- Personal Finance»
My Family Was Saved By a Term Plan Insurance
Life is Unpredictable, Secure Your Family’s Future Today
Indian roads were at their deadliest in 2014, claiming more than 16 lives every hour on an average. Over 1.41 lakh people died in crashes, 3% more than the number of fatalities in 2013, says an article published in The Times of India in July 2015.
These statistics would have just been numbers if I hadn’t witnessed the cruelty of road accidents myself. My husband passed away in December 2015 in a road accident in Delhi. That incident did not just affect me emotionally, but I also understood the financial repercussions of the death of the breadwinner of the family. My husband was just 35 years old, building a business of his own and had very little in the name of savings. Had it not been his term plan, we would have faced a serious cash crunch. Given below is an excerpt from my conversation with a friend in which I explained to her why every individual must get life insurance and how my husband’s policy came to our aid in the time of need.
Why Choose a Term Plan?
India's insurable population is expected to touch 750 million in 2020, with life expectancy reaching 74 years. Furthermore, life insurance is projected to comprise 35% of total savings by 2019-2020 compared to 26% in 2009-2010, says a report published by the Indian Brand Equity Foundation in December 2015. Life insurance is a product that helps you safeguard your family’s future financially. There are five types of policies sold in India: term policy, ULIPs, money back, whole-life and endowment. Only a term policy is a pure product i.e. the entire premium amount goes towards funding the risk. All the remaining policies are part-investment products.
My husband bought an online term insurance worth Rs. 1 crore (level cover) in 2009, primarily because it offered the highest cover at a low cost and was free from all market related risks. He also benefitted for maintaining a healthy lifestyle. Read on to know how the policy has helped me take care of my financial needs after my husband’s death.
How The Sum Assured Helped Me
Private life insurers as a whole settled 89.40% claims in FY15 compared to 88% in FY14. Birla Sun Life Co. Ltd registered the lowest rejections of 3.02% followed by other players says an article published in Livemint in February 2016. When my husband died, he had a home loan for Rs.55 lakhs and had credit card bills due worth Rs.40,000. I filed for claims settlement a week after my husband’s death and received the sum assured of Rs.1.5 crore a week after that. I received an extra amount of Rs.50,00,000 as accidental rider benefit.
The first thing I did was to pay off the debts. I also used the money to take care of household expenses. Thanks to the smooth cash flow, I could stay in my house and was not forced to go out and earn immediately after my husband’s death. I also opened a fixed deposit of Rs.30 lakhs towards for the higher education of my son. It must be noted here that sum assured received under an insurance policy is exempt from taxation under section 10D of the Income Tax Act.
Buy A Policy Online
If you are yet to buy a policy, you can consider buying a term insurance online. Online policies tend to be cheaper than their offline counterparts. The share of term policies to total business has increased to 5-7% in 2015, primarily because of an increase in the number of policies sold online, says an article published in The Economic Times in February 2016.