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

How to generate a UAN Online

Best SIP Funds Online   In order to make Employees' Provident Fund (EPF) accounts portable, the Employees' Provident Fund Organisation (EPFO) had launched the facility of Universal Account Number (UAN ) in 2014. Having a UAN is now mandatory if you have an EPF account and are contributing to it. So far, you got this number from your employer and every time you changed jobs, you had to furnish this number to the new employer.  However, in order to make it easier for you to get a UAN , and without your employer's intervention, the EPFO now allows you to go online and generate a UAN on your own. This facility can be used by freshers, or new employees, who are joining the workforce as well as by employees who have older EPF accounts but do not have a UAN as yet. As a new employee, you can simply generate a UAN and provide the number to your employer at the time of joining, when you need to fill up forms for your EPF contribution. As per a circula...

Reliance Regular Savings Fund - Debt Option

Reliance Regular Savings Fund - Invest Online     The scheme aims to generate optimal returns consistent with moderate levels of risk. It will invest atleast 65 per cent of its assets in debt instruments with maturity of more than 1 year and the rest in money market instruments (including cash or call money and reverse repo) and debentures with maturity of less than 1 year. The exposure in government securities will generally not exceed 50 percent of the assets. The fund uses a mix of relatively low portfolio duration with active investments in higher-yielding corporate bonds. It does not take aggressive duration calls but tries to improve returns by cherry-picking corporate bonds. This is reflected in the fund's returns matching the category and benchmark for five years - at 8.4 per cent - but lagging behind the category during a raging bull market in bonds in the last one year. The fund has been a consistent but not chart-topping performer in the income category. Despite its ...

Am you Required to E-file Tax Return?

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   Am I Required to 'E-file' My Return? Yes, under the law you are required to e-file your return if your income for the year is Rs. 500,000 or more. Even if you are not required to e-file your return, it is advisable to do so for the following benefits: i) E-filing is environment friendly. ii) E-filing ensures certain validations before the return is filed. Therefore, e-returns are more accurate than the paper returns. iii) E-returns are processed faster than the paper returns. iv) E-filing can be done from the comfort of home/office and you do not have to stand in queue to e-file. v) E-returns can be accessed anytime from the tax department's e-filing portal. For further information contact Prajna Capit...

IIFL NCDs

Buy Gold Mutual Funds Invest Mutual Funds Online Download Tax Saving Mutual Fund Application Forms Call 0 94 8300 8300 (India) IIFL NCDs IIF's six-year unsecured NCD 2012 Risk-wary investors should stay away from this issue, and even, risk-taking ones should think twice It is a public issue of unsecured redeemable non-convertible debentures ( NCDs ) by India Infoline Finance ( IIF ), an unlisted company, which is a 98.9 per cent subsidiary of India Infoline, a listed company. The issue seeks to raise Rs 250 crore with an option to retain over-subscription up to Rs 250 crore taking the total potential issue amount to Rs 500 crore. It will be open for public subscription from September 5 to September 18 with a minimum application size of Rs 5,000 in the form of five NCDs of face value Rs 1,000, TENURE & RATES: IIF will redeem the NCDs at the end of six years, and investors wanting out before six years will be able to sell the...

ICICI Prudential Mutual Fund unveils scheme - ICICI Prudential Multiple Yield Fund Series 2 Plan D

  ICICI Prudential Mutual Fund has launched a new fund named ICICI Prudential Multiple Yield Fund Series 2 Plan D. The new fund offer will close for subscription on December 15.       --------------------------------------------- Buy Mutual Funds Online by selecting the Mutual Fund Schemes. Invest in Mutual Funds Online Mutual Funds Online   Download Mutual Fund Applications / Forms from all AMCs: Download Mutual Fund Applications
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