Which is the Most Affordable Life Insurance Plan?
Financial planning plays a vital role in safeguarding oneself from the financial turbulences of life. As life is uncertain and events are unpredictable, it is essential to be prepared to face any circumstance, especially on the financial front.
In order to achieve this, it is advised to start investing at an early age or in an early phase of life by buying life insurance plans or term plans. While buying a term insurance policy, we often get confused as to which one we should go for. Hence, to simplify this for you, insurance service providers such as Tata AIA life insurance and others provide different term plans to meet your requirements.
While choosing these plans, one often tries to buy affordable life insurance plans and further considers different aspects such as benefits, premium amount, etc. But, the main question that comes to mind is how one can buy an affordable life insurance policy. What factors to consider for the same?
Thus, we have provided insights as to how one can decide and buy the most affordable life insurance plan. Read more and learn about it in detail.
What is Life Insurance?
So, first, let us understand the meaning of Life Insurance. A life insurance or term insurance policy is an insurance policy that financially secures the future of the policyholder as well as his/her family members.
The policyholder needs to pay a premium amount. However, in case of the demise of the policyholder, the insurance service provider company will pay the amount to the nominee/family member/loved ones of the deceased. This further creates financial cover for the family members without depending upon others for financial help.
What is the Benefit of Buying a Life Insurance Policy?
To understand this plan better, we have listed the benefits of buying a life insurance/term insurance policy below:
Imparts Tax Benefits to the Policyholder and Nominee
As per Section 80C of the Income Tax Act, 1961, the amount paid as a premium for a term insurance plan can be claimed by the policyholder for a tax deduction. Moreover, as per Section 10(10D) of the Income Tax Act, 1961, the death benefit which has been received by the nominee or family members is tax-free.
Ensures Financial/monetary Well-being and Security of Family
The key objective behind buying a term plan or term insurance policy is to safeguard the future of the family members on monetary grounds. As life is not in one’s hands, we have to prepare ourselves as well as our family members to face it ahead. Term insurance is one such financial instrument that takes care of the family’s needs after the death of the policyholder.
Benefits of Adding a Rider
The policyholders can increase the scope of the term plan by adding riders to their policy. The insurance services providers such as Tata AIA Insurance and others allow the policyholders to select riders, namely, accidental death benefit, waiver of premium benefit, critical illness cover, etc., for adding to their policy. This enhances the term insurance policy in hand and imparts additional benefits to the policyholder and nominee.
Factors to Consider Before Buying an Affordable Term Life Insurance Policy
When it comes to buying a term insurance policy, people usually consider a plan which is cheap and affordable. But, these are not the only two things that one should consider. What if the plan is not sufficient to meet the financial needs of the family? What if there is a rejection of the term insurance claim? Hence, we have listed some essential points to consider:
Term Plan Claim
It has been seen that the claim rejection rate for the cheapest term plan is more than 50%. Hence, if the policyholder goes for a cheap term plan and, due to some reason, the claim gets rejected, then the family members and loved ones will not get any financial amount post-demise of the policyholder. Also, the premium paid to date will not be considered.
Period of Term Plan
People should buy a term plan which has a longer tenure. Insurance companies usually provide term plans with a tenure of 35 to 50 years. This will ensure coverage for a longer period of time.
Claim Settlement Ratio of the Insurance Service Provider
There is a high possibility of a low claim settlement ratio in cases where the companies are providing cheap term plans and less coverage. This ratio will help policyholders in understanding the efficiency of the insurer in settling claims. Thus, one should go for an insurance company whose claim settlement ratio is on the higher side.
Choosing Term Plan as Per One’s Age:
Age plays an important role when you are buying an affordable life insurance policy or a term plan. The scenario changes in different phases of life. Hence, one needs to make a correct and informed decision in their 20s, 30s, 40s, and 50s. The earlier one start, the better the benefits the policyholder will receive. Thus, check out different term plans by Tata AIA policy or any other policy and buy it now.
In order to secure the future of one’s loved ones, it is essential to research, evaluate and plan to buy an appropriate life insurance plan. Consider all the term insurance benefits of life insurance into consideration and buy the one which fulfills your needs and requirements. With a better-term plan in hand, one can get the courage to face life ahead without any worries.