What is Term Insurance:

Term insurance is the simplest and cheapest form of life cover, which pays the sum assured on death. This ensures that your family receives a large lumpsum amout , in case of the unfortunate event. This can also be used to cover repayment of any debt of a policy holder by simply assigning the policy to the creditor. Upon maturity or claim on the policy, the proceeds are paid to the creditor. Loan Cover policies are a variant where the sum assured keeps reducing in line with the loan balance.

Why do I need term life insurance?

Increasing liabilities:

People today prefer to take loans to fulfilling their needs, instead of waiting to save for the future. India's outstanding credit card debt had touched Rs 26,500 crore in May 2008, up by 87% from May 2007. Hence, in your absence, your family needs to take care of this loan.

Nuclear family structure:

Earlier, people could depend on their extended joint family system to take care of their near and dear ones in case of their absence. However, the joint family system is disappearing rapidly

Increasing lifestyle diseases:

The share of lifestyle diseases in India is increasing.

How much life cover do I need?

While most of us do have some sort of life insurance cover or the other, the important question to ask ourselves is "how much life insurance cover do I need"?

Human life value,commonly known as HLV, is an easy to use numeric way of arriving at an answer to the question above. An individual's HLV is typically expressed in terms of multiple of his or her annual income.

Why should I start planning my life cover needs now?

One should have adequate cover for dependents. It's better to be prepared and ensure that the financial needs of your loved ones are taken care of, in the unfortunate event of death.

With age, the premiums tend to increase and therefore buying term insurance becomes more expensive.

Apart from the benefit of protection for your dependents, also enjoy tax benefits under Sec 80C up to Rs. 1,00,000.