Savings Insurance vs Term Insurance

1. Savings Insurance vs Term Insurance Savings Insurance vs Term Insurance — Which one is best for you? Choosing and investing in the right life insurance might not always be easy. Two of the popular term insurance plans are — savings insurance and term plan. But which one is right for you? Read on to understand better. First, understand your financial objectives It is important to firm up on your objective before you buy a life insurance plan. Your objectives can range from providing adequate protection to your family in your absence, saving money for your child’s future education, buying a vehicle or saving for your marriage. Once you are clear on the objective, it becomes easy to find an insurance product to suit your need. Savings Insurance Plans — Is this plan right for you? Savings insurance plans are designed to put you in a habit of saving money regularly which in turn gives you guaranteed returns after a specified period. Not only this, you

2. also receive the benefit of a life cover which comes bundled in the plan making it a two- in-one benefit plan. Payout: When you are alive, you can fulfill your life goals with the guaranteed amount that you will receive upon maturity (pre-defined tenure). However, in case something unfortunate was to happen to you, your family will receive guaranteed death benefit which can be equivalent to 11X of your annualized premiums Maturity: The savings plan’s maturity tenure usually ranges between 5 and 20 years. Someone with a medium or long-term savings goal may purchase the savings plan & use it to fund milestones such as a home renovation, a child’s marriage, education, etc. What do you need to know about Term Insurance Plans? Now that you have learned about the savings insurance plan, lets learn about the term insurance plan. If you are breadwinner of the house, it is important you get a term insurance plan. This plan works on a simple fundamental ‘Low premium, High cover)’, which also works to your advantage as a term plan is easily affordable. Term plans are valid for a specific period and covers you during your earing years. In case of your unfortunate demise, your family will receive high payout and remains financially protected. Payout: The prime objective of the plan is to offer complete financial protection to your family in case of your demise. The life cover or payouts are much higher than other types of insurance plans because they serve as income replacement upon the policyholder’s death. Maturity and Tenure:

3. Yes, the term policy provides life cover throughout the earning years, however, it is recommended to buy this policy at an early age so that you may lock premiums at lower rates. Please note that usually term insurance plan does not offer any maturity benefits. The Death benefit can be claimed by the policyholder’s nominee after their death. A few plans also have the option where the policy holders get the premiums back after a particular age. For example, if you buy the Aegon Life iTerm Prime before you turn 40 years of age, you have the option to get back all your premium at age 55 years provided you have opted for cover till age 70 years. Adding Riders: By paying just a nominal amount, you can add riders that will give you additional protection to your term plan. What this does is, it gives you additional life cover in case something were to happen to you due to accidental death or critical illness. Save tax with life insurance plan: You can also avail tax benefits with both the plans i.e Term insurance as well as Saving insurance plan under section 80C and 10(10D).We do recommend consulting a tax advisor for more details on prevailing tax laws. Takeway With so many unforeseen events happening around the world, the time is just right to opt for an insurance plan if you have not already. We hope the above article helps you making the right decision in choosing which life insurance plan is best for you.