Introduction to Term-policies
Life is full of unexpected things and unexpected events we cannot expect what may happen and what may not happen. The main duty of the head of the family is to fulfill the needs of every member of the family. Even though the head of the family have not earning anything, it is his/her duty to fulfill the needs of all dependents. For this, many paths are available but for to considering financial safety Term-polices are best to save. However, people get confused with two questions regarding Term-policies. First question is regarding the policy, which has to taken, and for how much amount and the second question is regarding which policy is necessary for me. Taking Term-policies related with expenditure but safety of the family is most important. Though in the absence of the family head, Term policies supplies family members happy and comfortable life even in the absence of the family head. However, majority of the people lacks the proper knowledge about Term Policies.
What are Term-policies?
Until yesterday, we with the introduction of name of Insurance, only remembered endowment and ULIP policies. However, presently Term-policies are occupying their places. Insurance companies are concentrating more on these policies due to the changing lifestyles and thoughts of public. The policies, which offer only life insurance risk-cover facility without offering any income profit facility, known as Term-policies. In other words, these are like vehicle insurance. There will be no maturities in Term Policies we can only find claims. While taking these Term Policies below given 8 important principles have to be followed.
How much Insurance is needful?
It is not possible to estimate the exact value of the human being's life, But Insurance companies takes on point into consideration this regard. One person has to take an insurance safety of value equal to adding 12 rates of his/her income per annul and subtracting the values of investments from that value. If the person has debts accordingly, the value has to be increased. Apart from this life style, present and future needs are also important considerations for the person. If the person is married, wife, kids, present and future economical necessities also have to consider. If unexpectedly, the head of the family leaves them he have to take care about his debts and credit card bills have not bother the remaining family members.
How much time-period is essential?
The insurance cover is necessary until the earning time of the person. Therefore, whenever a question arises how much time Insurance is needed the answer will come as until the age of retirement. So Insurance policy has to be taken for the time by subtracting the present age from the retirement age. For example if a person's retirement age is 60 and the present age is 35 so Term Policy has to be taken for 25(60-35) years.
How are the claims?
While taking Term-polices every individual have to compulsory observe the claim records of the company. Some companies issues policies but at the time of claim, they create problems policy-holders. Therefore, before taking the policy itself one has to check the claim records of the company. While paying claims companies have to follow the regulations Regulatory authority.
If necessary use Riding
At present Insurance-companies are providing extra insurance cover by the payment of some extra premium. Providing extra benefits for the main policy is the main aim of these riders. These riders are available in less cost comparing to a new policy, which provides extra benefits along with main policy. So necessary riders have to chosen by the individual.
Discounts have to consider
Insurance companies are offering discounts in Term-policies. These discounts are total depends on every individual's life style and eating habits. For example, some companies are offering non-smokers with discounts in premium so as some companies are offering discounts for women.
Complete and correct details have to provide
Providing complete and correct details is the important point that has to follow by the policy takers. By doing, this avoids the problems from the side of Insurance companies at the time of claiming. Most of the companies are trying to guide policyholders for to reduce the claims rejection. So every individual have to be prompt and careful while providing the complete information regarding them at the time of policy-taking.
Saying Yes for Medical-tests
Even though provided with complete information if Insurance companies ask for medical-tests the individual have not worried at all. It will give benefits for both. For avoiding to face problems by family members in future due to the rejection of claim the individual have to pay more premium if obesity has proves in medical tests.
Recession is also Important
While calculating insurance recession, means increasing prices are also considerable. Due to recession, the value of rupee will be decreases in future. For example if we have buy any product with the worth of 10 lakhs. As estimating yearly recession rate as 8 percent, we have to pay rupees 45 lakhs for to buy the same product in 2032. Therefore, for to fix this problem of recession the individual have to increase the insurance risks cover 5-10 percent for every 5 years.