Home loans EMIs pinching your pockets! Here is some good news.
Rajveer and I were inseparable. When I had to move to Delhi for my masters, we promised to keep in touch. States changed, and as time passed, we slowly grew apart. While we knew what was happening in each other’s life through social media updates and the occasional wishes on festivals, we did make it a point to catch up whenever we were in the same city.
I married Preeti last year and we are now embracing the new responsibilities of life. Preeti and I bought a home last year on a home loan. I caught up with Rajveer, who was also married now, and got to know that he too had purchased a home on loan recently! So, here I was sitting in his newly purchased apartment in an upscale Mumbai suburb.
We laughed and caught up on how things had changed from gully cricket to excel sheets. As the chat shifted to something more serious, the huge EMIs we both were paying was the hot topic. Life had changed for both of us since the home loan. EMI was a major part of our lives and was here to stay at least for the next 15 years.
As I was working in insurance industry, I happened to ask him if he had a term insurance plan since he had such a huge home loan. I was shocked when he said he didn’t buy one. As an insurance employee, I was able to guide him on the value of having a term plan and how it was a safety net. The pay-out would take care of future EMIs in case he was not around and secure the home for his family.
Rajveer mentioned that the extra burden of a costly term plan was something he could not afford along with the huge EMIs. Here’s what I told him on ways to lower and managing a term plan within his budget:
Firstly I told him to opt for yearly premium payment mode instead of monthly. As, the greater the frequency of premium payment, higher the premiums.
Secondly, Rajveer was a non-smoker. So, at his age, instead of paying Rs. 8,375 per year**, he would have to pay just Rs. 5225* per year. This means, he would save almost Rs. 3100+ per year!
Thirdly, I told him that premiums increase with age. And since he had just turned thirty, he should buy the term plan now itself. A life cover of Rs. 50 lakh would cost him just Rs. 14.50 per day*! A delay of even five years would mean paying an additional amount of approximately Rs. 2,039 per year***!
Lastly I told him, that now a days a term plan is not just a vanilla offering of a life cover. New age term plans also offer interesting features like:
- Critical illness^ cover – payment upfront for critical illnesses like cancer, heart attack and other illnesses.
- Payout of sum assured in case of an unfortunate event because of an accident#
- Tax benefits under section 80C & section 80D which can save tax up to Rs. 54,075/-~
- Also now term plans can be bought online or through offline channels like an advisor or a bank.
Rajveer was finally convinced that term plans were indeed affordable and he would definitely buy one soon! After all he didn’t want the burden of the home loan to fall on his family if he was not around.
Before I left his home, Rajveer promised me that he would buy a term plan in the coming week itself. He kept his promise and called me back to confirm that he had bought a term plan! He also told me that it was the best decision he had taken to secure his family’s future.
You too can take advantage of low premiums today & truly secure your family from the burden of the home loan. Secure your family today – Get your quote !
Check Also : Term Insurance Plan Premium Calculator
*The above mentioned premium rates is for a 30 year old healthy non-smoker male for a term of 30 years with ICICI Pru iProtect Smart(Life option with a lump sum death benefit payout option and is exclusive of taxes). Annual premium for Rs.50 lakhs life cover is Rs.5225 and monthly premium for Rs.50 lakhs life cover is Rs.435( under life option with a lump sum death benefit payout option and is exclusive of taxes.**Rs. 8,375 per year – rate p.a. for a smoker for the same age group
***The above mentioned premium rates is for a 35 year old healthy non-smoker male for a term of 30 years with ICICI Pru iProtect Smart(Life option with a lump sum death benefit payout option and is exclusive of taxes). Annual premium for Rs.50 lakhs life cover is Rs.7264 and monthly premium for Rs.50 lakhs life cover is Rs.605( under life option with a lump sum death benefit payout option and is exclusive of taxes.
^The critical illness benefit offers coverage against 34 critical illnesses and is payable on the first diagnosis of any of the covered critical illness. The critical illness benefit is an accelerated benefit and the death benefit will be reduced by the critical illness cover paid to the policyholder. This is available only under Life & Health and All in One Options. To know more about the illnesses covered, please refer to the Sales brochure
~ Tax benefit of Rs.54,075 is calculated at highest tax slab rate of 30.9% (including Cess) on insurance premium of Rs. 1,50,000 u/s 80C/80CCC and health premium of Rs. 25,000 u/s 80D of the Income Tax Act, 1961. Tax benefits under the policy are subject to conditions under Sec. 80C, 80D and Sec 10(10D) of the Income Tax Act, 1961. Service tax and applicable cesses will be charged extra as per applicable rates. Tax laws are subject to amendments from time to time.
#Subject to maximum of Rs. 2 crores and available only under Life Plus and All in One Options.