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What is a term insurance policy
The term insurance is a life insurance policy in which the l </ a> insured pays a premium to the insurer at regular intervals; monthly / quarterly / annual, and in turn, the insurer promises to pay the nominee a fixed amount of coverage that is predetermined, if the insured person dies within that specified time. If, in the event that the individual survives during the specified term, no claim can be claimed from the insurance company. It's one of the simplest insurance plans that can be easily understood. All you have to do is pay the premium and ensure the safety of your family for the chosen period. Remember, term insurance is not for you but for your family when you are no longer with them.
The problem of asymmetrical information is more or less eliminated from this type of policy since both parties have a complete knowledge of coverage, payment of premiums and other important details.
When should a person take a term insurance plan?
A very common question that comes to mind when one is considering buying a term plan online. Often, people are unable to decide at what age should buy the insurance policy.
Well, the best time to buy a font is when he is young and active. 30 years is considered a perfect age for a person to make that decision. At this stage of life, an individual is mature enough to think about family members and their future. He or she attains financial stability and becomes responsible for handling all kinds of situations in life.
Imagine a person who is about 30 years old, owns a car and a house and is planning to get married. He or she is placed in a reputable company and earns well. Suppose, he or she is the breadwinner in the whole family. It is the moment when the person acts with maturity and thinks about future uncertainties. It's human nature to worry about what will happen the next day. Buying a term insurance at this stage of life is a good idea!
Here are some of the valid reasons why a person should take out life insurance at the age of 30:
- Provides financial security when you need it the most
If you consult a financial planner about where to invest and what policy to buy, he will always recommend you to buy term insurance . The logic behind the same thing is very simple.
- The term insurance policy has an element of flexibility. If you stop paying the premium, your policy becomes void and you receive nothing. No loss, no gain. But if the same situation occurs in the case of cash value policies, you must face a financial loss because the savings portion of the policy can not be fully recovered.
- Term insurance policies provide you with a renewable and convertible benefit. You can easily opt for another term policy without a lot of formalities and can also switch to a new type of insurance policy, respectively.
Investing while you're young gives you an added bonus of paying low premiums. This is because you are in good health and the risk factor is not that bad.
The term insurance premium for a man or a woman in the 30s is three times lower than that of an individual aged forty or more years or even older .
When you apply for a term insurance plan, you must undergo a medical examination. At this point, if a serious lifestyle illness is identified, the company refuses to provide you with coverage. The chances of such rejections are minimal when you are in your early 30s.
- The tax savings under section 80C
The money you save is the # 39, money you earn. One Should Never Miss This Opportunity
Under Section 80C, you can get deductions in your premium term insurance .
The purchase of term insurance therefore gives you two benefits.
The money saved on the tax can be used for other useful things.
When buying an insurance policy, you do not only have to pay the premium, but there are many other fees that need to be paid also. The commissions billed by the agents are specified in the premium allocation fees. A fixed percentage of the premium goes to the broker in the form of brokerage. This is a recurring expense and varies from one plan to the other.
According to some insurance plans, the brokerage could represent up to thirty or forty percent of the initial premium, and then decline depending on the successive payments. However, for term insurance, these fees are the lowest and usually represent five to six percent of the premium paid. If you choose to buy the police online, the brokerage could be almost zero.
Claims for benefits under insurance are few in number compared to any other plan, provided your policy is active for more than 10 years. years at least. Be sure to disclose all important details about yourself to the insurance company. Any false information could prove to be a big problem for you and your family.
In accordance with the Insurance Regulatory and Development Authority (IRDA), no claim may be rejected once the policy has completed two years of delay.
At 30, an individual is responsible enough to handle all the uncertainties of life. But you never know what tomorrow will bring. Therefore, you must always be ready for the worst. And this can be done with the help of temporary insurance plans . Study carefully everything about the plan, then make a decision at the right time. Delaying the process will only make it harder for you. It does not make sense to buy term insurance in your 50s.
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