Owing to its tremendous growth, India is, currently, one of the fastest growing large economy of the world. What this has brought us is an increase in the income of our citizens which directly infers more disposable money. A big chunk of this money is being spent on automobiles. In fact, India is now the second fastest growing passenger vehicle market in the world, just behind China. This also brings a problem of plenty!
Many vehicles have ended up on our roads at a much faster rate than what was expected and the infrastructure development has not taken place at the same pace to support this sudden influx. Not just this, traffic laws or rather lack of them, make our roads the most unsafe in the world.
Let’s look at some statistics – around 450,000 accidents occur on our roads every year and approximately 150,000 people are killed in them. This translates to around 400 deaths every day. Shocking, isn’t it? The bigger story is – out of these accidents, around 37% occur on roads other than highways. So, even our city and town roads are not safe.
Just imagine the plight of family members of those who die in these accidents. Moreover, if the departed happens to be the bread winner, future of the whole family goes into the dark. But, if that person has a term life insurance policy, the situation can be different as the payout from the term insurance will at least cover the family financially. No doubt the loss of a person cannot be covered by anything but, if family’s finances are taken care of, at least their future will be secured. Hence, this directly becomes a big enough reason for everybody to consider and buy a term insurance during financial planning.
What is TERM INSURANCE?
As per Wikipedia,
“Term plan or term assurance is life insurance that provides coverage at a fixed rate of payments for a limited period of time, the relevant term. After that period expires, coverage at the previous rate of premiums is no longer guaranteed and the client must either forgo coverage or potentially obtain further coverage with different payments or conditions. If the life insured dies during the term, the death benefit will be paid to the beneficiary.”
It is very easy and cheap to buy a term insurance. They are, in fact, the cheapest among all life insurance options available in the market. The reason for this is – there is no investment component to these and the company is only liable to pay if the person insured dies during the coverage period.
What to Keep in Mind?
Now, to buy a term insurance, one should keep the following things in mind:
- The premium of a term insurance policy varies from company to company and on factors like the age of the person being insured, the tenure of the policy and payment frequency etc.
- Premium amounts are also affected by habits like smoking. These are higher for smokers.
- Claim settlement ratio, higher it is the better.
- Terms and conditions of different companies may be different. One should check what suits them best.
- One should choose a term which is most suitable for them and they should be able to pay the premium for the whole term to enjoy the benefits.
- Only adults i.e. people above 18 years of age can buy these plans.
- A medical test may be required before the company issues a policy and they have full rights to reject a policy if they find something adverse in these tests.
Another benefit of buying term insurance is that it qualifies for income tax exemptions as well under section 80C.
Buying these insurance plans have also become very easy. In addition to the various offline channels, one can easily buy them online as well through the company’s portals. Once details are furnished, a quote gets generated immediately. After accepting the quote, premium is paid online and a proposal is created. After all the formalities, like medical checks are done, the company issues the policy to the person – it’s that simple! Looking at current risks that a person has to his life and how important it is to be financially secured, buying a term insurance policy is one of the most important and logical decisions one can take.
About AEGON Life: AEGON Life Insurance Company Limited launched its pan-India operations in July 2008 with a vision to be the most recommended new age life insurance Company. The fulfilment of this vision is based on having a complete product suite, superior technology, providing customized advice and enhancing the overall customer experience. This joint venture adopts a local approach with the power of global expertise to facilitate a direct to customer approach, leveraging digital platforms to bring transparent solutions to customers and to prioritize their needs. AEGON is one of the world’s leading financial services organizations, providing life insurance, pensions and asset management and Bennett, Coleman & Company, India’s leading media conglomerate, have come together to launch AEGON Life Insurance.
