What type of life insurance should I buy?

Choosing the right type of life insurance plan can be confusing, as there are dozens of different plans on the market. But, it’s one of the crucial decisions you’ll have to make for your financial security. Here are some guidelines which will assist you in narrowing down your best life insurance options.

Consider term life insurance when,

• You need life insurance for a selected period of your time. Term life insurance enables you to match the length of the term policy to the length of the necessity. For example, if you have young children and want to secure their school and college fees, if something unexpected were to happen to you, then a 20-year term life plan is ideal. By this time, your children would have grown up and become financially independent.
• You need significant life coverage, but have a limited budget. In general, term insurance pays a large death benefit if the policyholder passes away during the term of the policy. However, there are no maturity benefits aka survival benefits. Since the risk borne by the insurer is less, the premiums for term plans are lower compared to other life plans.

Consider convertible term plans when,

If you think that your financial needs may change, you can opt for “convertible” term policies. These allow you to convert your term plan to permanent insurance. However, the premiums for convertible plans are higher than that for regular term plans.  for higher premiums.

Consider term return of premium plans when, 

Unlike regular term plans, term return of premium plans offer survival benefits. The plan returns the premiums you have paid after deducting a certain percentage.

Consider whole life insurance when,

• You need life insurance for as long as you reside . A permanent policy pays a benefit whether you die tomorrow or live to be over 100.
• You want the double benefit of both life coverage and savings. Whole life plans offer death benefits if the policyholder passes away during the policy term and maturity benefits if the policyholder survives the plan.
• Keep in mind that premiums for whole life policies are higher than that of term plans. However, the premium remains constant for the entire tenure. While the term insurance premium can go up substantially whenever you renew it.

Consider these factors and choose the right plan that works for you.