A term life insurance plan is an individual life insurance policy that provides a lump-sum amount to the policyholder’s family in the event of the death of the sum insured during the policy period. A pure term plan promises substantial life insurance cover at very affordable premium rates.
Financial experts have always hailed the term insurance as the first step towards proper and robust financial planning. An intelligent individual would always go for a term insurance plan first and then think of investing in other avenues so that a corpus is built to meet future goals. The term insurance plan is considered an essential financial tool for every household. It helps the family members maintain the same standard of living as they had done when the insured was around.
It gives the policyholder peace of mind as this policy ensures that the family will have financial support even when he is not there. But before you jump to buy a term life insurance, here are a few facts which you should be aware of –
Term Life Insurance is more like a contract
The term life insurance is said to be a contract between you and an insurance company. It is stated that the insurance company will pay your nominee a set amount in the event of your unfortunate death, as long as you are regular with the payment of premiums.
One may have multiple life policies; you may have purchased one on your own while the other has been offered at work. However, the employer’s life insurance policy will only be twice your annual salary, which is usually not enough for a family.
And there is also the danger of the coverage getting stopped if you leave the company anytime. Getting additional life coverage is smart to ensure that your family is financially sound, even in your absence.
It is only for a limited period
The insurance policy is known as term insurance mainly because it gives protection for only a set period such as 10 years, 20 years, etc. If you die during this period, then the beneficiaries will receive the death benefit. The downside is that if you outlive the period, the insurance policy will cease to exist.
To find out the exact term length that you need, you must review certain factors such as assets, debts, future expenses, and the dependents’ financial needs. The single most advantage of term life is that it is much more affordable than permanent life as it lasts for the entire life. The premium of term life is usually based on certain factors like age and the insured’s life expectancy.
It can be used as a planning tool
A term life insurance is a confidence booster because if you die during the policy period, your family will be able to handle all expenses such as living costs, mortgage, and college fees. The policy can also be used as a planning tool to cover administrative fees, taxes, and legal costs.
Family members always prefer a life insurance pay-out, and this is where term insurance plans win over other policies.
How to get term insurance quotes without giving personal information
If you have ever shopped around for term insurance quotes, you must have realized that you are giving far too much information to get a quote. Many companies out there collect more information than they require providing you with a simple quote. Experts say that for a quote, an insurance company would only need the following details –
Date of Birth
Length of Coverage and
Whether you are a smoker or not
There are many websites where you get quotes without divulging a lot of personal information. The only details you give are personalized in nature, no doubt, but they are anonymous. It will only take a couple of minutes to enter your data, and you will be shown a quote almost instantaneously.
The best part about these online queries is that you can alter the age and find out the quotes if you plan to buy a year or two later. However, if you like a quote and are thinking of applying for the actual policy, you must fill in all the fields to continue to purchase the term insurance policy.
The insurance policies will not alter much depending on sex, but they do factor in age, location, and tobacco use in the policy’s cost. It must be kept in mind that the older individuals’ premiums cost three times more than what a young person might have to pay.
Nowadays, many companies allow you the option to directly call up the insurance company and get the quotes without divulging too much unnecessary information. In many insurance aggregator websites, you will get a tab – phone this company, which allows you to directly call up the said insurance company. It is a wonderful feature that allows the customer and the company to connect directly.
People who are tobacco users are likely to have more severe ailments than those who are non-smokers. So this habit is also a great determining factor for the policy’s price. Every company has a right to know these basic details to give you accurate information about the premiums. They cannot ask for your emails and phone numbers as these will hardly have a bearing on the final price of a policy.
Gone are those days when an individual has to type in many personal details like email, phone numbers, and even addresses to get the policy quotes! These were old and forceful marketing practices that are no longer feasible in the present scenario.
Several companies have understood the population’s pulse and are now allowing people to get quotes of term life insurance and policies without putting in too many personal details. This policy change is a real boon for the consumers as they were always reluctant to give out unnecessary info, and it will also help the companies to win back the trust of the people in the insurance business.