Why You Must Have Term Insurance

1. TERM INSURANCE Why is it necessary to have term insurance?

2. MEANING Insurance in simple words is the 'cover of risk'. It's main aim is to transfer the risk of a person to the Insurance company, by paying a premium. People buy insurance to cover the possibility of any uncertainty occurring in future. There are many insurance policies, you have endowment policies, ULIP policies, child plans, annuity plans, assured plans, term plans, etc. The purest form of insurance is Term Insurance.

3. What is term insurance? Term Insurance also known as pure insurance, because it covers the basic meaning of insurance. Eg: a person pays a premium, for a fixed period. If the insured dies during that fixed period, his nominee will get the sum assured agreed upon. If the insurer lives till maturity, then the he/she has the option to stop the policy or continue with revised terms and conditions. It has the cheapest premium. This Plan is purely to cover only the risk.

4. What people actually think of term insurance? • When I say term insurance is, no benefit on survival. • We pay premiums, but there's nothing coming in. • There's no bonus also on expiry or maturity. • Why buy term insurance when ULIP and endowment plans give survival benefits. • Term Insurance is a waste of money.

5. Characteristics of Term Insurance • The premium is cheap. The earlier you take it, the better. • There is no survival benefit. • The sum assured will be decided on your current debts, income earned and living expenses. • You can extend the term under certain terms and conditions. You can also wish to forgo the coverage. • The death benefit will be given to the beneficiary.

6. Importance of Term Insurance • It's cover is big , all your risk is coveredand premium is less. • Your family still has your financial support even though your not around. • Your family doesn't have to compromise on their future, by using the money saved up for various other goals. • It gives you peace of mind that your family will be financially stable, in your absence. 

7. How should one plan for a term insurance? • The reason for taking a term insurance should be to cover your risk only. • The premiums are less and it will also depend on your age.  • You need to analyse your financial situation and accordingly decide your sum assured. • Next is to determine for how long you want it. It is always advisable to take a term policy, till your earning.

8. How does one choose which insurance policy is best suited for them? • Once you have identified your needs, you can choose the top 5 insurance companies • There are many online sites to compare various policies or as a consultant • Claim ratio must also be good. • After analysing all the term plans, pick the one best suited

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