What is Term Insurance?

[ravinder]

Hi All,

I am new user to PolicyWala forum. I just wanted to know about Term Insurance -

1. What is Term Insurance?
2. Why the price of Term Insurance is less than all other Life Insurance Policies?

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[JindalGaurav]

It is the simplest form of Life Insurance. It is a without profit coverage policy. So the premium is the lowest, you don't get back anything if you survive the term you are taking the policy.

[abhinavsinghvi]

It provides low premiums and huge risk cover

Insurance is not about profits..its abt protection..here one should look at the risk cover and not the profits..

The sum assured or the risk cover should be atleast 10 times the annual income of the person. Such high amount is only available thru term insurance and not thru ULIPs, unless you are have lots of free money.
If you are looking for profits.Then MFs are the best option

But I think its essential for all to have a term policy

[Anil Patil]

Very well said !

But still lots of people get attracted to ULIPs because of the confusions created by some agents. They show the returns given by ULIPS but hide the high expenses incurred.

The message is quite clear though:
Don't mix insurance with investment.

[Abhishek]

Hi All,

I am new user to PolicyWala forum. I just wanted to know about Term Insurance -

1. What is Term Insurance?
2. Why the price of Term Insurance is less than all other Life Insurance Policies?

My Two Cents -
We need to concentrate on two form of risk!...
one is dying too early which can be covered by term insurance (min 10 times of annual income)and
the second one is living too long and not earning and depending on others for money which can be covered by pension plan (invest regularly so that u get some income in form of pension, here we need to know how much we want when we retire and work on our Investments)...even in a pension plan go for single premium where the charges are only 6% if u go for the regular premium u need to lose nearly 50% in the 1st 2 years as charges!

[Expert]

Advantages of Term Life Insurance.
Term Insurance is the cheapest form of insurance.
Provides a safety net for your family.
Tax saving instrument.
It pays a death benefit to the beneficiary you name.
It will cover your final expenses and provide a lump sum for your dependents.
It covers you for the full amount of life insurance you choose.
It gradually increases annual premium as you get older. (Some Policies)
It traditionally works well to meet temporary insurance needs.

Disadvantages of Term Life Insurance.
No returns.
Nothing is paid if u outlive the term.
Only cover for a term.

[PolicyWala]

Term insurance is a basic type of insurance coverage that you can buy, for a specified period of time. Term insurance is strictly insurance, and has no cash value. It also offers the lowest premiums.

[tigershark]

TERM plan is the purest insurance plan,You wouldn't get any return in the end.The premium is for your insurance.If you are 25 and you are insuring yourself for 20,00,000,term plan premium comes out to be around 7000 per year.