Saving and investing for the future

To achieve various goals in a shorter period of time such as buying a new home, sending children to university or best savings plan and investing for retirement, financial planning is required.

Life insurance plans are financial tools to help you save over many years and invest for the future.

An endowment policy serves as a disciplined method of saving regularly.

Investment-linked plans are flexible and can be customised to potentially yield higher returns. Investment come with risks and you need to consider key factors, some of which are:

Risk profile

How much volatility and risk can you tolerate in your investment should market conditions change?  How much funds can you afford to invest and potentially lose after meeting living expenses, medical needs and financial commitments?

Investment objective

Are you investing to hedge against inflation? Are you investing to grow your capital?

Time horizon

Your best savings plan time horizon is the number of years you have to invest to achieve your financial goals.  The more time you have, the more options you have. Your time horizon would impact how much your savings can grow, what assets you can invest in and how much risks you can take.

Designing a financial plan that works for you

Financial advisers have the knowledge and expertise to recommend solutions that are appropriate for you.

Contact any one of our member companies to put you in touch with a financial adviser.

For more information on best savings plan and investing for the future, refer to the 'The Library' section.

Source: http://www.lia.org.sg/consumers/savings_and_investment

Term Plan is Best Financial Decision Before You Turn 30

One of the most common assumptions is that wisdom comes with age! Life in 20’s is considered to be rash, adventurous, exciting and full of risks. It is only in 30’s that a person is expected to settle down, become wise and take important decisions of life. However, you can have all the fun in 20’s and yet be wise by making certain substantial financial decisions, specifically buying term plan in India, which taken at an early stage can prove to be the most prudent financial stand.

Want to know how term plans can be the most significant financial investments you can make?

Following pointers will clear the picture for you:

1) Low on Premiums

Mid 20’s is the age when most people start earning. This is also the age that insurers consider to be extremely less risky from the insurance underwriting point of view. Therefore, the insurance providers offer a massive sum assured at extremely lower premiums for people who are under 30 years of age. You save on premiums, get substantial life cover with the best term insurance plan and secure your future, isn’t it an intelligent decision? Since premiums on term plans don’t change throughout the term of the plan, getting a plan at low premiums for a term of 25-30 years can be a real steal.

2) Safeguard Kids’ Future

After landing with a great job, the next step is to get married and have kids. However, what happens to kids’ education and marriage plans if something happens to you while they are quite young and growing up? The absence of financial resources can make their life tough. However, the proceeds from the death benefits of a term plan can ensure that their education and marriage expenses will be taken care of even in your absence. Compare life   insurance policies to select the best plan that meets your budget and secure your family’s future.

3) Cover Debts

This is the age of loans: home loans, car loans, personal loans, etc. You would not like to put your family in a situation where they have to deal with your loss as well as worry about paying EMIs on various loans. Buying a term plan with a clear objective of paying off the debt if something happens to you is a masterstroke to safeguard your family from unforeseen contingencies. This is what a best term insurance plan is all about!

4) Household Expenses

If you’re the only breadwinner in the family, your responsibility doubles up towards your near and dear ones. With your job, they can maintain a particular kind of lifestyle and your death shouldn’t make them alter it. The money received as part of death benefits from the term plan in India can go a long way in helping your family continue living with dignity till someone else in your family doesn’t start earning.

5) Tax Benefits

The moment you start earning, you have to plan your investments to save tax as well. The best part is that all the tax saving instruments involves some kind of saving so that you earn benefits in the long run. Insurance is no different, and you can claim tax benefits for premiums towards term plans under section 80C of the Income Tax Act.

As you can see, buying a term plan before 30 only offers you gains. All you have to do is spend a little bit of time to study about various products on offer, understand their terms and conditions; compare life insurance policies and select the best one!

Source: http://www.suggestinsurance.com/blogs/term-plan-is-best-financial-decision-before-turn-30/

All you need to know about term insurance

Large parts of the populace are waking up to the importance of having a term policy insurance plan. And this is why these plans are becoming popular. The life insurance market, too, is rising to the increasing needs and wants of the discerning customer.

All you need to know about term insurance

Large parts of the populace are waking up to the importance of having a term plan. And this is why these plans are becoming popular. The life insurance market, too, is rising to the increasing needs and wants of the discerning customer.

A term insurance plan is a pure life insurance that covers your death risk.

Large parts of the populace are waking up to the importance of having term policy. And this is why these plans are becoming popular. The life insurance market, too, is rising to the increasing needs and wants of the discerning customer. Therefore we’re seeing useful features being added to insurance plans.

