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Your Guide to Term Insurance

The simplest form of assurance. It provides coverage provided for a fixed period. https://www.sbilife.co.in/en/online-insurance-plans/eshield<br>

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Your Guide to Term Insurance

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  1. Your Guide to Term Insurance

  2. Term Insurance The simplest form of assurance. It provides: • Coverage provided for a fixed period. • Guaranteed sum to beneficiaries, in case of demise of policy holder during the tenure • If the death occurs after the tenure, no benefit would be provided.  • It is purely life cover. There is no investment component.

  3. Why Should We Take Term Insurance? • Financial Protection – Provides financial cover to the family of the policy holder, in case of unexpected demise. • Low Premium – Since there is no investment component, the premiums are lower than other types of life insurance. • Simple Process – Buying term insurance is simple and quick. This is a vanilla policy, making it easy to understand.

  4. Benefits of Term Insurance • It allow short tenures, as less as 10 years.  • If you start early, the premium is much lower. • You can add riders, such as critical illness rider or accidental death cover. • Income tax benefits of up to ₹1.5 lakhs under Section 80C.  • Term insurance policies have a lower claim rejection rate. • The premiums stay fixed throughout the tenure.

  5. How to Choose the Best Term Insurance • Consider your life stage – do you have kids, number of family members.  • Consider current lifestyle to calculate the amount needed. Also, add inflation. • Consider liabilities, such as personal loans, car loans, or home loans.  • Include riders for critical illnesses you might have a family history of. 

  6. Tips to Buy Term Insurance • Look for an insurer with a high claim settlement ratio. CSR tells you how likely the insurer is to fulfill claims. • Insist on medical test, otherwise the insurer could say you lied about your health.  • Opt for a tenure that lasts until retirement. Term insurance is meant to replace your income in case of your demise.  • Do not miss renewal payments or the policy may lapse. Avoid lapses by choosing automatic online payments. 

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