Skip to main content

Find Right Term Plan

When you buy a term insurance plan, keep the needs and financial acumen of the insurance beneficiaries in mind as it is for them that you are buying the term plan, not for yourself


If you are in the market for life insurance, a term insurance policy is the cheapest product to buy. And to add convenience to your buying experience, most insurers now also offer it online. Term plans have gained some traction with the online platform, and as with everything else, gaining popularity has led to more innovations.


The straightforward structure of a term plan-the nominee gets a sum assured on death of the policyholder during the policy term and nothing if policyholder survives the term-is not the norm but just a variant nowadays. There is a lot of customisation in the way insurance money can be given to the nominee. Now, the nominee can get: periodic income for a fixed number of years instead of a lump sum, a combination of lump sum and income, or even a periodic income that increases regularly to keep pace with your needs in the future. Then there are plans that offer payouts if the policyholder contracts a terminal illness, while some customize the policy with an inbuilt personal accident cover too. So, how do you choose from the different options available?


Lump sum or income
The choice between a lump sum and a staggered benefit option should entirely depend on your circumstances and nominees. You need to account for your debts, financial goals and your family members. So, if your spouse is financially clued in, a lump sum benefit works well, else the staggered benefit option is better. Even then, some lump sum is needed as a buffer until the family stabilises. Someone with debt can look at a higher component of lump sum benefit


The good thing is, some plans allow you to customise the death benefit to offer part lump sum and part periodic payments. You should also consider plans that increase your sum assured automatically at milestone events such as having children, without even asking for medicals. This takes care of increased insurance needs


Then there are income replacement plans. Unlike the staggered option that breaks the sum assured to pay a fixed sum for a fixed number of years, income replacement plans offer periodic income until a goal is reached. So, if it is linked to retirement then upon death of the policyholder, the beneficiary gets periodic income till the retirement age of the policyholder. If the policyholder dies closer to retirement, the sum total of pay-outs reduces. Carefully consider your liabilities and goals before buying this plan. For someone with a heavy debt, this may not be the best choice.


Terminal illness cover
Term plans have also started paying the sum assured, or a portion of it, if the policyholder contracts a terminal illness. But, according to Bondia, this is not a feature that should swing your decision. Insurers will insist on a doctor's certificate that the policyholder is terminally ill. The insurer will then carry out its own investigation. The process may not be smooth. If you have a critical illness policy, you don't really need to worry as critical illness would cover a wide range of ailments including terminal illnesses and would also act as an income supplement.


Even the policies that build in personal accident covers should be considered carefully. A stand-alone personal accident policy is not only more comprehensive, as it also takes care of temporary total disability, but is also cheaper


The choices are aplenty, but keep it simple. The market has a lot of product variants as insurers want to go beyond price differential to attract customers. But the choice really boils down to choosing between lump sum and periodic payment plans. If your claimant can't handle a lump sum payment, and you need to ensure an income stream, go for a plan that allows you to stagger a high proportion of the sum assured


Innovation in a term plan is a good thing, but to make the right decisions, approach the product from the point of view of your beneficiary.





Invest Rs 1,50,000 and Save Tax upto Rs 46,350 under Section 80C. Get Great Returns by Investing in Best Performing ELSS Funds

Top 10 Tax Saver Mutual Funds for 2018

Best 10 ELSS Mutual Funds to invest in India for 2018

1. DSP BlackRock Tax Saver Fund

2. Invesco India Tax Plan

3. Tata India Tax Savings Fund

4. ICICI Prudential Long Term Equity Fund

5. Birla Sun Life Tax Relief 96

6. Franklin India TaxShield 

7. Reliance Tax Saver (ELSS) Fund

8. BNP Paribas Long Term Equity Fund

9. Axis Tax Saver Fund

10. Birla Sun Life Tax Plan



Invest in Best Performing 2018 Tax Saver Mutual Funds Online

Invest Best Tax Saver Mutual Funds Online

Download Top Tax Saver Mutual Funds Application Forms


For further information contact SaveTaxGetRich on 94 8300 8300

------------------------------------

Leave your comment with mail ID and we will answer them

OR

You can write to us at

Invest [at] SaveTaxGetRich [dot] Com

OR

Call us on 94 8300 8300


Popular posts from this blog

Debt Mutual Fund Dividends are Taxable

DDT is deducted when a non-equity fund declares dividends. Equity and balanced fund dividends are tax-free The AMC is correct to deduct the dividend distribution tax (DDT) as it is mandated by tax laws. DDT in mutual funds is deducted every time a non-equity fund declares dividends. Equity fund and balanced fund dividends are tax-free . It is possible that you have invested in a non-equity fund for the first time or have received the dividend under a non-equity fund for the first time. That is why this is the first occasion when you have come across DDT.   The rate at which non-equity schemes deduct DDT has also gone up after the July 2014 budget. This is due to a change in calculation methodology. Earlier, if the fund has to declare a dividend of R 100, it used to make a provision for R 128.3, paying R 28.3 to the taxman and distributing the balance to the investor. This allowed the investor to bear less tax since the effective tax rate was 22.07 per ce...
Read more

