When it comes to policies, term insurance stands out for its pure protection focus, payout, and affordability. No wonder, it’s a popular choice amongst Indians. But with so many term insurance options out there, choosing the right term life insurance can be confusing, especially for first-time buyers. Questions like these often come up in the minds of many people:
- Which term insurance is best in India?
- How much term insurance do I need?
- Is it even worth buying a term plan?
If you’re unsure as well, fret not! In this blog, Aapka Policywala has tackled frequently asked questions about term life insurance for you. We are certain that by the end, you’ll have the knowledge you need to confidently choose the right policy for you!
Let’s start.
Q1: What is Term Insurance?
Remember how in movies, Superman protects people from danger? Term insurance is his powerful yet budget-friendly version. It will provide a fixed payout to the family if you experience a tragedy during the policy term. Yes, you read it right! Your family will receive a lump sum to cover bills, loans, or even their future needs, even if you’re gone.
Q2: What are the Benefits of Buying Term Insurance?
There are many advantages to buying a term insurance policy. Some of them there:
- It provides a death benefit for your loved ones. Basically, helping them manage finances in your absence.
- You get high coverage at a relatively low cost compared to other life insurance plans.
- It lets you choose a policy term and sum assured that best suits your needs and budget.
- Knowing that your family is financially secure will bring you peace of mind.
Q3: How Much Term Insurance Do I Need?
One of the most common questions asked by people looking forward to buying this type of insurance. The right amount depends on your circumstances. Here are some factors to consider:
- Dependents: Do you have a spouse and children? Or other family members who rely on your income?
- Income: How much income do you put on the table? How much do you think your family needs to replace in your absence?
- Debts: Do you have outstanding loans or mortgages?
- Financial goals: Are there any specific goals you want to make sure that your family can achieve? For example, education or a wedding.
Here’s the general rule of thumb: Get coverage 10-12 times your annual income. However, we suggest using a term insurance calculator. You can also consult our PSOP agents. They will help you determine the optimal coverage amount for your situation.
Q4: Term Insurance Plan vs Traditional Insurance Plan: Which One Should I Choose?
Term insurance and traditional plans such as whole life, endowment, and ULIPs serve different purposes. The former prioritizes pure protection at an affordable cost. It pays a death benefit if you pass away during the policy term. However, it doesn’t offer any maturity benefit.
Latter, on the other hand, combines protection with a savings element. These plans have higher premiums, typically. But they offer a payout upon maturity alongside a death benefit. Everything depends on your goals. Consider them before making a final decision.
If your primary concern is securing your family’s finances in case of your demise, term life insurance might be ideal. However, traditional plans could be a better fit if you also want to build wealth alongside protection and don’t mind spending extra money.
Q5: How to Decide on the Right Term Insurance Policy Tenure?
Mainly, it depends on how early you purchase your term insurance policy. Put simply, purchase age! Starting young will let you lock in coverage for a longer duration. This can be especially valuable if the policy aims to pay off a loan in your absence.
But that’s not it! We also recommend you consider the following factors:
- Tailoring to your needs: You can match the policy term to your premium payment window. For example, if you have 20 years of loan repayments left, a 20-year term might be suitable.
- Working life coverage: Want to learn about a smart strategy? Make sure you have coverage for all aspects of life especially when your income supports dependents!
- Adaptability: It is important to keep in mind that one’s needs might evolve over time. Therefore, keep reviewing and adjusting your policy tenure as time passes.
Q6: What Types of Deaths are Covered in Term Life Insurance?
Another important question that buyers usually ask us while choosing the right term life insurance on our website. This policy offers peace of mind by providing a payout in case of unforeseen events. What kind of events, you ask?
Well, here’s what is typically covered:
- Natural causes: This includes death due to illness, heart attack, stroke or other natural health issues.
- Accidents: Unexpected events like car accidents or falls are also covered by term life insurance.
- Disasters: Deaths caused by natural disasters like earthquakes or floods are usually included.
Note: It’s important to note that there could be exclusions. So, make sure to check out your policy details for specifics on suicide exclusions or death caused by dangerous activities.
Q7: What is the Cost of Term Life Insurance in India?
Although the beauty of term insurance indeed lies in its affordability, there’s no one-size-fits-all answer if you ask us about the exact cost. That’s because the cost (also called premium) depends on several factors:
- Age: Your age plays a crucial role. Generally, younger individuals pay lower premiums compared to older applicants.
- Coverage amount: Also called sum assured, the higher the death benefit you choose, the more you’ll pay in premiums.
- Policy term: Let us tell you that longer terms typically come with slightly premiums than shorter ones!
- Health and Lifestyle: Do you drink or smoke a lot? Or have any pre-existing health conditions? In these cases, you may have to pay higher premiums
Term insurances listed on Aapka Policywala’s website are known for offering substantial coverage at relatively low costs compared to other life insurance options.
Here, learn more about the best term insurance policy provider in India!
Q8: What Happens If I Outlive the Term?
Our list of FAQs for term insurance will be considered incomplete without this question. Understand that this type of policy focuses on providing a safety net during a specific period. Meaning, if you outlive the policy term, it simply expires. No payout will be received by you or your beneficiaries.
But there are rare exceptions:
- Return of premium rider: Some term plans offer a return of premium rider. With this add-on, if the policy term ends without a claim, a portion of your premiums may get refunded.
- Convertible term insurance: Some term insurance providers might let you convert your term policy into a whole life plan. That too with a cash value component if you outlive the term.
FAQs for Best Term Insurance in India: Final Words
Above are some frequently asked questions regarding purchasing a term insurance policy in 2024. Remember, Aapka Policywala is here to guide you every step of the way. We recommend consulting with our PSOPs to assess your specific requirements and find the perfect plan that fits your budget and goals.
Don’t hesitate to reach out at info@aapkapolicywala.com or explore our best-term insurance plans online. Now that we’ve armed you with the necessary information, we really hope you can pave your way through the world of insurance and make an informed decision to secure your loved one’s future!