How to decide the cover of term insurance

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Term insurance is a type of life insurance policy that provides coverage for a limited period at a fixed payout rate. If the life assured dies during the term of the policy, the cover amount is paid to the nominee. It provides financial security to the family. So don’t miss out on the right term insurance, not just for yourself but for your family.

Why is it important?

Term insurance is a basic life insurance policy, which gives you a cover of protection. Many times people postpone term plans because they consider it an expense, but its premium is not expensive. It starts with just Rs 400 and gets a good life cover. In case of the sudden death of the insured, the family gets the entire sum assured i.e. sum insured.

How to decide the cover

One should assess his/her income and decide on the insurance cover based on that. Experts believe that life insurance should be 15-20 times the income. The cover can also be decided according to age. If you are below 30 years of age, then take a cover of 25-30 times of the income. If you are between 30-45 years then take insurance of 15-20 times of the income and if above 45 years then 10 times the amount of income should be insured. It is also important to estimate how many people are dependent on your income.

It is wise to buy term insurance early. At an early age, you will be able to lock in the insurance at a cheaper premium. Younger people have lower premiums. The premium once paid will always be fixed. Therefore, the sooner you buy term insurance, the more benefits you will be in.

Keep in mind

The premium of a term plan is actually dependent on three factors- your age, amount of coverage and the term of the policy. For the same age, term and life cover, the insurance company may charge a different amount from a different person. You can compare different features on the online website before buying a term insurance policy. Only after this, you should buy a term insurance plan.

 Online purchase benefits

– By buying term insurance online, one does not have to pay commission to any intermediary. – Buying online reduces the cost of the premium for you and makes insurance cheaper. – If you buy online, you fill in all the details yourself, so there is less scope for mistakes. – Online settlement can also be done at the time of claim. You can apply for this online only. – Online claim is also settled quickly.