A gift cover that will protect your family

With growing awareness on the importance of insurance plans amongst the educated section of the society, insurance sector is increasingly gaining popularity in India. While there are 100’s of policy plans available “At Your Service” in the markets, an individual often tends to remain confused making it look like a tedious task for choosing the right one.

While peeping into the basket of insurance policies we find that the simplest policy that will give you fruitful returns is “Term Insurance Plan”. They are one of the best tools of modern day life insurance schemes which come in the form of a straightforward protection plan, that enables the insured to get adequate life insurance cover at an affordable cost.

The reason being straightforward is that term policy is a pure risk coverage plan i.e. it covers income related risks. It protects your family against financial hardships in your absence.

But term insurance cannot be perceived as an investment tool as it does not provide any maturity value to the policy holder in case he or she outlives the term period, unless he or she chooses a return of premium term plan. While shopping for term insurance plan there are few things which need to be kept in mind.

Firstly see how big is the cover? The sum assured must be large enough to cover the basic expenditure that your family will incur, financial goals such as the education and marriage of children, and other liabilities like loans to cleared in your absence. So decide an insurance cover amount which provides all these needs keeping in mind the ever inflating rates as well.

Secondly, how long is the tenure? Insurance companies usually offer term plans for tenure of around 5-20 years. Depending upon your age and needs you can adopt a suitable policy which will lasts till your required time purpose.

An insurance policy is a long-term contract and long relation with your company. Speculations are that a few insurance companies may not be around for the long term. May be companies will be taken over or the mergers will change the procedures.

Though the insurance regulator will ensure that all policies are honored by the new owners, it's best to choose a company that is doing well and is not likely to shut shop.

Online term insurance plans have become very popular in the past couple of years. Online plans are roughly 30-40% cheaper than their traditional policy methods. However, it is observed that the low premium rates on internets make people feel that there is a catch in the policy terms and claims might not be honored.

This is just not the case; low premiums are because online buyer is perceived as a low-risk customer. He or she is educated, earns reasonably well, is concerned about protection and is likely to have insurance coverage for the welfare of them and their family. These educated and sensible factors combine to lower the risk for the insurer and therefore insurance comes at affordable costs.

It’s a myth that online term insurance policies don't get good service from companies. Online customer can expect the same quality of service from the insurance company as any other customer. When a claim is processed, there is no differentiation between a policy bought online and one purchased through an agent. Besides, all insurance companies have to comply with the rules laid down by the insurance regulator IRDAI.