Tuesday, December 24, 2019

Review by Indian Money Factors to Consider While Buying Term Insurance

 Review by Indian Money Factors to Consider While Buying Term Insurance

Term life insurances are pure protection plans that come with no maturity benefit. We all know the importance of a term life insurance and how it helps us to secure the lives of our dependents. It is the simplest and the most effective tool to secure your family at affordable premium rates.
Even if you have accumulated a large sum of money, a critical illness or an accident is enough to destabilize your finances. Buying a term life insurance not only shields your dependents in case of your death but also provides coverage during a critical illness or an accident and covers the loss of income.
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4 Factors to Consider While Buying Term Insurance
Factors to Consider While Purchasing a Term Plan
As you are spoilt for choices, you must consider certain important factors while selecting a suitable term plan. Here are a few important factors you must keep in mind while purchasing a term insurance plan
Sum Assured
According to Indian money Review Bangalore while purchasing the term plan the most critical step is to calculate the coverage amount. The coverage amount is the sum that your dependents will receive in the event of your death. As per the experts, the sum assured of your term insurance policy should be at least 8 to 10 times your annual income.
To calculate the amount of coverage you require, you must access factors like your age, liabilities, monthly expenses, lifestyle expense, and financial requirements of the family in future, your debts and inflation. If you have any loans, then the payout should be such that it will help your family meet their financial requirements as well as repay the debt. You can take the help of the human life calculator to understand the required coverage amount.
Policy Tenure
The main objective of purchasing a term plan is to leave your dependents a considerable sum of money. The money paid to the beneficiary is meant to replace the income of the life assured in case of his or her unfortunate demise.
It is important to buy term insurance early to gain maximum coverage. As such the age of entry is an important factor for deciding the coverage period. If you buy term insurance at 25 years then you can avail a maximum coverage of up to 65 years. But if you purchase a term plans at 45 or 55 years then the coverage period becomes comparatively lesser.
Therefore, life insurance must be availed for your entire service period. You can even opt for a longer coverage period if you intend to work beyond your retirement years. Buying term insurance at a young age is beneficial as you can enjoy longer coverage tenure at lower insurance premium. If you purchase a plan in your 50s then you will have to spend a good amount on the premiums.
Claim Settlement Ratio of the Insurance Company
The claim settlement ratio is one of the key factors buyers must consider while purchasing a term insurance plan. The claim settlement ratio refers to the percentage of claims approved by the insurer divided by the total number of claims it has received. This ratio indicates the number of claims the company has settled. It becomes an important point while deciding which insurance company should be considered while purchasing the policy.
Insurance Riders
Riders are a provision that adds benefits to the basic insurance policy. You can choose riders to modify your base insurance policy to enhance protection. There are several riders offered by the insurers that allow policyholders to make the necessary changes.
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Wednesday, December 18, 2019

Top 5 Financial Resolutions for New Year 2020 - IndianMoney Review


Are you planning for your New Year resolutions? Apart from planning for your favourite resolutions, like losing weight and travelling more, it is important to make some financial resolutions as well.
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Top 5 Financial Resolutions for New Year 2020
Setting up realistic and measurable goals for your finances is the first step towards achieving them. Here are 5-financial tips that can help you start 2020 on the right note
Save More for Bigger dreams
If you want to start your new year in the right direction then the first step you must take is to save for your bigger dreams. Savings for bigger dreams can be anything ranging from saving money for pursuing a course, international vacation, starting a retirement account or saving for a home down payment. Whatever it is, you must know exactly why you are saving for.
Once you know your dreams and how much money you need to fulfil it, you can proceed with your savings plan. If you want to hit a bigger target then divide the money you need by the time you have at hand. For example, if you need Rs. 10 Lakhs for you home-down payment then first divide the amount you need to save each year.
Next, you need a recurring deposit account to start saving the money. A recurring deposit account allows you to grow your money through compounding and gives your goal an extra boost. Since it comes with a lock-in period, you cannot spend it even if you feel tempted. Thus you can save money regularly to give your goal the required momentum.
Focus on the overall investment mix: review your asset allocation i.e. the overall mix of stocks, bonds and cash in your portfolio. Make sure your investment portfolio is in sync with your long-term goals, risk-bearing capacity and time frame.
Diversification across various asset classes:  diversification will allow you to reduce the risk factor while helping you to reach your goals. Consider other investments types like mutual funds or ETFs if they align with your goals.
Consider the amount of taxes you pay: you may shift to a tax-efficient investment if you are paying a good amount of your interest income as taxes. Some of the investment options that come with great tax benefits are retirement planning accounts, municipal bonds and ETFs.
Switch towards Automation:
One of the best financial resolutions for individuals who forget their bills on time is automating their savings or salary account. Through automation, you permit your bank account to make your monthly payments on a specified date to the insurer or a loan account. Automating your account will help you pay your credit card bills and loan EMIs on time thus saving you from negatively impacting your credit score. If you have previously missed your insurance payment then automating your account can save you from missing your payments.
Stick to the above 4 Financial Resolutions:
Once you have an investment plan in place, make sure you follow it. Revisit your plan every month and check your progress. Revising your plan will allow you to remain focused and you can achieve your goals easily over time.
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