10-Year Life Insurance Policy?
I had a question that please tell me if Straight Lines offers a 10 year life insurance policy because mostly we hear that people buy year policies or in a shorter period, more people know that you get interest in a short period of 20 years. Profit in the short term, so please tell me why you people, i.e. area managers or those who advise insurance consultants, don’t offer more people short term or short term life insurance policies and why don’t they say yes, so please explain it a little and give us the details about it, thank you very much.
Understanding Long-Term vs Short-Term Life Insurance
Friends, Masha Allah, your question is very good and it is a question that comes to the minds of most people here. Let me tell you that first of all it is important to know that the expiry of life insurance is long term i.e. everyone wants to get maximum benefit and the insurance company gives maximum benefit only to those who want to take long term policy.
And here we should also mention this because we also have long term plans which are for the whole life, so in our eyes long term policy is 20 years or more, but if we have long term plans for 10 years or more in the eyes of people.
Accordingly in our policy, then our long term plan starts from 20 years or above and in our eyes 10 years term is in short term because in comparison you have 50 years, 55 years, 60 years plans, you can take a plan for a period, so it is close to 10 years. What is hidden is short term considerations.
Why Is Return Low on 10-Year Policies?
Well, this 10-year policy means that the return to the policyholder is very low. Today, compared to 20-year or longer-term policies, it is exactly like that. You are absolutely right that if we look at the previous hand, if you evaluate on the Stratella website, you will see three labels there.
The return for the 10 to 14-year policies is different and the lowest. It is visible on the screen. You can also see the return for 19 years and then you will see the maximum of 20 or more than 20 years.
So, because of that, the return for the 10-year policy, 10 years 11, 15, sorry 13, 14 years, is low. So, you should understand that if we talk about a 10-year policy, you can buy a policy but it will give you a return.
Example: Rs.1 Lakh Per Annum Investment
It is about 1.5 times and let me explain to you with an example that if a person pays ₹1 lakh per annum and opts for a tenure of 10 years, how much will he pay in 10 years, 10 lakh. Now the average profit will be half if he is paying ₹1 lakh, so from the straight line side, if you look at the average regularly, you will see that the profit is 16000.
But now if we combine the profit of 10 years, then the bonus you are giving is about 50 thousand and the bonus is 50000.
Why We Don’t Recommend 10-Year Policies
I thought it is right to invest 5 lakhs and you will get 15 lakhs, so generally 10 because you know about our policy that in 10 years you should understand that if you want to know the value of your policy, we do not recommend a 10 year policy because its bonus rate is less compared to a 20 year long term policy.
And that is why we focus on the cost of your premium 2 years. More and maturity is more and if you talk about 10 years then I will give you an example of that.
10 Years vs 20 Years
I am telling you that if you want to invest 20 lakhs in 10 years, then your annual income will be ₹2 lakh, if you want to invest with 20 lakhs in 20 years, then how much will you earn annually today, ₹1000 sir, now this difference is in front of you.
So generally there are couples who have started their married life, who want to start their life. Save money in their future, then for them 20 year plan is very good, okay, but as they say, it is a matter of necessity, at some point a person does not have time, so he can take a 10 year policy.
Life Protection Through a 10-Year Policy
And yes, it is better than a policy, if there is savings, then if we talk about 10 years, if we talk about installments, then whatever someone gives for 10 years, it will be returned, come here, his amount increases.
And the biggest thing is that he does not know whether he will be able to complete 10 years or not, if tomorrow he gets such a condition that he dies, then his family will die. He, then his family gets compensation, so protection is provided through a 10 year policy.