With a plethora of features and benefits, these new-age insurance plans can be confusing even to the financially aware, not to mention those who are unaware of the whole concept of term plans.

So this article acts as a guide to beginners to term insurance plans. We’ll glance at the term insurance market and understand all the bells and whistles

What is a term insurance plan?

A term policy is a pure life insurance that covers your death risk. You choose the sum assured (the cover amount) and the plan term (the duration for which the plan would run). The premium is then decided based on your age, sum assured, health risks, and plan term. In case of death during the plan term, the sum assured is paid by the insurer to the insured’s nominees. Unlike other life insurance options such as endowment plans, cash back plans and ULIPs, there is no maturity benefit or investment value in a term plan. Your premium is allocated only towards mortality charges in a basic term plan.

What are the features of a term plan?

A term plan has common features which are as follows:

Tenure – term policy tenures typically range from 10 to 40 years, subject to the age of the insured. The entry age may range from 18 years to 65 years, and the maximum maturity age allowed under a term plan may go up to 80 years. For example, if you are 45 years old, some insurers may allow you a maximum coverage of 35 years after which you turn 80. You should opt for the highest possible term to enjoy coverage for the maximum possible age.

Claim Settlement Ratio: This is the ratio of claims that an insurance company honours. For example, if an insurer receives 100 claims in a year and settled 96, its CSR is 96%. While buying an insurance plan, you must look at insurers with the best possible CSR.

Sum Assured & Premium – term policy plans allow you high coverage at low premium rates compared to traditional, investment-linked life insurance plans. This is the USP of term plans. By allowing substantial coverage at affordable rates, term plans ensure accessible financial security.

Types of plans – Term plans come in five different variants which are as follows:

Level term plans – also called the basic term insurance plan, this plan pays the sum assured on death during the term.

Increasing term plans – the sum assured increases every year by a specified percentage.

Decreasing term plans – the sum assured reduces every year by a specified percentage.

Return of premium plans – term plans, except this one, do not have any maturity benefit. In return of premium plans, if you survive the tenure, the aggregate premiums you have paid would be returned on maturity.

Monthly income plans – these plans pay the death benefit partly in monthly incomes and partly in lump sum.

Riders – Riders are additional optional coverage options which can be added to your term plan for increased protection. Additional premium is payable if you add riders to your term policy. However, many term plans also have inbuilt riders. Some common riders available with most term plans, both inbuilt and optional, include the following:

Accidental death or/and Disability rider which pays an additional benefit if you suffer an accidental death or disability.

Critical illness rider which pays a lump sum benefit if you suffer from any one of the illnesses covered by the rider.

Waiver of premium rider which waives off your premiums payable if you become disabled during the plan tenure. Some plans also waive the premiums in case of critical illnesses.

Source: http://www.financialexpress.com/money/all-you-need-to-know-about-term-insurance/561832/

How one can choose the best term insurance policy

Term insurance is the most economical form of life insurance, which has gained a lot of popularity in the past decade. Due to its low premium amount and high coverage, term insurance fits into even tight budgets also. The flexibility of choosing your policy term along with various other benefits, like availability of riders, option to increase sum assure, tax benefit, etc., makes term plan one of the best life insurance policies in the market. The online availability of term plan has made the purchase and management of insurance policies very easy which has allowed the insurance sector to have better penetration in the market.

But there are more than 20 IRDAI certified insurance companies in India who offer different insurance plans with different benefits and features. That’s why choosing the best term insurance plan becomes necessary in the current era of wide range of options.

That’s why we have mentioned some of the important points in this article, which will help you choose the best term insurance policy in the market.

Compare

Comparison is very much important for choosing the best term insurance policy and with the help of the online platform, comparison of various insurance policies has become very easy. Comparison allows you to choose the most economical term insurance policy in the market which offers the maximum benefit. There are various web insurance aggregators, which can help you in getting an unbiased result for comparison. You can also compare different policies through the online web portal of insurance companies.

Buy online

Buying term insurance policy is much more beneficial than buying through an agent or broker. Online term insurance plan policies allow you to make a well-informed decision because all the information about the policy is easily available online. In addition to that, online term insurance plan policies are also cheaper than offline medium of insurance purchase because while buying through online medium, you deal directly with the company without any involvement of middleman who charge commission for each policy.

