You are an irreplaceable part of your family. Nobody can take your place as a son, daughter, or parent in your family.But in the unfortunate event of death, wouldn’t you want something to replace your role as a breadwinner of the family?

It is possible with Term Life Insurance.When you buy Term Life Insurance, you pay a small amount to the insurer at regular intervals for a specific period. In exchange for these premiums, the insurers give financial protection to your loved ones.

In case of death during your policy term, the insurance company pays your family a large sum. This sum could be 1 million Naira or 5 million Naira, or maybe 10 million Naira.

Term Life could be a lifesaver for your loved ones, especially if you’ve loans to pay, kids to raise & educate, and no retirement plan.

You have the power to decide everything: the span of the term insurance, your premium amount, and the cover.

Unless you have committed fraud or suicide within a year of buying the policy, your family gets this lump sum.

Life is unpredictable, and we never know when tragedy may strike. That's why it's essential to prepare for the unexpected, and one of the most important ways we can do that is by protecting our loved ones financially.

Your spouse, kids, parents, and maybe other family members rely on you for a living. You might be the only person who could give wings to their dreams, especially to your kids.

What happens to those dreams, the life they are living now under your protection, if you pass away?

Doesn’t it seem plausible when you give it a thought?

Every responsibility you’re shouldering now will fall upon your spouse, child, or your old parent.

It is a scary thought, right?

If the thought of you not being around for your family scares you and makes you want to protect them at all costs, you need Term Life Insurance.

Term Life Insurance is the most affordable way of protecting your loved ones even in your absence. It is the much-needed assurance to your family of your protection and care.

The earlier, the better.

At least, that’s what we recommend for affordable premium amounts. As you age, the premiums of term Life Insurance get higher. So it could become costlier as you delay.

If you’re 21 and earning, this is the right time to buy a Term Life policy.

One of the advantages of buying sooner is that the premiums would be low. Also, at 21, you may not be the only earning member of the family. In addition, your parents might be active, so saving becomes easier compared to 7-8 years later when your parents might retire.

Another reason to start early is that once you get married, you’ll have more responsibilities and expenses, wanting to procrastinate on ‘savings.’

And as the number of dependents increases, the need for Term Life also increases. In addition, your untimely death could rob your loved ones of their dreams and lifestyle, and Term Life Insurance is one of the most affordable ways of securing them.

So if your age is over 21, and you’re earning & filing returns, then this is the right time to buy Term Life Insurance.

The insurance companies need just the basic things from you, which could verify your identity, where you live, your income, and your age.

So here are the documents which you might need to buy a Term Life Insurance Policy:

• Proof of identity: You can offer any one of the following documents as proof of your identity:
• Passport
• NIN
• Driving Licence

• Proof of address: We’ll always assist you with what proofs are accepted by which Insurers, but the following fall under the generally accepted category:
• Bank statement with last six month’s transactions
• Passport
• Electricity bills
• Voter Id card
• Driving licence with address

• Proof of income: As an applicant for Term Life Insurance, you must establish that you are an earning person. You might need to submit some of the following documents:
• Salary slips for the last three months
• Income returns of last three years
• CA certification if you’re self-employed or run a business

• Proof of age: Mentioning the correct age is mandatory, and you may have to give them one of the following documents as proof:
• Voter’s Id card
• Birth certificate
• School leaving certificate
• Passport
• PAN card
• Ration card

There are several factors you must consider before choosing the Term Life plan:

• Step 1: Take your lifestyle and number of dependents into consideration

When buying a Term Life cover, you must consider the number of dependents and your basic standard of living to make the right choice. Check your yearly expenses to analyse your lifestyle. When you are clearer about your lifestyle, you’ll make a better Term Plan choice, securing your loved ones efficiently.

• Step 2: Assess your current liabilities

By liabilities, we mean your outstanding loans and personal debts. If something unfortunate happens to you, how much of a financial risk could your absence pose to your family? Before choosing a Term Life plan, you must consider the EMIs and other debts.

• Step 3: Consider Term Life Add-ons

Insurers have special plans such as Term Life add-ons, which offer added protection and value to your policy. You can extend your coverage by choosing these add-ons:

• Critical illness add-on: When you are diagnosed with a critical illness such as cancer which could put you in a financial crisis, this add-on helps. Critical illness add-on saves you from treatment costs, protecting your family from the burden of instant medical bill payments.
  
