Purchasing Best Term Life Insurance Plan in India
Life insurance is an economic product that gives financial protection to a person’s own family if he dies. Life insurance is a type of bond between the Insured and a company (the Insurer). The individual pays an amount of money known as the premium to the Insurer. In return, the insurer promises to pay the person’s family or beneficiary a sure sum of money referred to as “Sum assured” if the man or woman suddenly dies.
Life Insurance : Types In India
In a time period bound coverage where a person has to pay a premium to the employer every 12 months for the duration of time time chosen for the policy cover. If he dies during the duration of the policy, his beneficiary gets the overall sum assured. If he survives, he will not get any monetary or other benefit. It basically acts as safeguard against any unwanted mishap or incident.
In an endowment policy, if someone dies during the tenure of the policy, his beneficiary will get the sum insured. If he survives the policy tenure, he’s going to get the amount of money he paid as policy charges along with add-on benefits like bonuses etc.
Money Back Life Insurance Policy
It is basically a variation of an endowment coverage, which gives the amount of partial survival benefits while the insured continues to be alive.
Whole life policy
A whole life policy covers someone for his entire life from the time the policy is taken.
Unit linked insurance Plan or ULIP plans is basically a coverage product where the insured person’s money is invested with the purpose of earning extra returns. ULIPs are supposed to offer a combination of life cover along with a possibility for wealth advancements by investing in different options.
What’s the term life insurance coverage?
As defined above, in a term insurance policy a person has to pay a premium often, and if he survives, he’ll not acquire any benefit. In simple words, a term coverage has no survival benefits. In some instances, time period policies may additionally have some additional riders.
It is critical that we, in reality, recognize the difference between insurance and investment.
As coverage is largely a product for shielding ourselves in times of a threat or mishap. We pay money to a 3rd-party regularly to make certain that if something untoward takes place, we are able to cope up with the same. If nothing happens, then that’s the best thing. However to make certain that your happiness remains intact and you enjoy your life worry free, you need to pay a small charge to the insurer in the form of a premium.
Investment, however, is a procedure wherein we invest unused or surplus money in certain tools like mutual funds, shares, bonds etc in order to get extra cash or in technical terms, return on investments made.
Now you surely know why you should purchase term life coverage despite not getting any money back or returns. It is advisable to purchase term life insurance plan for wider coverage and for securing the future of your family.
How to shop for term life coverage on-line?
The term life insurance plans in India are available both online as well as offline. But most people opt for online mode of purchase as its far more convenient and easy as compared to offline where you have to physically visit and explore each company and its plan before making a purchase. In other words, the way to your desired term plan is lot more smoother in online medium.
Claim Settlement Ratio
Claim Ratio is an important aspect while short listing which insurer to choose. If the sum assured is not paid to the nominees of the insured person after his demise, then the complete purpose of life insurance is defeated. It’s far more crucial when the beneficiary depends on the cash for his or her livelihood in the absence of the deceased.
The higher the claim settlement ratio, the better the policy and the chances of hassle free disbursement of sum assured. LIC for instance has one of the highest claim ration of 98.14% as per IRDA date for 2014.