What Should You Consider Before Buying LIC Term Plan

Most of us simply shy away from insurance plans due to their complex structures and hefty premiums. While that might not be entirely true but for sure a few insurance plans have a lot of nitty gritty stuff which can be a bit overwhelming for a normal person. However, this should not be an excuse for not insuring your life.

For sure, we have improved living standards and quality of life in the fast few years but that doesn’t necessarily take away the unexpected quotient from life. What if something were to happen to a person? How would the life of their loved ones go ahead in their absence? There are a lot of such questions that can be a bit difficult to answer. Well not anymore.

An LIC Term Plan is an ideal and inch-perfect answer for all of the above problems. Since it is an LIC product, you get a heritage of quality products, exceptional value for money and a strong settlement department. On the other hand, a term plan is as simple as an insurance plan can get. You pay a certain premium to an insurer and in return the offer life cover for you.

That’s it. There aren’t any complex calculations or bonuses or surrender to confuse you. To buy an LIC term plan, you simply need to pay a certain premium. In turn, LIC offers substantial life cover. Should anything happen to a policyholder, the sum insured will offer great financial stability to the family of the policy holder.

Here are some of the things that you must consider before buying a LIC term plan.

  • Earlier the Better

The risk associated with a person increases with their age, as simple as it is. Thus, the earlier you buy a term insurance policy, the better it is. It offers you high cover from an early age but at the same time, you have to pay considerably lower premiums.

  • Avoid Single Premiums

While you can buy an LIC term plan by paying a single premium, it is not recommended. Opting for a yearly premium will be easier on your pocket and at the same time better from a long-term point of view.

  • Riders

While life insurers have a lot of riders that you can choose from, do so only if it is really needed. A lot of times, insurance agents make you buy riders that might not be of much significance to you. Thus, assess a rider and add only if it makes sense.

Essentials of LIC Term Plan

While term insurance plans have been around for quite some time, they have gained a lot of traction in the last few years. Whether you attribute it to the aggressive pitching of the product or openness of buyers, we leave it up to you. But there are a few core parameters which make a term insurance plan a very strong buy. In fact, a lot of financial advisors would recommend adding a term plan to your portfolio.

  • Simplicity

Unlike several other insurance plans, an LIC term plan does not have a lot of complexity involved. As described above, you pay a certain premium and receive a certain life cover in return.

 

  • Affordability

The kind of life cover that an LIC term plan offers, one cannot fathom such covers with any other insurance plans. Normal endowment or annuity plans would cost you hefty premiums to get a life cover anywhere close to what a term policy offers.

  • Flexibility

A buyer has the option of customizing and changing the policy as per their needs during the buying phase. If you are someone who needs the policy for a duration of 10 years, you can go ahead and buy the same. The plan is also available for someone looking from a more long-term perspective. The same goes for the sum assured and riders as well. It is even easier to get in and out of an LIC term plan.

Things to Know Before Buying LIC Term Plan

Before you make up your mind to buy an LIC term plan, here are a couple of things that you must be aware of.

  • Cover

A term plan comes into effect only if the policy holder loses his/her life. Should they live past that term, there are no financial benefits that you can expect from the policy.

  • Sum Assured

It is very important to judge and assess the right sum assured needed for your future. A lower sum assured plan will not help you much during the claims.

An LIC term plan is a must if you are looking for a smart way to secure the financials of your loved ones during your absence.