Thread by @MoneyWell_

Term Insurance 101 :

"Learn everything about Term Insurance"

A Thread 🧵👇

1/ What is Term Insurance?
In term insurance, the insured person covers himself for a specific period of time. In case, something happens to him during that specific time and the plan is active, then the death benefit is passed on to his nominee.

2/ Assume, that Mr. X has insured himself for 30 years. And, if he dies in the 24th year then the death benefit will be provided to the nominee.

3/ Who should buy Term insurance?
Assume, Mr. X has a family of four which includes - his wife, a son, and retired parents. Mr. X is the sole bread earner in the family. Everything is dependent on him. What happens incase of his sudden death? How will his family survive?

4/ And so, Mr. X buys a term insurance worth 1crore. Incase of his sudden death, his family will get the death benefit or the sum insured (1crore). Atleast with this money his family will be able to survive.

5/ Hence, who must buy a Term Insurance?
♂️ A person who is the sole earner in the family.
♂️ A person who has a Debt such as home loan
♂️ A person who has no sufficient investment of corpus
♂️ Someone who has major responsibilities such as child's education, wedding, etc.

6/ When should we buy a Term Insurance?
At an early age, the premium will be less. But, as and when you grow older, the premium increases. Let say, the premium will be less if we insure ourself at the age of 25, but will be more if we insure at the age of 45.

7/ As and when we get older, we might get prone to diseases. And, there is more chance of death. Hence, due to this case, the premium for that person will be higher.
Therefore, insure yourself at an early age so that the premium remains low.

8/ Note that, whatever premium amount you have to pay that will remain same for the entire course of time. If you have insured yourself for 30 years, then the premium will remain same until 30 years.

9/ How much should be the amount of insurance cover?
There is no law which says that this should be your minimum cover. But, On an Average - the minimum cover shall be 10x your annual income. Let say, you earn 10 lakh / year. Then, your minimum insurance cover must be 1 crore.

10/ How to buy a Term Insurance?
We can buy a Term Insurance either through offline mode or online mode.
In offline mode, we'll have to approach an insurance agent and will also have to pay him commission. Whereas, on online mode we don't have to pay any commission.

11/ Thus, Online mode is preferred more as compared to offline mode.
Policybazaar is one of the online medium through which we can compare various insurance company's premium and buy the perfect one which suits us.

12/ So that was Term Insurance 101. I hope it was a helpful thread on the topic!

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