Term Insurance

Term Insurance vs Other Insurance Policies

The life insurance you buy is the security blanket you carry for your family. There are many types of life insurance policies in India. Let’s take a look at them and understand why Term Insurance is the best option when it comes to life insurance:

1. Endowment Plan [Insurance plus Savings]

This life insurance plan gives you a combination of insurance and saving. The premium you pay is divided into two where a certain amount is kept for life cover, while the rest is invested by the insurance company. Sounds amazingly attractive right? Because here if you outlive the policy term, the company will offer a maturity benefit. Moreover, these plans promise to offer bonuses periodically, which are paid either on maturity or to the nominee under death claim. It sounds like it concentrates more on what you get when you live rather than what your loved ones get when you die, which is the whole point of life insurance in the first place. But on death, the maturity is payable to the nominee. But how much is the question!

Let’s say that you take an endowment plan for 30 years for which you pay a premium of Rs 20,000 – Rs. 25,000. What do you get in the end? The maturity sum received would be Rs. 10 lakhs approximately. Would that take care of all the troubles?

Hence it’s important to remember that the whole purpose of a life insurance policy is not to make returns rather, to protect your family in the event of your untimely death. It’s best not to mix life insurance with investment options. To make returns there are other options like Mutual Funds, that help you to earn substantial returns by making investments that are based on your financial goal and risk appetite.

2. Unit-linked insurance plan (ULIP)

This particular combination of insurance and investment is a comprehensive life insurance products that look to provide productivity towards the money invested. The premium you pay towards a ULIP goes partly as your risk cover (insurance) while the rest is invested in funds. You can invest in various funds (bonds, equities, debts, market funds, hybrid funds) offered by the company based on your risk appetite.

For instance, you take a ULIP for 20 years with premium payouts of 20,000 every year, and you have assured a sum of Rs 2 lakhs along with whatever amount you receive on an investment. The great thing about it is that you are putting your money to good use, but you might as well earn the returns through Mutual Funds that give you more flexibility as per your risk appetite and have the freedom to invest with complete transparency in secure platforms like MyWay Wealth.

3. Money Back – Periodic returns with insurance cover

A unique kind of insurance package, wherein a specific portion of the sum assured is paid to the insured on periodic intervals as a survival benefit. It serves like a source of income in a way along with the eligibility to receive the bonuses declared by the company from time to time. This is a way for you to meet your short-term financial goals.

For example, you take on a Money-back Policy for 20 years with Rs.20,000 – Rs.25,000 as your premium each year. You have been assured a sum of Rs.5 lakh which will be paid to you on regular intervals along with accrued bonuses

4. Whole Life Insurance – Life coverage to the life assured for whole life

Unlike the term insurance, which is for a specified term, whole life insurance covers you for your whole life, or in some cases, up to the age of 100 years. The sum of coverage is decided at the time you purchase the policy and is paid to the person you nominate the time of claim along with bonuses if any. But say you were to outlive the age of 100 years, the company would pay you the matured coverage amount.

In comparison to term plans, the premiums are much higher but it offers the facility for partial withdrawals after the premium payment term.

3. Term Plan [Pure risk cover] – Recommended

This is true life insurance. Unlike other life insurance products, this concentrates on one thing alone, covering for the loss of your life. This plan assures the dependants a specific sum of coverage with no hassles whatsoever. There is an option to widen up the coverage. The death benefit can be payable as a lump sum, monthly payouts, or a combination of both as per your choice. The only catch is that there is no payout if the life assured outlives the policy term.

For instance, let’s say you are a non-smoker male looking for a term life plan of Rs.1 crore cover. It will cost you approximately Rs.6, 800 to Rs.10, 500 every year. Doesn’t seem too costly, does it? Term insurance is best known for delivering high assured coverage at low premium rates. Say you’re the breadwinner of the family, in the case of your untimely death, your family is supported with an enormous amount of money which helps them to replace the loss of your income. Moreover, the money could be utilized to pay off loans, monthly household expenses, child’s education, child’s marriage, etc.

Now that you know Term insurance is the best form of life insurance. Don’t hesitate to buy a Term Insurance Plan with MyWay Wealth today.

Term Insurance - Ashish

Term Insurance Explained: What, Why and How

Term insurance is a pure risk cover product. It pays a benefit only if the policyholder dies during the period for which one is insured. Term life insurance provides for life insurance coverage for a specified term of years for a specified premium. The premium buys protection in the event of death and nothing else.

The three key factors to be considered in term insurance are:

  • Sum assured (protection or death benefit)
  • Premium to be paid (the cost to the insured), and
  • Length of coverage (term).
term insurance

Do women need Term Insurance?

 

“Someone is sitting in the shade today because someone planted a tree a long time ago.”

-Warren Buffett

This phrase is so true when we speak about our Mothers. Mothers play such a significant role in our lives. The lessons they teach structure our lives beautifully. A woman has so many responsibilities to fulfill at various stages of her life, be it the role of a daughter, a sister, a wife, a mother and if you’re a working woman, then you’re even the bread earner of the family. As women, we know every nook and corner of our house and understand the needs of every family member; their favorite food, their outing spot, the gadgets they like and even their financial needs. We always want to protect our families from every trouble.

