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

Tata Mutual Fund

Being a part of the Tata group, the fund has the backing of a very trusted brand name with strong retail connect. While the current CEO has done an excellent job in leveraging the Tata brand name to AMC's advantage, it is ironic that this was just not capitalised on at the start. Incorporated in 1995, Tata Mutual Fund remained an 'also-ran' fund house for around eight years. Till March 2003, it had a little over Rs 1,000 crore in assets and 19 AMCs were ahead of it. But soon after that the equation changed. It was the fastest growing fund house in 2004 and 2005. During these two years, it aggressively launched six equity funds, two debt funds and one MIP. The fund house as of now stands at No. 8 in terms of asset size. This fund house has a lot to offer by way of choice. And, it also has a number of well performing schemes. Tata Pure Equity, Tata Equity PE and Tata Infrastructure are all good funds. It also has quite a few good debt funds. The funds of Tata AMC are known to...
Read more

UTI Mutual Fund

Even though only a few of UTI’s funds are great performers, this public sector fund house has many advantages that its rivals do not. It has a huge base of retail equity investors and a vast distribution network. As a business, it looks stronger than ever, especially in the aftermath of credit crunch. UTI is, by a large margin, the most profitable fund company in the country. This is not surprising, since managing equity funds is more profitable than debt. Its conservative approach and stable parentage is likely to make it look more attractive to investors in times to come. UTI’s big problem is the dragging performance that many of its equity funds suffer from. In recent times, the management has made a concerted effort to improve performance. However, these moves have coincided with a disastrous phase in the stock markets and that has made it impossible to judge whether the overhaul will eventually be a success. UTI’s top performers are a few index funds, some hybrid funds and its inf...
Read more

Salary planning Article

1. The salary (basic + DA) should be low. The rest should come by way of such allowances on which the employer pays FBT and you don't pay any tax thereon. 2. Interest paid on housing loan is deductible u/s 24 up to Rs 1.5 lakh (Rs 150,000) on self-occupied property and without any limit on a commercial or rented house. 3. The repayment of housing loan from specified sources is also deductible irrespective of whether the house is self-occupied or given on rent within the overall ceiling of Rs 1 lakh of Sec. 80C. 4. Where the accommodation provided to the employee is taken on lease by the employer, the perk value is the actual amount of lease rental or 20 per cent of the salary, whichever is lower. Understandably, if the house belongs to a family member who is at a low or nil tax zone the family benefits. Yes, the maximum benefit accrues when the rent is over 20 per cent of the salary. 5. A chauffeur driven motor car provided by the employer has no perk value. True, the company would...
Read more

8 Investing Strategy

The stock market ‘meltdown’ witnessed since the start of 2005 (notwithstanding the recent marginal recovery) has once again brought to the forefront an inherent weakness existent in our markets. This is the fact that FIIs, indisputably and almost entirely, dominate the Indian stock market sentiments and consequently the market movements. In this article, we make an attempt to list down a few points that would aid an investor in mitigating the risks and curtailing the losses during times of volatility as large investors (read FIIs) enter and exit stocks. Read on Manage greed/fear: This is an important point, which every investor must keep in mind owing to its great influencing ability in equity investment decisions. This point simply means that in a bull run - control the greed factor, which could entice you, the investor, to compromise with your investment principles. By this we mean that while an investor could get lured into investing in penny and small-cap stocks owing to their eye-...
Read more

Debt Funds - Check The Expiry Date

This time we give you an insight into something that most debt fund investors would be unaware of, the Average Portfolio Maturity. As we all know, debt funds invest in bonds and securities. These instruments mature over a certain period of time, which is called maturity. The maturity is the length of time till the principal amount is returned to the security-holder or bond-holder. A debt fund invests in a number of such instruments and each of these instruments would be having different maturity times. Hence, the fund calculates a weighted average maturity, which would give a fair idea of the fund's maturity period. For example, if a fund owns three bonds of 2-year (Rs 30,000), 3-year (Rs 10,000) and 5-year (Rs 20,000) maturities, its weighted average maturity would be 3.17 years. What is the big deal about average maturity then, you may ask. Well, knowing a fund's average maturity is important because it tells you how sensitive a fund is to the change in interest rates. It is ...
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