What is the positive & negetive aspect of Term insurance?

Question

Why insurance agent do not show interest towards term insurance. Why they insist on ULIP only.

Answer 1

The positive aspect is that you can insure yourself for a higher value at a very low premium. The negative aspect is that you wont get anything on maturity.

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Answer 2

I understand that your statement is in the Indian context.

The only negative aspect of a Term Insurance Policty from the view of the client is that there is no maturity benefit, or in other words it is a without profit policy.

The main poistive aspect of Term insurance is it is cheaper because only the mortality charges and other administration charges are levied. The element of saving is absent in this policy. The life assured is covered for larger amounts.  You can change you insurer at any given point of time because the question of surrender value is not involved. The premium is lower for shorter periods.

Most people take insurance policy for saving purposes rather than risk cover. As an Investment and Insurance Advisor I always suggest a Term Insurance to my prosepctive clients. 8 out of 10 straight away reject the proposal as there is  no maturity value. No amount of explanation will do to make understand the concept of keeping insurance and investment seperately.

Because of the fear of losing a client the agents usually do not push for the same. They only tell what the clients wants to hear. And many of them are even not aware of a Term Insurance. It is not always the case that it is due to the low commission, but all of the above facts contribute towards it being unpopular.

sorry I am in a hurry, correct it yourself !! see  you later.

Answer 3

Term insurance has nothing negetive. The cost of insurance in any product is called Mortality charge. In every product you take, this charge will be deducted based on your age & insurance amount. So You pay for the insurance whenever you buy any plan.

In term insurance, you are charged for only cost of insurance & that too at a constant rate. Initially you pay more then mortality rate & you pay less then mortality rate in later years. So there is no mean that you will get any return as you are just buying insurance.

As we always think about return assosiated with any policy, we do not think about the amount of insurance we can purchase with term plan. The amount of insurance required for a person can only be provided by term plan.

Answer 4

all insurance type is have positive side subject if customer's need base. term mean if happen then payable to nominee and if not then did not get any rupy. so secured your self with low cost and remaining money can invest in money market directly or indirectly through mutual fund.

ULIP concept will no more in our market so avoid it and enjoy

bye

Answer 5

well, ulips r different from term plans. if u want pure insurance only and not for investment or better returns in the end of policy, its better to go for term policy. in term plans the premium will be very low, and the risk cover is high. so, the agent can not get good commission. but ulips are also good. because, u need not to pay for a long time. u can withdraw after a short time say 3 years. and its gives returns according to the stock market. its more easy to agents to convince the customers in the case of ulips

Answer 6

Some agents try to push insurance products that have higher payments.  If he/she was a good agent, however, they would be able to explain what I am about to tell you, and help you make your own decision.

Insurance agents do not make a lot of money on term insurance because it is initially cheap. It is cheaper than other products, so they make less money on them. However, if you are looking to buy insurance that will cover you the rest of your life (not just 10, or 20, or 30 years) then you want to buy another type of insurance (like universal life, or whole life, etc.) because although they are more expensive at first, they wont be later on.  When you renew your term insurance 20 or 30 years from now, the cost will be based on your age then - much, much higher than it is now.

Answer 7

Universal life commissions to the agent can be significant so it is in the agent's self interest to try to steer you in that direction. Simple as that.

Because you favor mutual funds it would make sense for you to buy term for the specified period of time you anticipate you will need life insurance protection (5, 10, 15, 20 or even 30 years) and then continue to regularly invest in mutual funds.

If your agent can't understand that get a new agent.