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A 10-year term life insurance provides affordable coverage, securing financial stability for your loved ones during the termed period.
What if you could have a safety net that not only protects your family and you but also adapts to your unique needs? A 10-year term life insurance policy offers just that—affordable, reliable coverage during the most crucial phases of life. With options to add critical illness and accidental death coverage, you can customize your policy to ensure your loved ones are protected. Are you ready to take control of your family’s financial security? Let us understand all about the 10-years term life insurance.
You may be wondering: what is term insurance? The term insurance is a policy that protects you against financial emergencies. A term insurance plan assures you and your loved ones pure financial security.
A 10 year term insurance plan in particular, benefits you for ten years. To be eligible for these benefits, the life assured must pay the policy premiums up to a 10-year policy period. however, a ten-year insurance plan does not offer any maturity benefit under the base plan. You can still choose add-on riders to get enhanced benefits. These add-ons can be accident, disability, or critical illness benefits. Such add-ons lead to better coverage in the same plan.
These plans work seamlessly without much hassle. It is easy to understand how they work; let’s take a quick look:
There are various benefits to purchasing a 10 year term life policy. Some of the benefits are mentioned below:
Most insurers provide long-term policies that require premium payments for 25-30 years, depending on the policy tenure. If you are the type of person who cannot commit to paying premiums over time, 10 year life insurance coverage is the best option to start.
If you die within the 10 year term insurance period, the benefits will be paid to the person you have designated as a beneficiary. You will be able to choose whether to receive in a lump sum or instalments. Depending on your family’s needs, you may select either option.
You can claim a tax deduction under Section 80C of the Income Tax Act of 1961, just as you can do for other insurance plans. This allows you to earn tax benefits on the premium paid for a 10-year term insurance policy.
If you realize mid-tenure that you cannot complete the entire tenure of 10 years, you can surrender the policy before the end of term and avail of the benefits. You shall be entitled to such benefits only if you have submitted the total premium amount of at least 2-3 years.
These plans allow riders add-ons to ensure additional protection for your families against death, disability, and critical illness. Such riders enhance your plan coverage and make it a better fit.
A few insurers offer short-term life insurance policies with the loan facility. This loan facility is provided to help during several urgent liquidity needs against the sum assured. Such a loan facility can help you with other emergencies as well.
Several factors are taken into account while calculating the premium of the term life insurance plan. Here below are some of the crucial factors in calculating premiums for ten-year term plans:
The insurance uses age to compute the premium. If your age is young, the premium will be lower because you are at a lower risk. On the other hand, if your age is older, you will be required to pay a higher premium due to the increased risk connected with this.
While income does not directly affect the premium, it can influence the sum assured you choose. Individuals with higher salaries may choose the higher sum assured, which results in higher premium rates and vis versa.
This is the main factor that impacts the premium amount most. If the sum assured increases, then the premium amount increases automatically. When this sum assured decreases, the premium amount also decreases.
It is very important to consider every insurer’s medical history when deciding the amount of premium to be paid periodically. Those who have a clean medical history enjoy less premium, while individuals with any health issues suffer from a higher premium amount.
While this policy offers affordable coverage and has a lot of positive things to count for it. However, there is a certain level of risk associated with it. You need to keep in mind these points while making your decision.
1
These plans are appropriate for those seeking financial security for their family in their absence. This can be especially beneficial for people who have short-term goals to achieve over the next ten years. If they die during the insurance policy’s term, their beneficiaries can utilize the benefits to cover their future expenses. Furthermore, those who are accountable for any form of loan may opt to get this plan.
2
Many advantages come with this 10 year term life insurance policy, such as flexibility, affordable rates, and straightforward coverage. These benefits make it a tempting substitute for people looking for short-term financial stability at a pivotal point in their lives.
3
While calculating the premium for a 10 year term life policy, the insurer considers several factors, such as the policyholder’s age, income, medical history, and sum assured. The premium amount is then decided.
4
When your term insurance policy comes to an end, you can definitely ask to have your coverage renewed. In this case, the insurance will be extended, but there will be an increase in the premium rate decided by the insurer. It’s because your chances of developing health problems will increase with your age. You might have to pay far greater premiums as a result than you did previously.
5
A plan with term insurance offers coverage for a predetermined amount of time. Once the time restriction has passed, you will no longer be covered. Similarly, you will not be compensated if you live longer than the term life insurance policy, which is 10 years.
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Amit Raje is an experienced marketer who has worked in various Fintechs and leading Financial companies in India. With focused experience in Digital, Amit has pioneered multiple digital commerce in India. Now, close to two decades later, he is the vice president and head of the D2C business department. He masters the skill of strategic management, also being certified in it from IIMA. He has challenged his challenges and contributed his efforts in this journey of digital transformation.
Prasad Pimple has a decade-long experience in the Life insurance sector and as EVP, Kotak Life heads Digital Business. He is responsible for developing user friendly product journeys, creating consumer awareness and helping consumers in identifying need for life insurance solutions. He has 20+ years of experience in creating and building business verticals across Insurance, Telecom and Banking sectors
The information herein is meant only for general reading purposes and the views being expressed only constitute opinions and therefore cannot be considered as guidelines, recommendations or as a professional guide for the readers. The content has been prepared on the basis of publicly available information, internally developed data and other sources believed to be reliable. Recipients of this information are advised to rely on their own analysis, interpretations & investigations. Readers are also advised to seek independent professional advice in order to arrive at an informed investment decision. Further customer is the advised to go through the sales brochure before conducting any sale. Above illustrations are only for understanding, it is not directly or indirectly related to the performance of any product or plans of Kotak Life.
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