Docstoc

Term Insurance - Why it is important-

Document Sample
Term Insurance - Why it is important- Powered By Docstoc
					Term Insurance is a type of insurance which provides coverage for a limited period of
time at a fixed rate of premium. Post expiry of the policy, the policy holder either has
to forgo the coverage or obtain a different policy with different terms and conditions
which also includes a change in the premium. If the policy holder dies during the
stipulated term, the benefit is paid duly to the beneficiary. Term life insurance is the
cheapest life insurance policy available in the market.
  Term Insurance is similar to most other types of insurance. If the premiums are up to
date and the policy is current, the claims are satisfied against what is insured. Term
life Insurance is a pure death benefit and hence its primary purpose is to cover
financial responsibilities for the beneficiaries. The responsibilities may include
college education, consumer debts, dependent care, funeral costs and mortgages. Term
insurance is usually chosen by people who do not have substantial savings or by
people whose only savings are retirement savings and they had to wait till their
retirement. In such cases, the dependents have an immediate cover and are well
cushioned financially in case of the death of the policy holder during the term or
before retirement. Term cover may act as a buffer to the beneficiary till the retirement
savings become available.
  Term insurance comes in two forms 鈥?annual renewable term and level term
insurance. Annual renewable term comes with a term period of one year and can be
renewed within the year by producing appropriate proof of insurability. The more
common and reliable one is the level term insurance in which the premium remains
the same for a number of years which may be 10, 15, 20 or 30 years. The best term
plans would come with a low and consistent premium rates and will also have a
option to renew the plan in case there is a need for extendibility.
  Term plans can be bought online (ICICI Prudential 鈥檚 iProtect or Aegon Religare
鈥檚 iTerm) or through a reliable agent. While an agent guides you through the
various insurance companies and the best plans on sale, buying policies online may
requires a bit of an effort and research. Comparing different premiums, companies
and their reputation in the market, their consistency and efficiency during the pay out
time are some of the aspects to be taken into consideration while choosing a plan.
Opting for a term plan that best suits the client 鈥檚 needs and is also in sync with the
company 鈥檚 terms and conditions may be called as the best term life insurance
policy.
  For more information please visit: - Term Insurance