Why buying a term plan online is a good idea!

We explain why buying term insurance is a great idea – and why buying it online is even better.

The rush of life is such that it leaves hardly any time for you to ponder and take stock of your situation. There are so many deadlines to meet, so many tasks to complete before you fall asleep at night…only to start the same cycle all over again the next day.

This pattern of events can become rudely disturbed when life suddenly throws a challenge your way. Left to your own devices, you will do whatever it takes to bounce back from the brink – but what about your loved ones? Are they equipped to deal with the financial repercussions of your absence?

You might feel that your savings and investment money are sufficient to help them tide over a financial crisis. But the money may soon run out, or not be enough to begin with.

Instead of worrying about what happens next, here’s a suggestion for what you should do next: buy a term plan and say goodbye to any chance of your loved ones feeling financially insecure in the future.

What is term insurance?

Term insurance is a life insurance policy that pays a high sum assured amount. However, it differs from other life insurance products in two aspects:

  • It does not have a maturity benefit, only a death benefit. This simply means that if you outlive the policy term, then you do not receive the paid premiums. The sum assured is paid only on the untimely demise of the policy holder, to the plan nominee(s).
  • However, the term plan has an affordable premium payment and a large sum assured. This makes it an attractive proposition for those who would like adequate coverage for their loved ones without shelling out too much money on expensive premiums. In fact, leading term plans in India today cost about Rs 17 per day and promise a high sum assured of Rs 1 crore or above[1], such as the Aviva i-Term Smart plan.
  • Newer term insurance plans in India offer the chance of choosing the pay-out options for the family. You can choose the premium pay-out frequency basis your family’s future needs. For instance, if they require monthly income to support household expenses, then a monthly pay-out is better. Or you can choose a quarterly pay-out to support your children’s foreign education.

Be sure to buy a term plan online. The premiums cost less in online term plans, for various reasons.

Why buying a term plan online is better…[2]

Buying an online term plan has many benefits and no disadvantages. Consider the following benefits of buying the term plan online:

  • It is easier to research various term plans online than offline. There are reputed insurance aggregator sites that list the best term insurance plans as per premium amount, claim settlement process, overall popularity, etc. You can get a good idea of which term insurance to opt for basis the information you find on these sites. Prominent business publications also list the best performing policies in this category on their portals.[3]
  • Since you buy the term plan online directly from the insurance provider without the intervention of an insurance broker, the insurer does not need to pay a commission to any middleman. This is money saved, which the insurer then passes on to the customer by way of lower premiums.
  • You also get lower premiums if you are in your 20s and a non-smoker. Insurance providers are pleased to sell term plans to younger age groups with no health issues and a regular income.
  • Besides, the lower premiums are due to lower operational costs on the Internet. Insurance providers pass on all these savings to customers who buy term plans online.

Do factor in future inflation and the rise in living expenses when calculating the desired sum assured, along with your family’s future needs. You can use an online term plan calculator to make your calculations and arrive at the final figures. The calculator will tell you how much premium you need to pay vis-à-vis the sum assured figure.

[1]https://www.avivaindia.com/term-plan/aviva-iterm-smart

[2]https://economictimes.indiatimes.com/wealth/insure/advantages-of-online-insurance/articleshow/29098660.cms

[3]https://www.bankbazaar.com/insurance/term-insurance.html?ck=Y%2BziX71XnZjIM9ZwEflsyDYlRL7gaN4W0xhuJSr9Iq7aMYwRm2IPACTQB2XBBtGG&rc=1

Post Author: Kacy Tami