• Accidental death add-on: If you choose this add-on, your family gets the benefit of an additional payout in case of your death in an accident.
• Premium waiver on terminal illness diagnosis: If you get diagnosed with a terminal illness during the term as a policyholder, this add-on will waive all your future premiums.

• Step 4: Consider inflation to choose an ideal term cover
  

How much money should your family get in case they lose you? Choosing coverage is not limited to the number of dependents and liabilities. Inflation is the most overlooked factor when choosing a term plan.

Think of it like this.

You covered your life for 10 million Naira. And your family put it all under a fixed deposit. At 6% interest, they might get 60,000N. Will it be enough for your family to live on this for the next 20 years considering inflation?

If not, you should go for a higher cover.

• Step 5: Check the insurer for its claim settlement ratio (CSR)
  

Choosing the right plan involves checking out the insurer as well. Ombrella has partnered with the best insurers, but you can also check the company out as an applicant.

The claim settlement ratio is the % of claims that the insurer has passed. A higher CSR ratio suggests that the insurer’s claim process is faster and more dependable.

• Step 6: Insurer’s solvency ratio

Finance is all about safety, and this includes insurance companies. Check out the solvency ratio of your insurer to see if the company can settle your claim if the need arises. You can check it out here.

• Step 7: Choose and pay the premium

After considering all the factors, all you have to do is choose the right plan here on Ombrella. You can buy a Term Life plan on Ombrella within minutes and pay your premium to secure your loved ones.

With a Life Term Insurance policy, you pay premiums for a specific period or until you die. If you fail to do so, your policy lapses, and you lose your investment.

So, you can decide the span of your policy, but you have to choose ‘how long’ you want to cover your life when you make the purchase.

While making this decision, you must remember that this policy is your financial replacement and security for your family.

When you’re young, your family might not have enough savings, which changes as you grow older. Moreover, you might also have several loans and investments to plan. As a result, there’s more risk of not being there for your family when you’re young.

As you grow older, your kids grow up, you no longer have loans and EMIs to pay, and fewer risk factors are involved. So an ideal policy duration should cover you for your middle-age years and some years after that.

Buying a Term Life plan that covers you until you’re anywhere between 60-70 is ideal.

Term Life Insurance policies are a long-term investment that offers little flexibility. Once you decide on your coverage, you can’t change it. So if you cover your life for 10 million Naira, it remains the same until the end of the term.

But a lot could change during the term. You might get married and have kids, increasing the dependents. The life cover you opted for might not be adequate for your family.

That’s where Life Stage Benefit helps you.

Life Stage Benefit is an add-on, and if you opt for it, the insurer gives you an option of increasing your cover at your major life stages (marriage, kids, etc.).

If you aren’t married, choosing the Life Stage benefit will help you give adequate financial security to your loved ones.

There are times when the insurer can waive your premium. In such situations, you will no longer have to pay the remaining premiums and will continue to get the benefits of your Term Life Insurance.

As an earning member of your family, you buy an insurance policy that protects your family financially in case of your death.

But what if, one day, you meet with an accident that leaves you disabled? Or, what if you are diagnosed with a critical illness like cancer?

It would mean you can no longer provide for your finances like you used to. Some insurers will allow you to opt for a Waiver of Premium in such a case. They will allow you to keep your policy without paying the remaining premiums.

In return, they’ll charge a small fee you agree to when buying the policy.

No, you do not get extra cover in case of accidental death. However, you can benefit from extra cover if you opt for it while buying term life insurance.

According to WHO, there were 41,693 deaths in Nigeria alone owing to road accidents. There are ample reasons that contribute to that number: bad roads, rash driving, intoxicated driving, speeding, etc.

These numbers are scary, and if the uncertainty of an accident worries you, it is ideal to opt for an accidental death benefit rider.

Along with your term life premium amount, the insurer charges an extra fee for you to avail the accident coverage.

In case of accidental death, the insurer pays the term life insurance amount and the accident cover benefit.

It doesn’t sound like much, but in case of an earning member’s absence, the family could use extra protection and an added accident coverage amount.

After all, it’s about protecting your family financially in the best way possible!

Critical illnesses like cancer can be traumatic. Dealing with cancer can affect you physically, mentally, and financially.

You do not have to worry about your medical bills if you have a comprehensive health insurance policy.

But what about the money you can no longer earn because of your illness? What if you can get financial compensation, which helps you with your daily expenses?

If you opt for a critical illness benefit, your insurer will pay you a portion of the sum assured in cash. You can choose the amount when opting for the benefit. The amount you get will help you deal with the lost income source.

