Once you have decided to get life insurance, the next question that comes to mind is how much of risk coverage is essential and for how much duration you need to take a cover.
The Premium of the life insurance plan would largely depend on the amount and life cover that you are seeking. There are thumb rules to determine the extent of cover that you should go for. But broadly, the principle governing the amount of risk coverage, is the amount of corpus that you think you should have in hand today, so as to suffice for all your future requirements to maintain your current living standard. This estimate should account for the Inflation rate. As a thumb rule, the amount of risk coverage would work out to 7-10 times of your annual income as of today.
Term Plan is the simplest form and the cheapest way of buying life insurance. Term life insurance plans offer pure risk coverage including tax benefits. The annual premium that you pay remains the same for the entire tenure. These premiums do not offer any return except the Risk Cover in the event of death. Term plans may vary with regard to the cost of premium and duration/term of risk coverage. Generally, term plans would offer you risk coverage upto the age of 65. Nowadays, there are plans which offer extended cover upto the age of 75, but would cost you more in terms of annual premium. Besides risk cover against death, there are additional Riders that can be purchased in a term life insurance plan. These riders provide you risk cover against unfortunate events like Accident disability/death and critical illness. But remember these riders come at an additional cost, and may cost you significantly higher than a pure term policy without any riders.
The premiums that you may have to pay for term plans vary from one insurance provider to other, hence it is always wise to compare the features of various life insurance policies online. Through online life insurance comparison websites such as easypolicy.com, you can compare life insurance premiums and policy terms offered by different insurance providers by simply specifying the type of policy you require. Insurance comparison would assure that you buy the best life insurance policy.
