward making a successful financial strategy. It offers you protection against the unknown and can be used as a supplement for retirement income.
Buy for the Right Reason
You need to analyze the need you want to take up term insurance. You need to remember that you are buying term insurance for a specific purpose which offers cover to your family in case of your demise. Tax benefits can’t be the main reason for your decision to purchase Term Insurance. This policy funds for your retirement and education of your child. If you are buying this at young age then it would cost you cheaper.
Deciding the Cover Amount
In order to arrive at the final sum of term insurance, customers need to estimate their annual income, salary, monthly expenses, current and future expenses like school fees, mortgage in order to take care of financial requirements of their family after their demise.
Tenure of Policy
The tenure of your life insurance policy needs to be Retirement Age minus the Current Age, if your current age is 35 years of age and you want to retire the age of 60, policy tenure would be 25 years. There are some plans that offer high life insurance cover till age of 75.
Additional Coverage & Benefits
Add-On’s are riders which you can take along with base cover, some of them are critical illness rider, accidental death benefit rider, waiver of premium. The benefits are available at a higher premium which is added onto the base premium. We need to understand the importance and relevance of these riders so that a proper selection of the riders can be done.
Credentials of Life Insurance Company & It’s Claim Expense
Before you finalize on a life insurance policy, you would need to be completely assured on the credentials of your chosen life insurance company. Factors which one should look at include Assets under Management and Solvency Ratio.