You no longer have to worry about your finances. It will reduce stress and help you focus more on your recovery.

When buying an insurance policy, we do not think of opting for added covers like terminal illness benefits. Who would want to pay an extra amount for a situation that may or may not arise? But life is unpredictable.

It is hard to deal with a terminal illness, but it’s worse when you have to deal with the financial burden. Hospital visits, surgeries, medication, consultations, and other medical expenses can drain your savings.

Health insurance can help you pay the hospital bills, but it does not cover related expenses like medication.

If you want an additional safety net, opting for the terminal illness cover is ideal. Some insurers pay out the entire sum in cash if you’re diagnosed with a terminal illness. It can help you get the best treatment.

Being diagnosed with a terminal illness would mean losing your job. However, with the terminal illness benefit amount, you can also take care of your daily expenses.

The simple answer to this question is yes. We’ll tell you why.

The purchasing value of money decreases over time. In simpler words, things get more expensive with time. So, for example, the amount of money your parents paid for their education would be considerably less than what they paid for yours.

Similarly, the inflation rate can affect the value of your Term Life Insurance benefit amount. For example, an insurance benefit of 10 million Naira would seem appropriate today, but 20 years later, the same amount wouldn’t have the same value.

How can we deal with it?

One, you can buy an expensive insurance cover, considering the inflation rate and the number of years after the policy expires, say, 15 years.

Two, you can opt for a term life policy where the insurance amount increases yearly by a certain percentage, say, 5% or 10%. It also means that the premium amount will increase every year.

The benefit of increasing coverage is that your family or loved ones will receive sufficient amounts for their expenses, despite the inflation.

We’re sure you’re wondering, ‘Why would anyone want to decrease their insurance cover?’

While buying an insurance policy, you think about the financial security of your family and people who are dependent on you. In case of your unfortunate demise, you want the insurance cover to take care of their expenses and future.

But, with time, your liabilities decrease. You might have paid off your loans, or your children would be financially independent. You no longer need an expensive insurance benefit. In such cases, some insurers offer an option to decrease your cover.

With a decrease in cover, the premium amount also decreases.

But it’s tough to assume that you or your family would no longer need a larger insurance benefit. So before opting to decrease your policy amount, ensure that you’ve considered the terms thoroughly!

Filing a Term Life insurance claim is very straightforward.

• Step 1: Get in touch with your insurer about the policyholder's death as soon as possible. You must fill out a claim form with all the necessary details. Be extra careful while filling in the details to avoid rejection.
  
• Step 2: You need to submit certain documents to process the claim. The insurers will generally require you to present the death certificate, original policy documents, identity proof documents, medical records, etc. Ensure that these documents are ready to submit for a faster and more efficient claim process.
  
• Step 3: The insurer will often investigate the circumstances of death. The hospital must submit medical records in case of a serious medical illness. Or, in case of murder or suicide, you need to submit the FIR and the postmortem report.
  

With the Ombrella app, you can file your claim online within minutes.

There are so many reasons why your insurer can reject your Term Life claim.

• Incorrect details in your claim application:

It is necessary to fill in the details of the claim form correctly. In case of any errors, the insurer can reject your claim.

Pro Tip: Ombrella advises the beneficiary to complete the form carefully and cross-check the information before submitting it.

• Non-disclosure of your medical history:

You must inform the insurer of your pre-existing medical history. In case of non-disclosure, the insurance company can reject your claim. In addition, your medical history or habits like
consumption of alcohol or tobacco can also affect the premium amount of your policy.

• Not updating the beneficiary details:

You need to keep your insurer updated regarding the details of the beneficiary. For example, you need to share a change in their contact details, address, etc. The insurance company can
reject your claim if the details are not updated.

• Lapsed policy due to unpaid premiums:

You can claim the insurance benefit if the policyholder has paid all the premiums or if the policy is active. You must pay your premiums on time to avoid rejection.

Pro Tip: Check your premium payment status from time to time to avoid future claims settlement problems.

• Not filling out your insurance proposal form:

The insurance buyer often depends on the insurer/agent to fill out the proposal form. Unfortunately, the agent might need the medical history or make an error while filling out the film.
Therefore, you must fill out the form yourself and double-check it before submitting it. Any mistake in the form can become the reason for your claim rejection.

• Not disclosing your pre-existing insurance policies:

When you buy an insurance policy, you are required to submit details of your existing insurance policies. The insurance amount, policy number, and policyholder's name are some details you
need to give.