Term life insurance


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The primary purpose of life insurance is to provide money to the family if the main breadwinner dies. In insurance terminology this is called pure protection or pure insurance. Insurance can also be purchased as an investment, for savings or for tax reduction. However, those objectives are all less important than pure protection and many of these secondary objectives can also be met by other financial products.

Since term life is the purest form of life insurance and protection, it offers buyers the highest leverage in terms of coverage to premium. This is the only product where the sum insured can be 350 times the premium paid. Do keep in mind that in term life covers, the sum insured is paid to the nominees if the policyholder dies during the policy term. No benefits are paid if the the policyholder survives the policy term.

The above presentation depicts what financial impact an untimely death can have on the survivors and how term life insurance can help manage this risk efficiently. There is always a confusion among buyers on the purpose of life insurance. All too often, it appears that people tend to buy life insurance as a tax saving device or as an investment vehicle. We would like to emphasize that the primary purpose of life insurance is protection of a value that is meaningful to the survivors. Investment is a secondary issue. Further, the tax saving benefits accrue for pure protection insurance as much as it does for investment products. The first goal in our view is to get an adequate protection cover, at the minimum possible cost.

The key benefits of Term Life Insurance are:

1. Maximum cover at low cost – A 35 year old can buy a 50 Lakh cover for a premium as little as just 15,000 a year. Any other life insurance product for the same cover would cost at least 10 times more.

2. Premiums are tax exempt under Section 80C and death benefit is always tax exempt under Section 10(10D).

3. The buyer can exit the policy anytime without any charges by discontinuing future premiums. We do not advise this as premium rates increase with age. However, discontinuation is a possibility if newer, cheaper products are introduced.

Term life sales form a small proportion of overall life insurance sales, primarily because most agents and distributors do not focus on it. The premium rates for term are the lowest and, as a result, intermediaries are often more focused on larger value products that have a large investment component. Such investment-oriented insurance is good for the intermediaries, whereas pure insurance is the best bargain for the buyer.

The video illustrates the concept and value of Term Life insurance:

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Term life insurance

  1. 1. A Happy FamilyA Future of Joy and Happiness SecureNow
  2. 2. Things can go wrongA mishap can take the bread winner away SecureNow
  3. 3. It is Catastrophic for survivors! Home Loans to pay Other loans Living expenses, children’s education till adulthood The survivors need a protection of at least 10 times your annual SecureNow income
  4. 4. You are Young. You cannot save and invest to take care of thisYou need leverage – a very high leverage SecureNow
  5. 5. Term Life Insurance Small Premiums paid in High advance Financial with meticulous Burden of an planning unexpected mishap Term Life Premiums leveragemany times its value in coverage SecureNow
  6. 6. Term Life Insurance can leverage 350 times the annual premium for a 30 year oldFor Rs 15,000 per annum he can get a life cover of Rs 50 Lakhs The leverage reduces with age SecureNow
  7. 7. Your Leverage Reduces with Age Term Life Policy of a leading Insurer. SI – Rs 50 Lakhs. Term Period – 25 Years. Leverage Defined as ratio of SI to annual premium. By the time Age Annual Leverage Premium you reach the age of 25 12,200 410 40 your leverage 30 15,450 324 reduces by a factor of 35 21,250 235 2.5 from what it was 40 30,800 162 when you were 25 SecureNow
  8. 8. Get Your Term Life Insurance Cover Now!
  9. 9. Fill in your details on our inquiry form. We will call you back!SecureNow Insurance Broker Private Limited 3rd Floor, 29 Hauz Khas Village, New Delhi 110016 Web – www.securenow.in SecureNow