Buy Term Insurance Now Amid Omicron Variant of Coronavirus

With the onset of the new Omicron variant of coronavirus, the term insurance domain has undergone delayed stability. Despite not knowing the full implications of the new Covid-19 variant, it is not hard to guess what lies ahead based on our understanding of the second wave. This understanding must act as a reminder of the uncertainty of life and the importance of life insurance. While insurers are going through a reassessment phase, they are still waiting to detect the impact of Omicron before concluding their term insurance strategy.

After claiming the lives of countless breadwinners in its first and second waves, Covid's new variant has evoked a sense of urgency regarding the importance of term insurance. With the Omnicron variant putting governments on high alert, the chances of another pandemic are anticipated. This is where term insurance steps in to provide maximum protection at an affordable price. However, after the last two waves of Covid, the term insurance sector underwent perpetual tension, owing to the higher mortality rates during the pandemic. Hence, if you do not have term life insurance, the best time to get one would be now.

What is Term Insurance

Term Life Insurance stretches out for a definite time period or term and is among the most affordable plans in the market today. In a term life plan, the nominee receives the sum assured after the death of the policyholder. Its purpose is to provide a safety net for the family of the deceased and safeguard their future financial needs. It acts as a tool that helps provide financial security to the family of an individual in their absence. Term life insurance offers death benefits that are paid out to the beneficiaries of the policy in the form of the sum assured.

((calculator))

As a rule of thumb, your term insurance cover should have at least 20 times your gross annual income. Let's take the example of Aditya Garg, who is a 33-year-old resident of Delhi, with an annual income of 5 lacs. Therefore, Aditya should opt for a cover of 15x to 20x of his annual salary, or a cover between 75 lacs to 1 crore.

Types of Term Life Insurance

There are different kinds of term life insurance plans which have different unique features. Given below are 4 commonly known types of term life insurance plans:

1. Standard Term Life Insurance Plan

2. Decreasing Term Life Insurance Plan

3. Increasing Term Life Insurance Plan

4. Return of Premium Term Insurance Plan or TROP

As news about Omnicron cases is pouring in from various parts of the world, insurers are waiting to see just how dangerous the new variant is and the rate of hospitalization it begets. A step in that direction is that besides a waiting period for Covid survivors, insurers are also asking customers for a negative RT-PCR report in case any of their family members formerly contracted the virus. As per a recent report by Investment Information and Credit Rating Agency of India Limited or ICRA, the total sum assured for the private sector was Rs 4.04 lakh crore in FY2021, up only 1% year-on-year. While for LIC, it had increased 7.5% year-on-year to Rs 8.9 lakh crore. Surprisingly, Indian term rates are lower than most European countries despite having better life expectancy.

((relatedarticle_1))

The Way Forward

At this juncture, term life insurance is essential and needs to be a top priority for all. As the Mortality rates that indicate insurance companies to adjust insurance premiums are not in our control, our best choice is to get insured before the premium rates skyrocket. In today's world, Term insurance cover is among the best personal financial risk management tools. Hence, with the present Omnicron situation, insurance needs dictate that one should opt for term insurance cover right now.

So, if you were planning to opt for a term insurance cover, it is advisable to assess your insurance needs properly and get term insurance as soon as possible and protect your loved ones.

((newsletter))