Term insurance is one of the easiest and most affordable ways to provide your family with a financial safety net.
As the world grapples with new forms of health risks during the ongoing Covid-19 pandemic, buying a term plan becomes essential. Term insurance is one of the easiest and most affordable ways to provide your family with a financial safety net. It works as an income replacement tool by paying out the sum assured to your nominees in the event of premature death during the term of the policy. It is generally advisable to take out your first life insurance policy as soon as you start working to cover your dependents.
That said, it’s important to note that term insurance is a pure vanilla life insurance product with no maturity benefits. It offers high insurance coverage benefits by paying a very small premium. The premium is usually low if a person avails the term insurance policy at an early age.
However, the insurance premium increases for people who smoke or drink. When purchasing a term insurance policy, it is important to do your calculations in terms of the amount of coverage. When estimating your coverage amount, consider your income, financial goals and the rate of inflation. It is generally advisable to opt for a sum insured that represents 10 to 20 times your current annual income. You should also think carefully about the choice of term when purchasing a term plan. This is important because a short tenure would mean putting your family at financial risk and a longer tenure would mean paying an extra premium, according to BankBazaar.
When you’re in the market to buy term insurance, compare different product offerings from different insurance companies based on policy benefits, features, premium amount, and most importantly, claims payout ratio. of the insurer.
If you are considering taking out basic term insurance of Rs 1 crore, the table below provides a list of 19 term insurance policies and the indicative annual EMIs for a duration of 30 years. All premiums have been calculated for a 30-year-old salaried single male non-smoker residing in Bangalore earning Rs 5 lakh per annum.
Note that the premium applicable to you may vary depending on your age, income, gender, policy features or any other condition provided by the insurer you have chosen.
What does a term plan cost with a sum assured of Rs 1 Crore?
Disclaimer: The data relates to a term insurance cover of Rs 1 crore for a 30 year old male, employed, non-smoker (single), residing in Bangalore, earning Rs 5 lakh per annum, for a duration of 30 years. The table is not exhaustive as it excludes companies for which data is not available on their website. Data as of October 12, 2021. *Companies have been listed based on their death toll claims ratios as per the IRDA FY2019-20 Annual Report in descending order. Data compiled by BankBazaar.com. ** According to the IRDA annual report