Franklin India High Growth Companies Fund

Franklin India High Growth Companies Fund Online One of the key developments that the Street is keenly waiting for is a cut in interest rates by Reserve Bank of India . With demand rising gradually, a rate cut is expected to boost earnings growth for companies. In such a situation, schemes which invest in high growth companies are best suited, especially when seen from a long-term perspective. One such scheme is Franklin India High Growth Companies Fund. Fund managers Anand Radhakrishnan, Roshi Jain and Srikesh Nair strictly follow valuation parameters when it comes to choosing stocks.Valuation parameters, such as enterprise value, price-to-earnings growth ratio, forward price-to-sales ratio and discounted earnings per share, play a critical role in selecting companies for investments. Taking into account these parameters, the fund managers invest in companies which are poised for high growth in their respective sectors. This approach has been in favour of the scheme and it has perform...
Read more

Mutual Fund Exit Load Changes

Download Tax Saving Mutual Fund Application Forms Invest In Tax Saving Mutual Funds Online Buy Gold Mutual Funds Leave a missed Call on 94 8300 8300 Mutual Fund Exit Load Changes AMCs don't communicate about any change in exit load directly with investors, but do update on their website   The exit load applicable to your investments is the load which existed at the time when you invested in the particular fund. Any subsequent changes in the exit load will not be applicable to your investments.   However, Asset Management Companies ( AMCs ) periodically publish addendums in the newspapers, which state any change in exit loads of specific schemes managed by them. Such changes are also posted on their websites. However, a direct communication to an investor is not made, considering the costs involved in doing so. In their own interests, investors should not only track the performance of the funds they i...
Read more

Atal Pension Yojana contribution Tax Benefit for spouse

Contributions to Atal Pension Yojana (APY) are eligible for the same tax benefits as the NPS. This means that the contributions can be claimed under Section 80CCD (1B). The current limit for Section 80CCD (1B) is   Rs   50,000, over and above the   Rs   1.5 lakh limit under Section 80C. Section 80 CCD (1) is a different one, meant to cover employers' contribution towards NPS . You cannot get tax benefit by investing in the name of your spouse under Section 80 CCD . ------------------------------ ----------------- Invest Rs 1,50,000 and Save Tax under Section 80C. Get Great Returns by Investing in Best Performing ELSS Mutual Funds Top 10 Tax Saver Mutual Funds to invest in India for 2016 Best 10 ELSS Mutual Funds in India for 2016 1. BNP Paribas Long Term Equity Fund 2. Axis Tax Saver Fund 3. Religare Tax Plan 4. DSP BlackRock Tax Saver Fund 5. Franklin India TaxShield 6. ICICI Prudential Long Term Equity Fund 7. IDFC Tax Advantage (ELSS) Fund 8. Birla Sun Life Tax Relief 96 9. ...
Read more

Avoid NFOs

  Don't get taken in by the flurry of new fund offers. You will be better off sticking to the tried and tested schemes.   For the past one year, to cash in on the bull run in equities, mutual fund houses have gone on a new fund offer (NFO) overdrive. But experts are unanimous in their advice: avoid NFOs . While past performance is not an indicator of how a fund will fare in the future, it does tell the investor how skilful the fund manager is. This crucial information is missing in an NFO. Not only is there no track record to judge an NFO by, many NFOs are similar to funds that already exist. If the new fund is similar to existing funds, you are better off investing in the latter. Around 67% of the new launches in 2014 were closed-end products. Investing in the NFO of a closed-end fund is doubly risky. In case the fund's performance is lacklustre, a closed-end fund does not allow you to exit. Even though closed-end funds are listed on the stock...
Read more
Related Posts Plugin for WordPress, Blogger...
Invest in Tax Saving Mutual Funds Download Any Applications
Transact Mutual Funds Online Invest Online
Buy Gold Mutual Funds Invest Now