“Life is a road where uncertainties have hidden homes” ~ Anonymous.
One fine day you plan a trip to Manali with your family. While trekking, you feel uneasiness in your chest, and by the time you reach the hospital, you meet with death.
What about your family with your aged parents, widow, and two toddlers? Who will take care of them? Will your wife’s salary be enough to run a family of five?
She might manage, but it would not be easy to make both ends meet because she has to take care of the hospital expenses of the aged in-laws, run the household, and children’s education.
It is where life insurance comes into play as an unsung warrior. This blog will guide you in understanding:
- What is life insurance? And why is it important?
- What is the best type of life insurance?
- What is India’s best term insurance plans that you can consider buying online?
- What are the points to consider while buying a term insurance plan?
What is Life Insurance?
Life insurance is where the insurance company pays a sum assured (as per the Plan) is paid to the nominees designated by the policyholder after their death in exchange for the premium payments made towards a life insurance policy.
According to the agreement, in the case of the policyholder’s death or if the policy matures, the insurer will pay the individual or his family a lump sum payment after a specific time.
- The experts have predicted that the life insurance industry will grow at a CAGR of 5.3% between 2019 and 2023.
- In FY21, India’s insurance penetration was 4.2 percent, with life insurance penetration at 3.2 percent and non-life insurance penetration at 1.0 percent. In terms of insurance density, India’s overall density in FY21 was US$78.
Life insurance acts like a life jacket for your immediate family when you meet with unfortunate happenings in life, such as death, partial or complete disability, chronic illness, etc.
Apart from death benefits, you can buy life insurance for the following reasons:
- Tax Savings
- Retirement Perks
- To provide financial security after your death
- Economic benefit for long term goals
- Helps in child’s future education expenses
Life insurance is a broad umbrella that holds a cluster of multiple types of life insurance depending on various types of users according to their needs and economic limitations, and they are as follows:
- Term insurance
- Unit Linked Insurance Plans (ULIP)
- Endowment plans
- Group Life Insurance
- Retirement Plans
- Savings Plans
- Child Insurance Plans
- Health Insurance Plans
But, out of all these, the best and the most preferred type of life insurance by Indians are – Term Insurance.
What is Term Insurance, and why is it important?
As the name suggests, term insurance is a life insurance policy where the policyholder invests in term insurance for a specific set of years.
It is considered one of the purest types of life insurance because it assures a family’s financial stability after your death and provides you the choice of protecting them from chronic illnesses such as cancer and covering other benefits with add-on Riders.
One should think of buying a term insurance plan in their twenties because you are young, earning, and multi-task, as you have the zeal to work hard and are at your prime.
Some of the benefits of having term insurance at a younger age are as follows:
- Low Premium: The premium you pay to the insurance company would be lower if you buy it at a younger age and depends upon the Plan you buy.
- Monetary safety net during an unexpected crisis
- You can add Riders to weave more inclusive and safe.
- Tax Benefits
3 Best Term Insurance Plans to consider in 2022
There are multiple term insurance plans in India that one can consider buying in 2023, but are all of them the best?
It is where the proper research steps into the scene. You might be served with a plethora of term insurance options, but you should consider the right insurance based on the following things:
- Clear your priorities and understand your purpose in buying term insurance.
- Understand and have a clear idea about the monthly and annual spending in the family.
- Anticipate the possible arriving changes – marriage, kids, education, medical needs for aged parents, and uninvited emergencies.
- Determine your term plan period.
- Know your payout option
- Understand the Plan and understand whether you can customise it accordingly.
There are several factors that one must consider before buying term insurance. Therefore, we have handpicked five best term insurance plans one can consider buying online in 2022, and they are as follows:
List of best Term Insurance Plans in India –
Aditya Birla Sun Life Insurance Life Shield Plan
ABSLI’s Life Shield Plan is one of the best and safe term insurance plans inclusive for many types of users.
Features are as follows:
They offer 8 Plan Options:
- Level Term Assurance
- Level Term Assurance with Waiver of Premium (WOP) Benefits
- Increasing Term Assurance
- Increasing Term Assurance with Waiver of Premium (WOP) Benefits
- Decreasing Term Assurance
- Decreasing Term Assurance with Waiver of Premium (WOP) Benefits
- Return of Premium
- Return of Premium with Waiver of Premium (WOP) Benefit
It gives death benefits. It means that if you die within the policy term, the death benefit will be paid to your nominee.
This term plan offers a waiver of premium. All future premiums will be waived if the life insured suffers from complete and permanent incapacity or a severe illness during the policy period.
It offers enhanced life stage protection. Protection requirements change as you progress through life, owing to the advent of pleasant events such as marriage and children. Here, you can opt to expand your coverage on the occasion of each of the events without having to undergo a new medical check.
Return of Premium: Under this provision, if you select a specific Plan Option, the sum of all premiums you pay will be repaid on the policy maturity date if you survive the policy period.
Want to know more? Then click here to have detailed knowledge about ABSLI Life Shield Plan.
Aditya Birla Sun Life Insurance DigiShield Plan
Either call it ABSLI DigiShield Plan or Sabka Vala Term Plan; this term plan is a comprehensive package that offers ten different plan alternatives based on your specific demands.
The features are as follows:
The 10 Options are-
- Level Cover Option
- Increasing Cover Option
- Sum Assured Reduction Option
- Whole Life Option (Level Cover)
- Whole Life Option (Sum Assured Reduction Cover)
- Income Benefit
- Level Cover plus Income Benefit
- Low Cover Option
- Level Cover with Survival Benefit
- Return of Premium (ROP)
- You will get a death benefit based on the Option Plan you choose.
- Maturity Benefit
- Terminal Illness Benefit
- Enhanced Life Stage Protection: Under this provision, you can cover the arriving happy moments of your life, such as marriage and childbirth.
- Survival Benefit
This term insurance plan is open for 1 to 100 years old. If you wish to know more, then google this ‘ABSLI DigiShield Plan’.
HDFC Life Click 2 Protect Plus Term Plan
It is a non-linked, non-participating term insurance plan specifically intended to meet people’s needs at various phases of life. It has many features aimed at financially protecting the insured and their loved ones cost-effectively.
This term insurance plan comes with four different cover options, and they are as follows:
- Life Option
- Extra Life Option
- Income Option
- Income Plus Option
The features of this comprehensive term insurance plan are as follows:
- With the Life Stage Protection feature, you may raise your insurance coverage at any point in your life without having to pass a medical exam.
- It provides insurance coverage up to the age of 85.
- The minimum age for admission is 18 years old, while the maximum age is 85.
- The minimum insurance term for the Life Option and Extra Life Option is 5 years, while the minimum policy term for all other choices is 10 years.
Owning life insurance at a young earning age is very important. You might not feel the need right now, but you would understand the value of having life insurance after some time.
Still, if you cannot understand and finalise a term insurance plan, you can consult a financial or insurance adviser to have a better picture if you cannot play with your numbers nicely.