Term insurance is a risk management tool. Before we address risk management tool in detail, let me give you an example of risk management. After understanding risk management, I will further explain what term insurance is, and then ‘what’ and ‘why’ of purchasing a term insurance is.

There are specific situations where a person needs Term Insurance, and these specific situations depend on 2 conditions; 1. Financial dependency 2. Total assets a person owns. Let’s see how these 2 factors work in synchronization. What is dependency – if a person is dependent on you for anything, it is called dependency.

Every human being has an unlimited earning potential. You may be starting your job with a monthly salary of 25,000 per month but 10 years down the lane, you may be earning 2.50 Lakhs per month or it may be 25 Lakhs per month. Ideally, there is no way to calculate Human Life Value but still, it needs to drill down to a certain number

The basic difference between income and expense replacement methods is whether you take monthly income or monthly expenses for your term insurance cover requirement needs. In the case of monthly income, you take the difference between your retirement age and your current age while in the case of monthly expenses you take the life expectancy of the younger spouse.

If you are looking for a one-word answer for an ideal age till when coverage will be needed, the answer would be – 60 years. Then, why are people still keen on purchasing term insurance coverage beyond the age of 60? There are 2 reasons behind this and the reasons are more psychological than financial.

Understand this- if an insurance company has received 50,000 insurance claims and their claim settlement ratio is 99% i.e. 49,500 claims are settled. There would still be 500 claims which would go unsettled and your claim can be one of them which can go unsettled.

I assume the majority of you shop online on Flipkart or Amazon. What happens if you buy a phone from one of these e-commerce sites? It displays a number of additional alternatives for add-ons, such as a phone’s back cover, earphones, a screen protector, etc. A similar scenario occurs when you try to buy a term insurance policy;

Recently, my investment advisor recommended that I buy a term insurance cover of 2 Crores with a regular premium payment option spanning 25 years. I am currently 35 years old and need insurance coverage until I reach the age of 60. While exploring the online purchase of term insurance, I discovered different payment options