Term Life Insurance Blogs

Helping you to make informed decisions about insurance
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How much term insurance cover do I need?
published on December 16, 2022

People looking for term life insurance coverage frequently ask us, “How much term life cover do I need? ” The amount of life insurance that each person needs will vary depending on a variety of circumstances. In this post, we will discuss the factors that will influence how much life insurance you need.

3 Important Factors to Consider

Before choosing any life insurance plan, consider the following three most crucial factors to take into account while deciding how much term life cover is required:

  • Does it cover your financial liabilities and loans?

Even if something unfortunate were to happen to you, unpaid debts like your home loan or car loan would still need to be repaid. In addition, you can have further unpaid debts. Make a list of all these liabilities and do the math to determine your total amount owed that must be paid regardless of what.

  • Does it include both primary and secondary education for your kids?

If you are the sole breadwinner for the family, you are responsible for your child’s financial stability. Your child shouldn’t be denied the education s/he needs in the event of your unfortunate demise. Hence, determine a likely cost based on the program and institution you want to register your child in.

For example, A 4-year engineering program, which costs around 5 to 8 lakhs today, by 2025, it would likely cost at least 15–16 lakhs. Further, it is likely to reach 20 lakhs by 2030 and 35 lakhs by 2040. Hence, keep the inflation rate in mind while calculating the cost.

  • Does it cover replace your current income?

Your family’s monthly expenses, such as those for groceries, transportation, medical care, and housekeeping, are also covered by your current salary.

These expenses could change if an unexpected incident occurs or if you retire. Say the monthly expenses for your household are ₹ 45,000 at the moment. Due to rising prices and an improvement in the level of living, this may rise in the future. Hence, decide how much you might need to spend annually to cover the family’s essential costs.

Calculate the Coverage You Require

After you’ve finished, add up all these numbers to get an idea of the total life cover you require. Your term plan’s sum assured must cover the expenses. If it is, you can relax knowing you have enough protection. It is that simple!

The Final Step

Now analyze and compare every term life insurance plan offered on Elephant.in and buy the one that seems most reasonable. Do not forget the premium cost that you will have to pay each month or annually while making this decision.

 

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How Insurance needs change at every stage of life!
published on February 14, 2022

Life Insurance is a type of contract between an insurer and the insurance company, where a company pays a specific sum to the insurer after a fixed term or to the insurer’s family after the death of an insured person. It secures the future of your dependents.

There are various stages of life. When you are young (unmarried), you don’t feel the requirement of life insurance. Even if you take, you go for Term insurance to secure your future. At that point in time, you just think about your parents and you have the least responsibilities. Term insurance with return of premium acts as a financial safety net. As you grow old, you get married. Your responsibilities increase. You need to increase your life insurance with new dependents. The increased amount will help your spouse to make ends meet. After that comes mid-life with your children. To ensure that a mid-life crisis doesn’t come in the way of your monetary plans, you need to get savings insurance that defends your investment and health. There are a lot of savings plans accessible on the market, like investing in ULIP (Unit Linked Insurance Plan) is the best plan to save for the long term.

Many types of Life insurance policies are available: 

  • Term Life Insurance: This insurance plan provides benefit to the family of the insured if the insured person dies during the specified period. If the insured person survives till the end of the term, insurance coverage ceases and cannot be claimed.
  • Term Insurance with Return of Premium: This plan is one of the best insurance plans because it gives maturity benefits. This type of insurance gives a premium back after the policy gets matured.
  • Whole Life Insurance: This insurance plan provides coverage throughout your life up to 100 years. In case of death of the policyholder, the death benefit is given to the beneficiary. Some plans offer to pay a premium for life insurance for 10-15 years only and get benefits for the whole life.
  • Endowment Policy: This policy helps you save money regularly over a period of time. It is a perfect combination of savings and protection. It is payable to the insured if he/she is alive on the policy’s maturity or to the beneficiary with the guaranteed bonus.
  • Unit Linked Insurance Plan (ULIP): ULIP is the best type of insurance policy that gives life cover as well as investment opportunities. It is a long-term investment plan having a lock-in period of five years. The premium that is paid by the insured is used for investment in assets i.e. to purchase units chosen by the policyholder.
  • Moneyback Policy: This policy pays back regularly during the policy tenure. The percentage of the sum assured is given back at regular intervals. The remaining amount is given with a bonus when the policy matures. In case of the death of the insurer, the insurance company gives the entire amount irrespective of the number of instalments paid.
  • Child Insurance Plans: This plan is an investment cum insurance plan to benefit your child’s future needs like education. You can start investing right from the time the child is born.

So, insurance needs to keep on changing with the changing phases of life. 

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Alliance Insurance Brokers Pvt. Ltd.
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CIN: U67200MH2003PTC141621
IRDAI Registration No.: 217
Valid from : 13/10/2021 to 12/10/2024
Category : Composite Broker
Principal Officer Name: Mr. S. V. Thakkar
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