Term Insurance Your Best Life Cover Bet
Imagine this scenario. You were leading a prudent financial life during 2004-07, having moderate expenses and small loan EMIs, while your stocks and equity MFs were giving rocking returns. But there was one chink in your armour — you had inadequate life cover. Then came the big plunge of 2008. If the worst were to have happened to you in December 2008, your family would surely had to make a fire-sale of your investments that you had painstakingly made.
The idea of this post came from a conversation I had with my colleague who wanted to know about term insurance plans, which company’s product to choose, which is the one I bought and why etc… etc.
When it comes to covering your life, in my personal opinion I’d recommend that you first have a pure term cover that secures you till retirement age.
While choosing a term plan, don’t only look for lowest premiums. Go for plans that also offer a longer term and cover you till maximum age.
Let’s take a look at the choices:
| Plan names | Term (yrs) | Max. age covered (yrs) |
|---|---|---|
| AEGON Religare Level Term | 10 to 30 | 75 |
| AvivaLife Shield Plus | 10 to 30 | 65 |
| AvaivaLife Shield | 5 to 40 | 65 |
| Bajaj Allianz New Risk Care | 5 to 40 | 65 |
| Bharti AXA SecureConfident | 5 to 25 | 70 |
| Birla Sun Life Insurance Term | 5 to 25 | 70 |
| Future Generali Furture Care | 5 to 25 | 65 |
| Pure Term Plan (Canara HSBC OBC Life Ins.) | 5 to 30 | 74 |
| ICICI Prudential Pure Protect | 10 to 30 | 75 |
| HDFC Standard Term Assurance | 10 to 30 | 65 |
| ING Vysya Term | 10 to 30 | 75 |
| LIC Amulya Jeevan-I | 5 to 35 | 70 |
| LIC Anmol Jeevan-I | 5 to 25 | 65 |
| Kotak Term | 5 to 30 | 70 |
| Max New York Level Term | 5 to 60 minus age | 60 |
| Met Suraksha | 5 to 60 minus age | 65 |
| Tata AIG Raksha | 5 to 25 | 60 |
| SBI Shield | 5 to 25 | 65 |
| Reliance Term | 5 to 35 | 65 |
Well, I guess then the next question is — How big a policy do you need, right?
The answer — Some say it should be 6 to 8 times your gross annual income while some say save your age. This rule of thumb is far from perfect, although it’s better than buying no coverage at all. The problem with a one-size-fits-all formula is that the policy you need really depends on your household situation.
photo credit: apdk
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Categories: insurance Tags: insurance, LIC, life insurance, term insurance, term plan
