Term Insurance and Plans

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Term Insurance Basics
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Introduction
Term plans have emerged as a popular choice
amongst customers when it comes to life insurance
policies. This is because these plans are less
expensive to buyafter all, a term insurance plan
only charges you for the life cover. There are
no extra charges involved since the policy has no
investment component. This is why the experience
of purchasing a term plan differs from that of an
investment plan, which bundles an insurance cover
along with guaranteed payouts.
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Meaning
Term insurance is a type of life insurance policy
that provides coverage for a certain period of
time, or a specified "term" of years. If the
insured dies during the time period specified in
the policy and the policy is active - or in force
- then a death benefit will be paid. Term
insurance is initially much less expensive when
compared to permanent life insurance. Unlike
most types of permanent insurance, term insurance
has no cash value.
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Guide to Purchasing Term Insurance

• Evaluate your familys requirement and your
  financial situation before deciding on the policy
  coverage amount.
• When deciding coverage, the most recommended
  rule is to have a sum insured that is 15x to 20x
  of your yearly income.
• Before you purchase a plan, go online and compare
  different plan to decide which one offers the
  best all-round deal.
• Consider purchasing a plan which also offers
  add-on riders that you can buy to enhance the
  plans coverage.
• Most importantly, make sure your nominee knows
  that you have purchased a term plan.