Skip to main content

How to choose a Term Plan ?

 




Keep these factors in mind when you go shopping for a life insurance policy.

Term plans are the best form of life insurance because they offer high cover at a low price. A 30-year-old man will pay just `700-800 a month for a cover of `1 crore for 30 years. That's roughly what one spends on one movie outing with friends. However, the costs alone should not be the criterion when choosing a term plan.Here are a few things you ought to keep in mind when you go shopping for one.

How big is the cover?

An inadequate cover defeats the very purpose of buying insurance. The sum assured must be large enough to generate enough income to cover the basic expenditure that your family will incur as well as provide for crucial financial goals such as the education and marriage of children. It should also cover liabilities like loans, especially big-ticket borrowings like home loans. Take a large cover that provides for all these needs and also factors in inflation in the coming years.

How long is the tenure?

The tenure of the term plan is almost as important as the amount of cover. An insur ance policy should cover a person till he intends to work. Till a few years ago, this was 60 years, but late marriages and having children in the late forties mean responsibilities do not end at 60. Experts believe a person needs a life cover till at least 65 years, though it may vary according to circumstances.Don't take a 15-20 year plan that will terminate when you are in your 50s. This is a critical period when the person's insurance needs are highest. At that age, a new policy will cost him a bomb. He might even be de nied the cover if he is not keeping good health. Buy a cover till the age of at least 6065 years.

Have you lied about your health?

Insurance companies charge a lower premium if there is no history of medical problems in the family and if the person doesn't use tobacco or drink alcohol. It is easy to say no to all these and get a lower premium, but people who keep their medical problems under wraps or conceal their social habits are play ing with fire. If the insurer finds out that you withheld crucial information on your health or lied about your smoking and drinking habit, the claim by your nominee may get rejected. Every year, about 2% of the claims received by life insurance firms end up in the trash can. Don't let a difference of a few thousand rupees in the premium jeopardise your insurance cover.

How stable is the company?

An insurance policy is a long-term contract, but there are indications that a few insurance companies may not be around for the long term. The sector is going through a bad phase and several foreign partners have either sold off their stake or are looking for buyers. There is a possibility that loss-making companies may be taken over by larger players. Though the insurance regulator will ensure that all policies are honoured by the new owners, it's best to choose a company that is doing well and is not likely to shut shop.





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

For further information contact SaveTaxGetRich on 94 8300 8300

OR

You can write to us at

Invest [at] SaveTaxGetRich [dot] Com

OR

Call us on 94 8300 8300




 

Popular posts from this blog

Mutual Fund Review: Religare Tax Plan

Tax Plan is one of the better performing schemes from Religare Asset Management. Existing investors can redeem their investment after three years. But given the scheme's performance, they can continue to stay invested   Given the mandated lock-in period of three years, tax saving schemes give the fund manager the leeway to invest in ideas that may take time to nurture. Religare Tax Plan's investment ideas revolve around 'High Growth', which the fund manager has aimed to achieve by digging out promising stories/businesses in the mid-cap segment. Within the space, consumer staples has been the centre of attention for the last couple of years and can be seen as one of the key reasons for the scheme's outperformance as compared to the broader market. It has, however, tweaked its focus and reduced exposure in midcaps as they were commanding a high premium. The strategy seems to have worked as it returned a 22% gain last year. Religare Tax Plan has outperformed BSE 100...

Stocks with a high dividend yield

Buy Gold Mutual Funds Invest Mutual Funds Online Download Tax Saving Mutual Fund Application Forms Call 0 94 8300 8300 (India) Stocks with a high-dividend yield can provide investors additional cash flow. More importantly, it is tax-free   With April 2011 just over, the 'earnings season' is well and truly here. This is the time most companies pay out a portion of their profits as dividends to shareholders. Since dividends are tax-free, they are an attractive income source with a select class of investors, who depend on these for additional cash flow. SIGNIFICANCE A company doing well and generating profits will usually be in a position to declare dividends regularly. Hence, a key parameter one should look at whilst investing in a stock is whether the company has a good dividend record. Typically, dividend yield stocks are large-caps and generally not capital-intensive. This is suggestive of the fact that the downside risk on...

For Retirement Invest in growth Assets

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   Last week, I wrote about the need for retired investors to have a growth component in their corpus to fight inflation. In the financial advisory space, it’s a challenge to convince retired investors to take risks in order to achieve capital appreciation in their portfolios. Many choose a compromised lifestyle and curb their expenses in retirement. What should they do instead? There are only two ways to create a large corpus: saving a large part of the income, or investing the saving in growth assets. In a country of savers, the first has been the natural choice. However, the second deserves attention. An investor who is saving for retirement is trying to replace the human asset with an investment asset that will generate the require...

HSBC MIP Savings Fund dividend

Invest HSBC MIP Savings Fund Online   HSBC Mutual Fund   has announced dividend under the following schemes: Scheme Dividend ( R /unit) HSBC Income Investment-DQ 0.1733436 HSBC Flexi Debt Direct-DQ 0.18056625 HSBC Flexi Debt-DQ 0.18056625 HSBC MIP Regular-DQ 0.18056625 HSBC MIP Savings-DQ 0.2022342 HSBC MIP Savings Direct-DQ 0.2022342                     The record date has been fixed as June 27, 2016.     ----------------------------------------------- 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 Saving 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. Franklin India TaxShield 4. ICICI Prudential Long Term Equity Fund 5. IDFC Tax Advantage (ELSS) Fund 6. Birla Sun Life Tax Relief 96 7. DSP BlackRock Tax Saver Fund 8. Reliance Tax Saver (ELSS) Fund 9. Religare Tax Plan 10. Birla Sun Life Tax Plan I...

Systematic withdrawal plan

  Start Systematic withdrawal plan Online Although an SWP gives you regular income and saves on taxes in the long term, you cannot open an SWP on a scheme where you have an ongoing SIP   iStockPhoto If you are planning to take a sabbatical from work or are retiring soon, you may be looking at different investment options that give a regular income. Usually, a lump sum is invested to get regular fixed amounts later. Popular products include post office monthly income scheme, Senior Citizens' Savings Scheme and monthly income plans (MIPs). A lesser known option is the systematic withdrawal plan (SWP) in mutual funds. Recently, some funds have even removed the exit load on SWPs if you were to withdraw up to 15-20% in the first year, to encourage people who want to start investing in this instrument. Here is a look at what an SWP is. WHAT IS SWP? Many of us would be familiar with a systematic investment plan (SIP ), where a corpus ...
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