7 Must know things before you buy Term Insurance in 2021

Posted by  Fintra , updated 2020-12-29

7 Must know things before you buy Term Insurance in 2021

Thinking of taking Term Insurance for the safety of your loved ones?
In this blog, Fintra will highlight the vital factors to be considered before finalizing a Term Insurance Plan that provides the maximum and assured benefits.
       

                         Term Life Insurance

Taking a Term Insurance Plan is a major decision in your life, and it should be as perfect as it could be. This huge investment will benefit the insured individual along with its family and loved ones. While opting for a Term Insurance plan, you'll be given a detailed insight about it that also describes various criteria. Have a look at the most important ones:

Name of the beneficiary

Age of the beneficiary

Premium offered by the same Term Insurer
(Monthly)

Kamal

18

Rs. 401/-

Sunil

25

Rs. 519/-

Jarvis

45

Rs. 1,039/-

Ashish

59

Rs. 2,663/-


From the above table, we can conclude that with the age getting older, the premium of a Term Insurance Policy gets higher. So it is advised to get yourself a Term Insurance Plan as soon as you turn 18. That is probably the best time for the lowest premium.

The premium of a Term Insurance Policy is also affected by your gender. For example, for a female, the premium would be a bit less than that for a male candidate.

Let's understand it in a more clear and practical example in the table given below.

Name of the Beneficiary

Gender

Age

Premium offered by the same Term Insurer (Monthly)

Yash

Male

25

Rs. 473/-

Abhilasha

Female

25

Rs. 428/-

Ishan

Male

45

Rs. 1,039/-

Arpita

Female

45

Rs. 875/-

 

This table clearly stated that male and female of the same age also have to pay different premiums for the same Term Insurance Policy.

There are other criteria responsible for the premium you have to pay for your policy and that is whether you consume tobacco or smoke. Smoking and consuming tobacco have an adverse effect on your health, thus, various Term Insurance Companies will ask you to state clearly whether you smoke or consume tobacco. That is also a major factor that can change your premium. We will now look at a table showing us the change of premium between a person who smokes or consumes tobacco and a person who does not.

 

 

Age

Smoker/Tobacco Consumer

Premium offered by the same Term Insurer (Monthly)

Chirag

25

Yes

Rs. 698/-

Mohit

25

No

Rs. 473/-

Komal

40

Yes

Rs. 1,100/-

Shrishti

40

No

Rs. 698/-

 

From the above table, we understood that the premium for the people who consume tobacco or who smoke increases by a good margin. Whereas the people who do not smoke or consume tobacco have to pay a lesser premium in comparison.

 As we all know, that smoking or the consumption of tobacco is extremely harmful. We also learned today that it is very expensive too. So avoid smoking or the consumption of tobacco.

                          Tenure For Thirty Years Monthly Premium

As we can see that for the duration of just 30 years, the monthly premium is calculated at Rs. 1,005/- p.m.

                          Tenure for Forty Years Monthly Premium

 

As we can see that for the duration of 40 years, the monthly premium is calculated at Rs. 1,316/- p.m.

                           Tenure for Forty Five Years Monthly Premium

 

As we can see that for the duration of 45 years, the monthly premium is calculated at Rs. 1,513/- p.m.

                         Tenure for Fifty Nine Years Monthly Premium

 

As we can see that for the maximum duration of 59 years, the monthly premium is calculated at Rs. 1,954/- p.m.

                                                     Term Insurance Tenure

 

        sum assured of fifty lakh

As you can see that for a sum assured of Rs. 50 lakh, you have to pay a premium of Rs. 1,316/- p.m.

       sum assured of seventy five lakh

As you can see that for a sum assured of Rs. 75 lakh, you have to pay a premium of Rs. 1,600/- p.m.

      sum assured of one crore

As you can see that for a sum assured of Rs. 1 crore, you have to pay a premium of Rs. 1,952/- p.m.

     sum assured of two crores

As you can see that for a sum assured of Rs. 2 crores, you have to pay a premium of Rs. 3,108/- p.m.

monthly premium

As we can see that the monthly premium mentioned above is Rs. 1,600/- per month.

half yearly premium

As we can see that the half-yearly premium mentioned above is Rs. 9,478/- for 6 months.

yearly premium

As we can see that the yearly premium mentioned above is Rs. 18,721/- per year.

  1. Numbers of claims handling: It is how many total numbers of claims, the company is handling as of the current time. The total number of claims handling currently by the company should be comparatively less because that indicates the efficiency of the company.
  1. Amount Settled in Last Year: The total amount settles in the last year (in percentage) defines the payment-making efficiency of the company and how well will the company be able to pay you after the maturity of your policy. The big the amount, the better the company and it is recommended to take Term Insurance from that company. 
  1. Claim Rejection Ratio: This is the most important and the most crucial of all the factors. The number of claims rejected by the company can imply the chances of your claim being rejected by the company. This ratio should be very good as even 1% of claims being rejected can make the picture look very bad and not in favour of the insured individual. 

What have we learned from this blog?
                         Term Life Insurance

There are many factors out there that allow you to get the best Term Insurance plan for yourself. Always look there and shortlist the desired Insurance Plan and get yourself insured because we can never predict the future or what’s coming next. Right? Insurance Plans are not something we buy very often and then consume and discard. It is an asset for the insured person and his/her family too. Buying the perfect Insurance Plan could be a hectic task for sure, but it is a necessity nowadays. Moreover, it will provide you with some Tax Benefits as well. Hence, don’t wait for too long and opt for a Term Insurance Plan as soon as you turn 18 years. The sooner the better because you’ll pay cheaper premiums along with offering a whole lot of benefits and perks.

There are many online Term Insurance Premium calculators available on the internet. Use them to determine the premium of your desired company. There you will have to fill in some of your details like your age, mobile number, gender, and whether or not you consume tobacco or do you smoke. Answer all the questions honestly to get a fair idea of the premium you have to pay. You can switch between monthly and yearly premiums. Select the best offer and don’t just go with the cheapest one, also study the company’s goodwill and the reputation of the company in the market and then only you should opt for any insurance company’s policy. Remember the Insurance Companies are also sitting in the market to make profits out there. So don’t do any mistakes and read all the terms and conditions and all the documents before finalizing any policy. Stay safe and get insured.

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