Here's all you need to know about term life insurance

The pandemic around us is real and the world is yet to identify a solution for now. While there is no solution that is available immediately, there is no need to fear or panic. It is important to recognise that this is new and completely unknown that has hit all of us. A pandemic of this magnitude calls for action in behaviour, so drop tactical thinking and prepare for long term!

Read: Life insurance sector witnesses 18.6% drop in first-year premium: CARE Ratings

Just as the pandemic has bought upon the masses these lessons, planned and systematic behaviour in protecting their families is the key for a successful financial stability in the long term.

Here are 3 reasons to buy your term insurance plan:

It is simple & affordable: A term plan helps one prepare for uncertainties. One of the most cost-effective methods by which one can mitigate risk is term insurance. This product is popular primarily because it offers high sum assured at very low premiums.

It protects the most important people in your life: Many young people avoid buying insurance, thinking it is an unnecessary expense. People in their early 30’s believe that they are fit, and nothing can happen to them ever. However, 30’s is the best age to purchase, as one gets married and have kids at this age.

Also Read: COVID-19: IRDAI again extends grace period for life insurance policies

It gives you peace of mind: Term insurance gives you peace of mind knowing that your loved ones will be financially secure when you are not around. They will have the much-needed financial security to not only meet their day-to-day needs but also to fulfil their dreams. The main aim of your life is always to see that the loved ones are happy and secure.

Digitisation

Digitisation has helped to reach to the potential customers. This has made buying the term insurance very easy for the customers. Consumers can opt for the term insurance plan with just a click of the button, without ever having to leave from home. India has 504 million active internet users now, and 55% of the users are from rural India (IAMAI Report). The availability of digital tools has made people tech-savvy, now even to buy groceries, medicines, and other essentials for consumption, people opt for digital tools.

Also Read: Non-life insurers register 12% rise in FY20 premium at Rs 1.89 lakh crore

This has been very much included in the business continuity plan of the insurers. The digitalisation of the industry has proved to be a boon, as it has helped in higher penetration of life insurance among the masses. Now there are various alternative digital premium payments available for the customers. 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.

Opt for the most affordable plan:

1. Choose a plan and cover that is right for you: Life insurance offers a variety of policy covers and term lengths (from 1 year to 30 years); personalize your coverage to fit the needs of your loved ones and your budget.

2. Apply online: Applying for a term life policy is simple and user-friendly. Online experience will seamlessly take you through questions about your age, health, lifestyle and medical history so your policy can be appropriately priced. Once your application is submitted, we at Aegon Life process the information in real time to provide decision on coverage eligibility and your rate. If approved, you can start coverage immediately.

Also Read: A life insurance solution with complete protection

3. For the sake of absolute transparency, majority of the 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, letting them skip this process altogether.

If the life insurance company has enough understanding of your health and risk, the formality of a test may not be needed. Quick tip: It is very important to be honest when completing your application. The issuance of the benefits depends on the truthfulness of answers in the application

4. Once the coverage is in place, simply make the premium payments, which are mostly automatically drawn from the policyholder’s bank account if he/she opts for such options and you will be covered! Most term plans guarantee level premiums for the duration of the term, so your monthly rate will never change.

Also Read: Cabinet approves infusion of Rs 12,450 crore in three PSU insurance firms

5. Add-ons and riders that can provide a policyholder with a good coverage at marginal premiums. For example: A Term plan cover for 35 years old and 1 Cr cover up to age 60 costs around Rs 663 per month. Adding Rs 10 Lakh of Critical Illness increases the premium by Rs 314 per month. Plus Rs 50 Lakh of accidental cover can be purchased with in Rs 240 per month. All in all, Rs 1,217 per month (pre-tax) or Rs 1,336 per month (after taxes).

This is all it takes to feel the peace of mind, less than your next month’s subscription of your favourite web platform or your next month’s broadband expenses. Take charge now, on what matters most!

(The writer is CFO and Principal Officer, Aegon Life Insurance)