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Term policy for your family security

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With growing awareness about insurance, term policies are the ones that stand by the family when something happens to the breadwinner in the family. these are pure insurance plans and their agenda is to secure the family members alone. Experts feel it is always prudent to choose a term policy that is 10 to 15 times of the yearly income. Term policy can alone provide assurance in case the family head dies, obtains permanent disability due to an accident, critical illness, etc. He can lead a peaceful life about the family if he has one term policy.

Time period of term policy:

10,15,20, 25,30 years and premium can be paid monthly, quarterly, half yearly or yearly. Choose the insurance coverage based on your needs and income.

Different term policies:

Companies provide term policies with different riders, here are some:

1. Term policy, hospital cash benefit rider.

2. Term policy, critical illness rider.

3. Term policy with monthly income.

4. Term policy that gives monthly premium.

Premium:

The insurance company will decide the premium based on your age, income and coverage that will be the same for the whole policy period. The premium can be made one time, monthly, quarterly, halfyearly or yearly. Medical tests may increase or decrease the premium amount. Smokers have to shell out more. All details should be furnished at the time of policy taking or else may face issues during claim. Term policies are available both online and offline. Online policies have a little lesser premium and medical tests are not mandatory.

Compensation to the nominee

If something happens to the policy holder, the nominee is paid the policy amount. The name of the person that the policy amount to be paid has to be given at policy taking time called nominee.

Occasions not covered under insurance:

1. In case of suicide within 12 months of taking policy. Most companies try to discourage such attempts.

2. Most policies have no coverage for terrorist activities.

3. Insurance is also not applicable for tsunami, earthquakes in some policies, so know beforehand before taking a policy.

Maturity benefits:

The main aim of term policy is to provide security, so it has to be remembered that nothing is paid in return after the policy period ends if nothing happens to the policy holder.

Service tax:

Tax should be paid on premium according tax laws.

The tax has to be borne by the customer.

Tax is not considered while calculating policy benefits.

Cooling off period:

There is facility to cancel the policy within some time if you don’t like the policy, this is called cooling off period. Know about this before taking the policy. The premium is returned after some deduction if cancelation is done before cooling off period.

Tax exemption:

The insurance amount in case something happens to the holder is not taxable.

Premium is exempted under income tax act section 88.

Policy is not covered when:

If expired within 30 days of taking policy from serious illness.

Expenses due to HIV or AIDS.

Death caused by drugs or spurious liquor.

If there are congenital diseases.

If there is no doctor certificate for the illness or death.

Treatment during delivery.

In case of treatment of cosmetic, sex change or unscientific treatments.

High blood pressure caused by pressures in business.

Loss incurred due to war or terrorism.

Suicide attempt or self infliction.

Grace period:

It is generally 15 to 30 days. if the premium is not paid before this time, the policy is canceled.

Documents needed to take policy:

Pan card xerox.

Income proof, 3-month salary slip in case of employees, 3-year income tax return for others.

Resident proof.

Passport photo.

Claim process:

Claim settlement is the most important in an insurance plan. The below are the ways to inform the insurance company for a claim.

Can go to company website and request claim.

Calling service representative of the company.

Consult company’s branch office.

Mailing to the mail ID given in the company website.

Sending messages to the number given by the company per their suggestion.

The above all just intimate the company about the claim. All the required documents should be given to the representatives of the company in their offices.

In case of death:

1. Death certificate.

2. Original policy bond.

3. Documents given by the company regarding claim and others.

Accidental disability or severe illness.

1. Medical records, doctor reports, discharge summary, records showing hospital admission lab test reports.

2. Original policy bond.

3. Documents given by the company regarding claim and others.