How to go about buying a term insurance plan

Published: July 20, 2020 7:10 AM

Term insurance has made its presence felt on e-commerce platforms, making it more accessible to customers. Choose a plan and cover that is right for you

Term insurance has also made its presence felt on the leading e-commerce platforms, making it more accessible to the customers than earlierTerm insurance has also made its presence felt on the leading e-commerce platforms, making it more accessible to the customers than earlier

By Satishwar Balakrishnan

A term plan helps one prepare for uncertainties. One of the most cost-effective methods by which one can mitigate risk is a term insurance. It gives you peace of mind knowing that your loved ones will be financially secure when you are not around.

Digitisation has helped to reach to the potential customers. This has made buying a term insurance easy for customers as they can buy the cover with just a click of the button. From e-KYC to online applications, now the insurance plans are available on a click, and you can buy insurance policy in minutes.

Term insurance has also made its presence felt on the leading e-commerce platforms, making it more accessible to the customers than earlier. Choose a plan and cover that is right for you. Life insurance offers a variety of policy covers and term lengths (from one year to 30 years); personalise your coverage to fit the needs of your loved ones and your budget.

Coverage and rates
Many customers need to take a medical test to finalise coverage and rates. In some cases, though, some customers may qualify for a cover without medicals. If the life insurance company has an enough understanding of your health and risk, the formality of a test may not be needed.

Be honest when completing your application. The issuance of the benefits depends on the truthfulness of answers in the application. After the coverage is determined, make the premium payments. Also, add-ons and riders can provide a policyholder with a good coverage at marginal premiums.

For example, a term plan for a 35-year old for Rs 1 crore cover up to age 60 will cost around `663 per month. Adding Rs 10 lakh of critical illness will cost Rs 314 per month. Plus, Rs 50 lakh of accidental cover can be purchased for Rs 240 per month. So, the total cost will be for Rs 1,217 a month (pre-tax) or Rs 1,336 (after taxes). This is all it takes to buy peace of mind.

The writer is CFO and Principal Officer, Aegon Life Insurance

Do you know What is ? FE Knowledge Desk explains each of these and more in detail at Financial Express Explained. Also get Live BSE/NSE Stock Prices, latest NAV of Mutual Funds, Best equity funds, Top Gainers, Top Losers on Financial Express. Don’t forget to try our free Income Tax Calculator tool.

Financial Express is now on Telegram. Click here to join our channel and stay updated with the latest Biz news and updates.

Next Stories
1Individualised APE for private life insurers falls 7% in July; for LIC it was up by 10%
2Health insurance misconceptions among millennials – Get clarity now
3International Youth Day 2020: Health insurance sees major takers in Millennials, post COVID-19