Term insurance is a necessity in today’s times. But do read this article before you sign up for one.

When it comes to buying insurance, you are focussed on providing the best for yourself and your loved ones. But you are a little sceptical about buying term insurance – after all, the term plan does not offer a maturity benefit, so your paid premiums are not returned to you in case you outlive the plan tenure.

But the term plan more than compensates for your lost income if you are absent in the future. Your family can live off the sum assured from the plan quite comfortably.

Before you proceed to buy the term plan online, do note some little-known facts about term  life insurance in India, such as –

1. It is the best way to secure your family’s future.

Of all the investment options available to you at the moment, the term plan is the best one in terms of providing a large fund of money for your family’s future. It provides a sufficiently large corpus of money that can take care of household expenses, children’s education and/or wedding, spousal support, urgent medical costs, unpaid debts, etc. (see next point for more information on the sum assured). The term insurance plan corpus is not linked with the markets, and you are aware of the sum assured amount at the time of buying the term plan online.

2. The sum assured can be up to 20 times your annual income.

The term plan pays the highest sum assured across all insurance products in India at the moment. Do bear this fact in mind when you use an online term plan calculator to get a certain sum assured payment. First assess your family’s future needs before you decide on the potential sum assured amount, and factor in future inflation as well. Typically, insurance providers cap the sum assured between 15 to 20 times your current annual income.

3. Some term plans allow you to increase the sum assured during the plan tenure.

While most term plans are generically designed, some are devised to allow you to increase the sum assured at a later stage. This is an essential feature, since a person has different needs at different life stages.

4. The plan can cover you up to age 75 years.

When you buy the term plan online, you should check the entry age for the policy as well as the maximum age. The best online term insurance policies offer a maximum level cover and increasing cover benefit up to the age of 75 years. The longer the maximum age, the better it is in terms of having an adequate ‘safety buffer’ for your loved ones.

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January 2021