But what if we are not around our family? What happens when we cannot cater to their needs? What if we face an untimely death? Still, as mothers, we want our families to have a peaceful life after we have left them. For this, we need to prepare our families both mentally and financially. This arises the need for Women especially to have

“Term Insurance”

Term Insurance is the purest form of Life insurance, wherein you need to pay a fixed amount as a premium to a certain amount known as Sum Assured. And in case of your unfortunate death during the policy term, your family receives the amount.

Why should working women opt for Term Insurance?

  • The conventional thought is that men are the bread earners of the family, even though women work. Let’s imagine your income stops for a while. Can anything substitute that income? No, right? So a women’s salary is also a major source of income for the family. Also, Term insurance is provided based on the total income of the family. Hence your salary matters.
  • Since you’re a working woman you would help your partner in taking care of the expenses of your family. A term cover is essential because, in the absence of your income, it would help your partner to handle the expenses all by himself. Let’s say, for example, school fees of the children, EMI, loan, rent, etc.

What is the use of a term plan for a homemaker?

  • Even if you don’t make monetary contributions, your absence would still leave a huge void in your family.
  • Your partner or your siblings would have to carry forward your responsibilities.
  • With the help of term insurance, your partner or siblings can cut down on their work hours or part-time jobs and dedicate their time in fulfilling your responsibilities. (Planning of your child’s marriage /education or taking care of your parent’s medical needs). They would receive a fixed amount of income, that would cater to their financial necessities and goals.

Women receive certain special benefits with term insurance such as:

  • Special premium rates especially for women.
  • If you don’t smoke, then you receive attractive premium rate benefits.
  • Comprehensive protection with the option to choose Critical illnesses rider and other added riders as well with your term plan

How do I get Term Insurance done?

Working women normally have a busy schedule, an easier way to handle finances would be to use digital platforms. MyWay Wealth – India’s most trusted app for Direct Mutual Funds, is one such digital platform that offers Term Insurance. All you need is a few minutes on your smartphone and you will be able to provide a cover of 1 crore to your family, with the same amount with which you get a Netflix monthly subscription.

You may delay but life will not, and lost time is never found again. Hence plan your Term Insurance on MyWay Wealth app today and be rest assured regarding your families well-being. 

Term Insurance

5 Reasons people should NOT opt out of Term Insurance

Do you know that there are so many different kinds of Life Insurance? You have your Unit linked insurance plan (ULIP) which gives you insurance along with an investment opportunity. There are these very famous Endowment Plans that promise insurance along with savings. And many more like Money back, Child’s Plan, Retirement Plans, etc. Term insurance, also known as “pure risk cover” is one such variant of Life insurance policy where the dependents get a sum assured by the insurer, redeemable on the death of the policyholder during the tenure of the policy. It is quite simple and extremely valuable. However, people tend to perceive it as a costly expense compared to other insurance plans, as there are no returns. Here are 5 reasons why people opt out of term insurance and shouldn’t do so:

1: I don’t get my money back!

Insurance is bought for all the wrong reasons like greed, taxes, fear, etc but the only real reason to buy insurance is security. Put an endowment plan under the microscope and see it serves the purpose for which you pay the premium. Can you justify it? No, because it is a product that dances around security instead of actually providing it. Term insurance is very simple in terms of providing absolute security. You pay a price to ensure your dependents of any troubles after you die. It is not a tool of investment, but a guarantee to receive a fixed amount if something happened to you. If you are hungry for returns the most ideal option is an investment in Mutual Funds. But term insurance will return a fixed lump sum in the event of your death.

 2: It’s very expensive!

When you check on the amount a person normally pays for an insurance policy compared against the average term insurance premium will show you the truth. Term insurance is lower in terms of premium as compared to endowment plans and Unit-linked plans. To many people, it seems like a costly affair, but what you must remember is the pot of gold in the end instead of looking solely at the current costs to bear.

3: Other schemes have better benefits!

The term insurance simply acts as a financial safeguard for the family, it is affordable, receives tax deduction under Section 80C and the best of all is the value over cost. The premium you pay to maintain the policy adds up to peanuts compared to the real value of the policy. A popular diversion which leads to losing the essential aim of insurance is the fancy add-ons that other schemes provide. Don’t mix your investment with your insurance!

4: I have more important things!

People often opt out of paying their term insurance because they find it plausible to spend it on things like education, marriage, medical bills, etc. But you just have to ask yourself what happens when you die? Who will take care of it all? It doesn’t mean you shouldn’t save up for such things, but in order to avoid unloading these burdens on your loved ones, it is recommended to take term insurance.

5: It’s a luxury, not a need!

There is a false impression going around that term insurance is a luxury and it is not a necessity for everyone. You spend time and money every single day to increase their security in terms of health, financials, etc. So it seems fitting to protect the ones you love from any troubles when you’re not around. It is for everyone who wants to keep their dependents safe.

Ignorance is never bliss in our world. It is always good to understand what you want before you lock into any insurance scheme, verify the big picture of every option you have.