The year 2020 was one that changed the entire world. A small virus that infected almost 120 million people across the world and killed over 2.7 million of them also changed our perceptions about life and the need for protecting our loved ones1. Now that India is witnessing the second wave of the pandemic, the need for life insurance cannot be stressed more2. Yet, almost 75 per cent of the Indian population — that is at least 988 million people — do not have any kind of life insurance3. Moreover, even out of those who do have a life insurance policy, most of them are underinsured4.
While financial illiteracy is one part of the problem, another major reason is the misconception that insurance is expensive. While everyone has a different set of financial goals – which can range from buying a new house, going on exotic vacations and sending kids to best schools & colleges, to building a corpus for stress-free retirement life — one thing that remains common for everyone is securing the financial future of their loved ones. A term insurance policy can go a long way to ensure that. Moreover, the good news is that term insurance plans are affordable even if you choose a large life cover enough to pay for all anticipated and unanticipated expenses of your family in your absence.
Term insurance is one of the simplest and cost-effective insurance policy that can provide the required financial security to your family. It can be dubbed as one of the preferred type of policy, especially for single breadwinners, as an untimely death can catapult one’s family into a state of uncertainty. With a term insurance policy, you can be assured that your dependents have a secure financial future through the ‘death-benefit’ pay out in case of an unfortunate event.
Since term plans are pure protection plans, they are quite affordable. There are no investment components attached to these policies and hence they do not involve any fund management charges. Moreover, in most cases, there is no maturity benefit and hence you can get a large sum assured by paying a lower premium amount.
The premium amount and your age are directly proportional to each other. Hence, you can save even more on term insurance premium by going for a policy at a younger age, say in your 20s. It is advisable to buy a policy early and reap the long-term benefits of it. In addition, buying a policy online can turn out to be a cost-effective option. For instance, with Bajaj Allianz Life Smart Protect Goal, a Non Linked, Non Participating, Pure Life Term Insurance Plan, you can take a cover of Rs 1 crore by paying only Rs 18 per day5 as premium!
Another way to make a term plan more cost-efficient in the long run is to go with a longer-term period. While this may cost you a little extra in the initial few years of the policy, you reap the benefits as you age. The reason is that if you go for a shorter term, say 10 years, you would need to buy a fresh policy after 10 years when premiums would be much higher. Instead, if you buy a policy with a term period of 30-40 years, you lock in the policy at a lower premium for the entire period and end up saving a lot over the long term.
Benefits and Features
We all know that life can be very uncertain, however, it is not only death that changes things. While term insurance is a death benefit insurance, it also comes loaded with benefits to cover for critical illnesses and permanent disabilities. The Bajaj Allianz Life Smart Protect Goal, a Non Linked, Non Participating, Pure Life Term Insurance Plan provides optional add on covers to choose from, at nominal extra cost, that covers 19 minor and 36 major critical illnesses6, including cancer, heart ailments, Alzheimer’s disease, Parkinson’s disease and blindness. Not only is it a comprehensive term plan that could be easy on your pocket, it also offers you the option of getting back the premiums paid at the time of maturity6 subject to policy terms and conditions .
You can also choose to buy Bajaj Allianz Life Smart Protect Goal, a Non Linked, Non Participating, Pure Life Term Insurance Plan – Increasing Life Cover variant and opt for an increase of 5%, 8% or 10% of the sum assured annually basis life goals and needs. This feature can come in handy, especially as your responsibilities could increase over time. In addition, the Bajaj Allianz Life Smart Protect Goal, a Non Linked, Non Participating, Pure Life Term Insurance Plan – Child Education Extra Cover variant covers education costs of your children6.
It is critical to financially secure your loved ones. So in these uncertain times, bring some certainty to your life by opting for a term-life insurance plan. This could be the very first step in your financial planning, as term insurance offers higher life coverage for the same amount of premium when compared to other forms of life insurance. In case of your untimely demise, you could be rest assured that your family would have enough money not only to make ends meet, but also to lead a comfortable standard of life.
5 Above illustration is considering Male aged 25 years | Non-Smoker | Life Cover Variant | Policy term (PT)– 30 years | Premium Payment Term (PPT) – 30 years | Sum Assured opted is Rs. 1,00,00,000 | Online Channel | Annual Premium Payment Mode | Premium shown above is exclusive of Goods & Service Tax/any other applicable tax levied, subject to changes in tax laws, and any extra premium and is for illustrative purpose only.
6 Product feature/benefit mentioned above are dependent on variant
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