Mar 8, 2009

Term Plans - Top Most Amazing Fact about Life Insurance

It is rightly said that common sense is the most uncommon thing in this world. Honestly, common sense is not so common in today’s world. Well, this post about life insurance term plans just tries to prove the above maxim as correct.

Here is a list of 10 basic questions you should answer before buying or investing in life insurance:

1.Which is the most simple form of life insurance?
A: Term plan

2. Which is the cheapest form of life insurance cover?
A: Term plan

3. Which is the most basic and purest form of life insurance?
A: Term plan

4. Which is the best form of life Insurance?
A: Term plan

5. Which life insurance plan is easiest to compare?
A: Term plan

6. Which is the most affordable form of life insurance?
A: Term plan

7. Which life Insurance plan your agent or advisor refuses to discuss or discourages you to buy?
A: Term plan

8. Which Insurance Plan is the least sold?
A: Term plan

9. Which life insurance plan is easiest to terminate?
A: Term plan

10. Which is the best gift you can ever give to your family?
A: Life Insurance term plan


Isn’t it amazing? Despite being the best form of life insurance, term policies are least sold. Even though the term plans are most effective form of life insurance, only a few people are aware of them.

Finally, which life insurance plan should you opt for? Decide yourself!

Hey! What are you waiting for? Call your insurance advisor right now and ask for the quote for the term plan. Obtain at least 4-5 quotes from different insurance companies, make a comparison and just buy the cheapest term policy. Please don’t delay. I promise that you’ll never ever regret this decision.

But before you buy it, I should tell you the only flipside to these life insurance policies is that if you happen to live beyond the end of the term, you get nothing. This fact is difficult to digest and consequently taken advantage of by the insurance agents to misguide you about the true purpose of life insurance.

But, tell me do you expect to receive the money back on the comprehensive insurance cover you buy for your car? It is similarly with the pure form of life insurance. Understand that life insurance as a form of protection is the single most important financial product you – as a bread winner – can have for your family. I hope that I’m able to drive home the message. If you still have any doubts, please write in the comment box below.

Also see:
1. Amazing Facts about Income Tax
2. Complete Guide to Section 80C Tax Planning
3. Top 10 Factors about ULIPs
4. SBI Life-SMART ULIP: Review
5. 5 Common Myths about Life Insurance
6. Understanding Life Insurance: Ask Yourself a Few Questions

20 comments:

  1. Well said. Careful research would reveal that ULIPs too have a non-refundable deduction. It's just they would call it a fees than a insurance premium.
    But trust me my agent did not misguide me. He made it very clear to go for a term insurance for safety and mutual funds for investment.
    ReplyDelete
  2. Hi,

    The info on Term insurance is very informative. Appreciate the effort.

    May I request you to post for all the viewers a article on comparison of 'Term Insurance + MF' with "ULIP's" on the pros and cons and when should go for.....
    Request to show/provide an example if possible with simple calculations.
    ReplyDelete
  3. Very informative articles, and simple straightforward and clear language. Many thanks. I was recently informed of a new ULIP scheme (Smart ULIP) from SBI which guarantees the highest NAV from the first 7 years of the term or the ending NAV, whichever is higher. The allocation charges are 15% in first year, and 5% in years 2 and 3 for a 3 year premium payment option. Considering the fact that even Mutual Funds don't guarantee the highest NAV during a specified term (meaning the investor has to time the market to some degree), this new scheme looks promising at first sight. Could you please take a look at this scheme and comment on the pros and cons as you see it?. Many thanks in advance
    ReplyDelete
  4. Dear Mr. Anonymous,

    First, I at least expect you to mention your name when you write a comment.

    Second, tell me isn’t it ASTONISHING that even after appreciating this post, you’re still asking me to clarify a ULIP plan.

    Third, always remember that money does not grow on trees. No guarantee comes without associated costs. Guaranteed ULIPs are usually more costly than non-guaranteed ULIPs and the only way to know this is by calculating their IRR. But, don’t worry, very soon I am gonna write a post about how to calculate a ULIP IRR.

    Any how, to clarify your doubts about this INNOVATIVE ULIP offering guaranteed NAV, I’ve written a separate post to review 'SBI-Life SMART ULIP'.
    ReplyDelete
  5. What about LIC policies like Jeevan Anand which provide a life cover throughout life even after maturity and lump sum payment( tax free).

    I say this because I have one and people consistently suggest me to terminate it in favour of a Term insurance, which I feel is not prudent under the circumstances !
    ReplyDelete
  6. Hi Anonymous!

    Thanks for providing me with another topic to write about. To answer your question, I’ve written another post "Understanding Life Insurance: Ask Yourself a Few Questions".

    P.S. – Terminating life insurance in the mid-way is very expensive.
    ReplyDelete
  7. been reading your posts. great posts man! Please continue the good work.
    ReplyDelete
  8. hi i have lic tripple cover do you think its good ?
    ReplyDelete
  10. Fisher,
    Did you really write the post Understanding Life Insurance: Ask Yourself a Few Questions".

    could not find it
    ReplyDelete
  11. Kirti: For your convenience, i've just added the link in this post itself.
    ReplyDelete
  12. Fisher, good work !!
    ReplyDelete
  14. Dear Fisher

    I want to purchase a life insurance term plan... is pure term plan (only death benefit) better than a term plan with return of premium (death benefit + survival benefit being return of premium paid)

    Regards

    Nirmal
    ReplyDelete
  15. I have read all the articles posted here and would like to cancel my LIC Jeevan Anand policy for which I have already premiums for 6 years. And will start a fresh Pure Term Insurance Policy.

    Can anyone please advise me what will be the procedure for Cancelling LIC Jeevan Anand Policy?

    All good suggestions are welcome !!!
    ReplyDelete
  16. Dear Fisher ,

    I am repeating question of Mr Nirmal.

    I want to purchase a life insurance term plan... is pure term plan (only death benefit) better than a term plan with return of premium (death benefit + survival benefit being return of premium paid)

    Regards,

    Dhaval Trivedi.
    ReplyDelete
  17. Astonishing! Term plan is a best type of life insurance. However, only few people know this fact. Thanks a lot for sharing this interesting topic.
    ReplyDelete
  18. dear fisher,
    U R THE ONLY BEST FINANCIAL ADVISOR.KEEP IT UP SIR.WE R WITH U.ON UR ADVICE I M TAKING TERM PLAN OF 50 LAKH.
    UR-ANURAG SHARMA,JNV-RATNAGIRI,MAHARSHTRA.
    ReplyDelete
  19. Hi Fisher

    I was trying to understand ULIPs and found your blog. I like your style of writing and is very informative.
    I am 40 Yrs and want to buy an insurance plan that gives protection to my child's education if something happens to me. I was comparing various child plans and after reading this article of Term Insurance, I got this question. Instead of buying a Child ULIP, should I consider a term insurance that has a lesser preminum and invest the remaining amount in a mutual fund myself ? I also read your article on top ULIPs. Does Govt owned instituations like SBI have less risk than private owned entities like ICICI ? TIA.
    ReplyDelete
  20. Hi Fisher,

    Thank you very much for this article. It helps a lot.
    ReplyDelete

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