Term Insurance: Affordable & Effective - Views on News from Equitymaster

Helping You Build Wealth With Honest Research
Since 1996. Try Now

  • MyStocks


Login Failure
(Please do not use this option on a public machine)
  Sign Up | Forgot Password?  

Term Insurance: Affordable & Effective

Oct 8, 2001

Death of a person brings about an emotional loss to the family. If this person is the breadwinner, the family also suffers from financial loss. This could be disastrous incase nothing has been left behind for the survivors of the deceased. Insurance helps to cover this eventuality by providing monetary benefits to the family of the policyholder in his absence. Though there are various insurance plans offered by insurance companies to cover this eventuality, the most cost effective plan is that of Term Insurance.

Term insurance is a pure risk cover insurance plan in which a sum assured is payable on death of the life assured (provided the policy is in force). However, if the policyholder survives till maturity, no benefits are payable at the end of the term. The Insurance Company may undertake to return a part of the premiums collected at the end of the term (in case of survival).

The advantage of term insurance over other plans is that the premium for this policy is negligible compared to others. Secondly, the premiums payable need not be for the whole term of the policy. Not only that, some riders in the form of value additions could also be attached to the policy. These value additions could provide the policyholder with an additional sum assured in case of critical illness or an accidental death. The policyholder can also opt for accelerated sum assured in case of critical illness in which case his policy will cease.

Because the term insurance is very cheap, it can be used to

  • Cover the human life value
  • To pay the liabilities in case of death
  • Insure elderly members of the family.
  • Critical illness cover and accidental cover.

As the premium paying period in case of term insurance is usually less than the period of the policy, the policyholder can expect to be covered 5 to 10 years after he stops paying the premium.

In case if a person wants to insure himself for a higher amount but lacks the capacity to pay the premiums thereof, term insurance is the best alternative. It is also recommended for people who have some liability in the form of say a housing loan. In the latter case, the insurance company will take care of the outstanding liability.

So if you are looking for a pure life cover, which is affordable, pays if a critical illness afflicts you and also takes care of your liabilities in case any eventuality occurs, term insurance is the product you should be opting for.

To know more about HDFC Standard Lifes Term Insurance product, please register here.

Equitymaster requests your view! Post a comment on "Term Insurance: Affordable & Effective". Click here!


More Views on News

THE NEW INDIA ASSURANCE Announces Quarterly Results (1QFY22); Net Profit Down 65.3% (Quarterly Result Update)

Aug 16, 2021 | Updated on Aug 16, 2021

For the quarter ended June 2021, THE NEW INDIA ASSURANCE has posted a net profit of Rs 983 m (down 65.3% YoY). Sales on the other hand came in at Rs 68 bn (up 12.4% YoY). Read on for a complete analysis of THE NEW INDIA ASSURANCE's quarterly results.

Steep Rise in Claims Hurt HDFC Life's June Quarter Profit (Views On News)

Jul 20, 2021

HDFC Life is anticipating claims to stay elevated in the coming quarter with the threat of a third wave.

GIC Share Price Gains After Company Swings Back to Profit (Views On News)

Jun 30, 2021

Shares of GIC surged over 3.5% after posting strong financial results.

LIC IPO: All We Know So Far (Views On News)

Aug 23, 2021

The upcoming LIC IPO is so huge that it may be split into two parts.

HDFC Life Insurance Reports 2% Rise in Net Profit for the Fourth Quarter (Views On News)

Apr 27, 2021

Key takeaways from HDFC Life Insurance Q4FY21 results.

More Views on News

Most Popular

Infosys vs TCS: Which is Better? (Views On News)

Nov 26, 2021

In the post pandemic era, the top two IT companies in India are fighting to capture the growing demand for IT.

This Multibagger Stock Zooms 20% After Dolly Khanna Buys Stake (Views On News)

Nov 24, 2021

Shares of this edible oil company zoomed over 50% in three days after ace investor bought around 1% stake.

6 Popular Stocks that Turned into Penny Stocks (Views On News)

Nov 27, 2021

A look at popular stocks that crashed big time and never recovered, i.e. which went from 'Multibaggers to Multibeggers'.

India's Top 5 Monopoly Stocks to Watch Out for (Views On News)

Nov 30, 2021

These 5 companies dominate their sectors with a huge piece of the pie.

5 Indian Companies Embracing Blockchain Technology (Views On News)

Nov 23, 2021

Blockchain adoption in India was slow in the past. Now, the technology is being well received.


Become A Smarter Investor
In Just 5 Minutes

Multibagger Stock Guide 2022
Get our special report Multibagger Stocks Guide (2022 Edition) Now!
We will never sell or rent your email id.
Please read our Terms