Term Life Insurance and Term Insurance are simple and cost-effective means of ensuring that loved ones remain protected financially regardless of anything that may happen. These kinds of insurance pay for a term period and give a sum assured if the insured meets death in the specified term. While other insurance products blend savings and investment with protection, term insurance simply lays down protection for your family’s future at a hassle-free price.
What makes Term Insurance so Special?
Pure Protection: Term insurance is purely a protection tool and not at all an endowment plan or ULIP. There is no saving or investment element attached to it. That means every penny of premium goes into protecting your loved ones with financial security cover.
Relatively Low Premiums: Term life insurance can provide higher coverage at relatively low premiums. In comparison, for example, a coverage amount of ₹1 crore would come with a relatively small premium compared to other life insurance plans that offer savings or even investments.
Versatility in Coverage: You can choose the term insurance coverage amount and policy term. The reasons behind this versatility are that you can base your coverage on your financial obligations, for example, payment of a home loan, children’s education, or income to your family in your absence.
The Role of Term Life Insurance in Your Financial Plan
Term life insurance is designed to complement an important void in your plan of finance. It’s the “what if” type, you know? You acquire a lot of wealth during your lifetime, but there’s always a plan to make sure your dependents continue their lifestyle after you’re gone. Here are some reasons why term life insurance should be a part of your financial plan:
Income replacement: You are a bread earner: And there is reliance on your income to meet household daily needs and achieve plans; this can be catered for by term life insurance as it would replace your income when you are no longer around.
Debt Repayment: From a house loan to a personal loan and credit card debt, the outstanding liability is borne by your family. It is this death benefit from the term insurance that would clear these debts, ensuring your family is not burdened with its financial stress.
Secure your children’s future: For parents, the most intimidating aspect is possibly ensuring that their children’s education and future goals are not distressed. The amount that is received as pay-outs under term insurance can be used to pay for higher education or anything else, which would be important in securing your children’s future.
Coverage against Mediclaim: A few policies enable the addition of add-on riders for critical illness coverage or accidental death benefits. Such add-ons will give you a secondary layer of cover for medical costs arising out of a critical illness or accidental death, where basic health insurance might not suffice.
Comparison of Term Insurance and Other Life Insurance Plans
Endowment Plans: When term insurance offers a huge cover at a minuscule premium, endowment plans combine life cover with savings. However, the premium for endowment plans has to be paid heavily, and the life cover is generally much smaller.
ULIPs: Unit Linked Insurance Plans also offer life cover in addition to investment in equity and debt funds. ULIPs facilitate growth but carry heavier premiums and added complexity compared to term insurance.
Whole Life Insurance: This type of policy provides insurance for the lifetime of the policyholder and also has a cash value. In this case, it comes with a very high cost, with much higher premiums, and the emphasis on investments may reduce the amount of life cover available at the same premium.
How to Select the Appropriate Term Life Insurance Policy
Assess Your Coverage Needs: As an unwritten rule, there should be coverage as much as 10 to 15 times your annual income. This will ensure that your family has adequate funds to look after costs and future planning in case of your demise.
Suitable Term: For your policy term, you can ideally match it with the term of your financial liabilities. So if you are on a mortgage or saving for the education of your children, you can choose a term that matches the tenure of such expenses.
Inclusion of Riders: The riders will customize your policy with other forms of coverage like critical illness coverage or accidental death benefits. Never forget that such riders increase the premium amount.
Manages Term Insurance with the HDFC Life Insurance App
Forget the complexity associated with buying and managing insurance. The HDFC Life Insurance App makes buying, managing, and even tracking your term life insurance policy simple.
Key Features of HDFC Life Insurance App
Easy Purchase of Policy: One can compare term insurance policies for the policy one can purchase through the app. The process is entirely paperless and free of any other lengthy procedures.
Premium Calculators: With the premium calculator in the app, you will get an estimate of how much coverage you will need and thus what premium you can afford to pay, so you get the right coverage without overpaying.
Policy Management: Be it payment of premiums, tracking policy details and beneficiary changes, this application will ensure you have all your policy administration done efficiently.
Claims Support: In case of any claim, the app guides you on the filing and tracking of your claims so that while you are going through this process, your family is not stressed due to it.
Top-Up and Add Riders: You can top-up your current policy with accidental death cover or critical illness cover through the application or add riders like critical illness, total permanent disablement, etc. that add a few clicks to reinforce your protection.
Conclusion
Term Life Insurance is the best way to ensure that your family will stand financially after you are gone. It is the cheapest method of providing large coverage and is thus well-suited for covering individuals at any point in life. The ability to choose your term of the policy and add riders makes it possible to tailor the insurance coverage to your particular needs. With HDFC Life Insurance App, which provides ease in management of policies, the whole process of buying and maintaining a term insurance policy has never been easy.