Choose your cover wisely

You should never choose your cover amount in a hurry because this is the amount which your loved ones will get in case of your demise. If you are underinsured in your policy, then at the time of claim, the death benefit will not prove to be sufficient for your family’s financial need while if you are over insured in your policy then the premium amount will become a financial burden for you. That’s why you should choose the right cover amount on the basis of your current lifestyle, family’s need, your future obligations, income, loan and debt.

Analyze the trustworthiness of the company           

A trustworthy insurance company will allow you to have an easy claim settlement process with better quality of service. That’s why analyzing different insurance companies is necessary for choosing the best term insurance plan. You can look for the Claim Settlement Ratio of different insurance companies which is issued by IRDAI on a yearly basis. You can also look at the customer review on the online portal of insurance companies or go through blog of insurance expert.

Go through the fine print of the policy

Understanding your policy well before purchasing it allows you to avoid any bad surprise or hassle in future. A term insurance plan policy come with benefits, exclusions, inclusions and with various terms and conditions, and a detailed analysis of these fine prints of the policy is very necessary for choosing the best life insurance policy; term plan. There may be a particular exclusion in the policy about which you are not aware and due to the same exclusion, your claim might get cancelled and that can prove to the worst situation for you or your family. So it’s better to be informed than regretting the ignorance in the future.

Choose the right policy term

The flexibility of choosing your policy term is one of the key features of a term insurance policy, but you should always choose the right policy term which will help you in achieving your financial goals. The ideal policy term should cover you till your retirement, but the policy term also depends upon the purpose of buying the term plan. For example, if you are buying a term insurance policy as a protection against loan, then your policy term should be equal to your loan period. So analyze your need and situation and choose the right policy term.

With so many benefits and flexibilities of term insurance plan, choosing the best one which suits your financial need has become very important. Although there is no standardized process of purchasing the best term insurance plan, but still you can keep the above mentioned tips in mind and analyze your need and situation to buy the best policy.

Source: https://www.comparepolicy.com/blogs/how-one-can-choose-the-best-term-insurance-policy/

Best Term Insurance Plans

One of the most common query from my readers is regarding Best Term Insurance India. In past i wrote an article on 5 Points to consider while buying Insurance Policy. In continuation of this post, recently i bought online term insurance plans for myself and thought of sharing my list of best term insurance plans based on my research, analysis & study. I will try to keep this post very simple and easy to understand. Before you buy term insurance plans it is important to do basic groundwork. I adopted theory of exclusion rather theory of inclusion for selection. I feel that theory of exclusion is more critical and analytical for selection.  Its like evaluation of shortlisted plans on critical parameters in order of priority  and reject the plans which does not fulfill the criterion or score low on critical parameters. This method is more scientific and widely accepted. I considered following criterion’s for shortlisting to select the best term insurance plans in same order of priority.

f:id:Jennydsouza:20170324162700j:plain

  1. Claim Settlement Ratio

My first & most critical criterion for shortlisting was Claim Settlement Ratio. I was not able to thought of any other criterion for selection of best term insurance plans. Based on the data released by IRDA, i shortlisted following 6 Term Insurance Providers with claim settlement ratio of more than 90% which is considered to be very good. Claim Settlement Ratio for each insurance provider is mentioned in the bracket.

  1. Online vs Offline Term Insurance Plans

Online term insurance plans are much cheaper compared to offline term insurance plans. Its a biggest misconception that online term insurance India lack in features and benefits. Let me assure you that features and benefits of both online and offline term insurance plans are same therefore i prefer online term insurance plan because of lower cost & convenience. As insurance provider incur low cost on online term insurance India therefore pass the benefit of low premium to customers. As all six shortlisted insurance providers offer online term insurance plans therefore there was no exclusion on 2nd parameter.

  1. Market Share of Insurance Provider

In my opinion, Market Share shows the confidence level of a customer in particular company. Same holds true for Life Insurance. India Brand Equity Foundation release Market Share of major insurance providers based on total life insurance premium collected.

  1. Premium of Term Insurance Plans

In term insurance India, the Return on Investment is NIL and it is purely a life cover therefore premium is one of the critical consideration before you buy term insurance plans. I will not quote any no’s because premium is variable and is dependent on the age & other lifestyle habits of a person. I am a non-smoker and follow healthy lifestyle habits therefore i will conclude based on premium quote received by me. Any arbitrary example may bias the readers. On this parameter i dropped LIC’s e-Term Plan and ICICI Pru iProtect Term Insurance Plan from my list as these are 2 costliest online term insurance plans.

Source: http://www.nitinbhatia.in/personal-finance/term-insurance-plans/