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Term Life Insurance-A Necessity or A Fad?

It Never Rains But It Pours…..When trouble comes it comes in heaps..We all know about the uncertainties and the vagaries of life. What is there today need not be there tomorrow. When one is having a good time one rarely thinks about the bad. However one bad day can make one forget all the good times one ever had. Isn’t this reason enough to consider a term life insurance? On a lighter note regular naps prevent old age especially when one is driving. In order to learn more about term life insurance plans and your Insurance Planning needs you can read through Moneymindz.com.

What Is Term Life Insurance Policy?

This is mainly a life insurance policy which provides coverage at a fixed rate of payments called the premium for a fixed duration or a time limit..This is the least expensive way to provide for substantial death benefits at a young age. The most common terms are ten, fifteen, twenty and thirty years. I would like to remind all of you that the team of Financial Planners at Moneymindz.com are always there for you to plan your Insurance needs in a most effective and efficient manner. You can explore this unique Free Advisory Service just by giving a missed call on 02262116588.

Types of Term Life Insurance Plans

The simplest form of term life insurance plan is the Annual Renewable Term. This is a form of term life insurance for a period of one year. The death benefits would be paid if the insured person dies during this period. This policy has the lowest premium but increases with the passing of time. However if a person contracts a dangerous life threatening disease during this period, but does not pass away during this period he would not be able to renew or purchase a new policy. Here some policies offer a feature called Guaranteed Reinsurability that allows the insured to renew his policy without proof of insurability. Remember it is not the fall that kills you but the sudden stop at the end…Always pay your premiums on time.

Another feature of term life insurance is Level Term Life Insurance. In this form the premium paid remains constant for the duration of the contract. Here the age factor and time value of money is factored into the premium payments. Most of these policies have a renewable option which allows the insurer to renew the policy for a maximum guaranteed rate, if the insured period has to be raised or extended. Here it is important to note that the renewability of the contract may or may not be guaranteed and the insured person should check the contract to see if proof of insurability is required to renew the policy. Here term policies may have a convertibility option which may allow him to convert to a whole life policy. This is useful for policy holders who acquired the policy with a particular rating, but this rating may have changed due to a prolonged period of illness. This would make it difficult for him to be issued with a policy in the original rate class when his policy comes up for renewable .Here convertibility may not necessarily extend to the end period of the term policy but for a fixed number of years or convertibility up to an age of 70 years. For your Insurance Planning needs please look up the website Moneymindz.com.

Who Needs Term Insurance

The average age of people taking up these policies is coming down at a rapid rate. We live in a time of rampant competition and technological changes. This results in a huge degree of stress in our workplaces. Here by taking up a term policy we cover up most of the possibilities of death for a fixed time frame. Hence the youth of our country should take up such a policy in order to insure themselves and reduce the load on their dependents. However if you want to insure yourselves specifically for an accident ,then the youth can also take up a Personal Accident policy which provides a huge sum assured on accidental deaths at quite low premiums. Hence we get an immense start up benefit if we take up these policies at a young stage in life as premiums tend to be lower at a young age and consequently increase with age. So what are you waiting for? Remember Failing To Plan Is Planning To Fail. Never be lazy while planning your Financial needs , Remember laziness is nothing but the habit of resting before getting tired.

How Much Insurance Do I Need

  • Here this depends on the size of your family.
  • Standard Of Living you want to maintain.
  • Cost of childcare and care for an Elderly parent.
  • Future expenses such as healthcare and mortgage costs.
  • Final expenses such as funeral costs and legal fees.

Here one most note that there is no clear answer to this question. We live in a world of ever increasing expenses. We just need to look around and see ever rising costs of petrol, fruit, vegetables, electronic necessities, clothes and housing. Here we need to know about future value of money or what a sum of money is worth at a future time period. We all hear of our grandparents saying how cheap fruits, meat and vegetables were during their time. The quantity of a commodity that a rupee could purchase a few years ago has contracted. Typically the rupee loses its purchasing power when there is a general rise in economy price levels called inflation. We all read in the newspapers how the government is trying to control runaway inflation and the effects it has on us such as our loans, housing costs and food expenses. Hence one has to factor in all these points when he has to purchase a term insurance. Here one should always read the fine print on policies for your Insurance Planning. Here we have a funny quote ‘I did not know how expensive air was until I bought a bag of chips…

Purchase Of Policies Online

  • Saves Time: Here one can save precious time which would otherwise be spent visiting an agent. This process is simple, quick and hassle free. Here one can prevent being misled and being subject to fraud by looking up the website Moneymindz.com.
  • Comparison: Here we see a number of people purchasing policies without reading the fine print and without trying to understand the best policy suited for them. Here one can compare online which is the best policy suitable for them.
  • Availibity: Most of these online policies are 10-15% cheaper because of the absence of middlemen and agents. These would be cheaper than the offline policy. This also reduces any mis-selling practices.
  • Easibility of Use: Here one can conduct research online and this helps him to come to the conclusion of the best policy required by him in addition to the knowledge gained on the product. The online sites are easy to use and almost anyone can use it. Please learn about Term Insurance on Moneymindz.com.
  • Security of Data: Here the data is highly secure and private data is not misused. The insurance sector is highly regulated and one should not be afraid of the misappropriation of funds.

Estimates Of Premium Of Term Policies

Here a wide variety of policies are available at different premium rates depending on the term policy. For a premium of around INR 3500 paid annually one can get coverage for a period of around 15 years. The sum assured would be around 20 Lakhs. Similarly we get a policy for around INR 5000-7000 for a period of 25 years for a sum insured of around 40 Lakhs. However rates may vary depending on the policy, age, medical condition of the holder.

I would like to end this article by saying that Being Forewarned Is Being Forearmed. Here one must always use the vast web in order to improve his knowledge on the various Financial Products needed for his Financial Planning. Here one can learn more about Financial Planning by looking up Moneymindz.com.

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Term Insurance