Be it regular insurance plans or otherwise, it is crucial on the part of the potential policyholder to review the pros and cons in order to measure his or her risk appetite and the potentiality of the scheme in question. So far as regular term life insurance schemes are concerned, they come with a set of undeniable issues.
Irrespective of the outreach of the policy concerned or its convincing track record, it is critical to study the market dynamics before going for a life insurance scheme. Popular schemes (ICICI Prudential Life Insurance, for instance) are equally vulnerable and should be assessed inside out. Apart from that, the time of buying a particular scheme also affects the performance of the plan. Generally speaking, the issue at and is the supposed consonance between the objective of a scheme and the financial objectives of the concerned investor. The discrepancy often results in bad performance and this is all to blame either on poor planning on the customer’s part or being misguided by the concerned fund planner.
Consequently, there are both objective and subjective concerns associated with regular term life insurance plans. The following are the foremost concerns.
Premium Issue
- So far as premiums are concerned, they increase with the age of the concerned policyholder. With age, the policyholder naturally demands better protection in terms of healthcare and related accessibility. Higher premiums do not turn out to be very well in old age. As it is, insurance requisites are difficult to address in old ages when the premiums have shot up considerably.
- Higher premiums might at times force the concerned investor to claim insurance from other sources. Consequently, one might not come across any such insurance company (ICICI Prudential Life Insurance, for instance) whatsoever as most companies do not provide insurance beyond seventy years of age.
- At the same time, it is equally imperative to keep in mind that even if one is lucky enough to find a company which is ready to provide insurance, one is inevitably made to not to a host of heckling terms and conditions, thereby discouraging the investor to go any further.
- Naturally, for senior citizens and the like it is nearly impossible to surrender to strident terms and conditions as they would be concerned with addressing immediate financial issues. Therefore, it is not a good proposition to switch to a new life insurance scheme altogether.
Long Term Limitation
- Generally speaking, term insurance plans such as ICICI Prudential Life Insurance are not essentially capacitated to address long term issues such as funding child education, retirement plans, marriage etc. to name only a few.
- As it is, such schemes are more concerned with addressing short term goals and plans are not even remotely related to wealth creation. Therefore, building future corpus is especially not facilitated under the provisions of the term insurance scheme. Indeed, it is a major setback and caters to only a select age group, such as those who require a set of exigent priorities to address.
Income and Wealth
- As mentioned in the previous point, the core aspect of any regular term insurance plan, popular (ICICI Prudential Life Insurance, for instance) or otherwise, income generation is out of the scope.
- As a result, immediate income needs cannot be met with by a regular term insurance scheme. Specifically speaking, immediate capital needs for the policyholder or his or her family members may not always be addressed by the likes of a term insurance scheme.
Influence over Market
- So far as popular term insurance schemes (such as ICICI Prudential Life Insurance) are concerned, it is important to keep in mind that they do not generally facilitate the issuance of loans or even surrender values.
- Market dynamics constitute to be an undeniable aspect of insurance schemes. For instance, such turns as inflation and the like affect insurance schemes considerably.
- Keeping that in mind, term insurance schemes such as ICICI Prudential Life Insurance have the least influence over the market winds as hedge funds are not provided by them during inflation.
- As mentioned earlier, regular term insurance plans are not meant to generate capital. Put simply, these are not essentially profit plans. Consequently, they do not furnish the concerned insured with hedge funds to resist the impact of inflation and the like.
Renewal Issue
- A majority of regular term insurance schemes (such as ICICI Prudential Life Insurance) are especially deleterious in at least in this one aspect: the non-renewability of schemes.
- Should the concerned policyholder become uninsured at certain point of time, due to any reasons, financial, health or otherwise, no existing renewal policy as such exits in the term insurance services.
- What is even more distressing is that the concerned individual may not be able to sign up for a new term plan altogether. Lack of both renewal and availability of a new policy serve to hint at one of the biggest setbacks of the term insurance plan.
- So far as risks are concerned, the term insurance plans (such as ICICI Prudential Life Insurance) are chiefly designed to address the financial shortcomings of the traditional or conservative policyholder. They are strictly not meant for the likes of bolder investors who aim capital creation over a long term of investment.
- As it is, the regular term insurance plan such as ICICI Prudential Life Insurance is no doubt affordable and viable, but comes short of addressing some of the most fundamental priorities of even the least adventurous investor. As seen, both long term and short term needs suffer at some point.
Conclusion
The aforementioned issues should not serve to influence a blanket denial of term insurance plans (in fact, there are obvious benefits of the ICICI Prudential Life Insurance). It must be kept in mind that term insurance schemes are chiefly among the most popular insurance schemes in the market today, primarily for their affordability. The other side should also be judged fairly. The core point is that the choice of the insurance scheme and its eventual consequences has a lot to do with the individual prospects of the investor concerned. Indeed, it is up to the investor to review the factors of the term insurance plan and judge if they are in consonance with his or her own financial priorities. If not, it is inutile to lay all the blame at the door of the insurance scheme or the company.
