What is term insurance? Why should I buy a term insurance product?



Many colleagues at work are talking about term insurance. After speaking to some of them I understand that a term policy will give me life cover but I don’t know if I should buy a policy myself. So if someone can tell me what term insurance is and what the benefits are, I can consider a purchase.

What is term insurance? Why should I buy a term insurance product?
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6 Replies to “What is term insurance? Why should I buy a term insurance product?”

  1. Term insurance is a great product to get cover protection. It is very cheap when compared to other life insurance products. This is because there are no returns if you live beyond the term period. A term insurance policy offers death benefits only. But if you do pass away, then your family is protected thanks to the policy and would receive money, which will help them cover all liabilities.

    A term insurance is a must if you have any dependents. Your liabilities like a home loan, car loan, etc. will create a great burden on your family. The term life insurance policy will help your family deal with the liabilities they have if you do pass away. They will have a safety net. You should get a policy soon. Purchasing the policy online is even better since your premium will be even lower as there are no additional costs, like agents commission, etc involved.

    You can find out more about ICICI Prudentials term insurance at – http://www.iciciprulife.com/public/BuyOnline/iProtect/iProtect.htm.



  2. term insurance is a policy you pay premiums for for a set amount of time 5+ years. when the term period is up, the policy expires with no value. it’s a good idea for young people who have kids and a mortgage, so your house can be paid for if you die and leave a family. sometimes business partners will take out policies on each other so the business is covered if 1 partner dies. but the policy has no cash value to borrow from, you just pay the premium and keep it inforce for a set # of years and if you die during that time, the beneficiary gets the payout.


  3. Hi,

    Term Plan is also called Protection Plan. This is a pure Insurance where ONLY the risk of death is covered for a specified period.

    There are a few advantages of this policy:
    a.This is cheapest Life Insurance policy, as only Mortality and Expenses would be the only 2 component of the Premium. Since there is no Survival Benefit to be paid to the customer, there is no requirement of any Investment.
    b.Being the cheapest Life Insurance policy, one can get a HUGE Life Cover with a nominal Premium amount. So, he gets to guarantee his family’s security at a very low cost.
    It simply means that a person pays a certain premium to protect his family against his sudden death. He forfeits the amount if he outlives the period of the policy.

    to compare and choose the best term plan, please log onto our website
    thanks
    Rupanjali M


  4. Insurance is basically a loss reducing avenue for unforeseen events.

    No insurance policy will make you richer than what you are today. Nor will it be enough for your nominees to recover the financial loss suffered by them in your absence. At the most , it will give them temporary financial relief.

    Insurance is an expense , not an AVENUE FOR INVESTMENT.

    Term Insurance . is the cheapest insurance cover you can buy for yourself. It has no maturity value. You pay only for the risk. Your nominee gets the money only if you die. After the term is over , you do not get anything.

    Since it is 10 to 12 times cheaper than a traditional endowment or money back policy , agents are reluctant to sell such policies to you. Reason is obvious.


  5. Hi Shantanu,

    Its great that you want to want to get information about things that can safeguard your future. A term plan is one such thing. It is the purest form of insurance. In the event of your death, during the policy term, your nominees receive the covered amount. Since the entire premium paid by you on term polocies goes towards covering the risk of your life, insurers offer you this cover at the least cost.

    Many companies are also now investing in their employees by offering Group Insurance for them. The advantage of this is the cost factor.

    To explain term insurance, say a healthy 30 year old man who wants to Rs 5 lakh cover for 20 years will pay an annual premium of Rs 1500 on a term plan. Term plans are avialbale for tenures between five years and forty years with a maximum age of entry being 50 yers. Premium is payable every year.

    Term insurance can also be bought online like the Future Generali Smart Life Plan with a very affordable premium plan of Rs 7100 annual premium on Rs 50 lac.

    Term insurance is a must and should be bought necessarily.





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