What is term insurance?
Term insurance is an insurance policy that provides coverage for a specified period. During these years, if the policyholder passes away, then the nominee will receive a lump sum amount as a benefit. In this world of uncertainties, a term plan to safeguard the financial future of your family. Term insurance plans take care of the following:
- Replace a lack of income for a certain period
- Pay day-to-day living expenses
- Pay house rent
- Pay debts that one leaves behind
While purchasing term life policy, you need to introspect into various details to suit your financial needs and liabilities.
- Is the plan offering coverage for terminal illness?
- Will there be riders like accidental benefits and others?
- Riders such as critical illness, will they be covered by paying an additional premium amount?
- Will the premiums paid to be likely to offer Income tax benefits under section 80C?
- The amount likely to pay as a lump sum, installments or monthly equated sum.
Benefits of term life insurance
- By paying affordable premiums, you get a high amount of cover, which will help your kith and kin to pursue their future and life without hassles.
- Riders such as accidental benefits and critical illness coverage provide total financial security to you and your family.
- If diagnosed with terminal illness coverage is paid a lump sum.
- You get the benefit of income tax on the premium paid under section 80c.
- You also get the benefit of loan protection optionally.
- You also get the option of paying the premium annually, half-yearly, or 2/3 of the term period.
Types of term insurance plans and which one should you choose?
- Pure term plans
A pure term plan offers life cover up to a certain age and pays out the amount assured in case of the untimely demise of the policyholder. If you outlive the policy term period, you don’t get anything in return.
- Return of premium term plans
In a pure term plan, you don’t get anything in return if you outlive the policy period but here in return of premium term plan premiums you paid will be returned if you outlive the policy period.
- Decreasing term plan
If you want to repay the loan or pending debts, opt for this plan. In this plan, your premium remains constant, whereas your sum assured will go on decreasing every month or year. The plan terminates when the loan is fully paid.
- Increasing term plan
In the increasing term plan, your premium goes on increasing and so does the cover every year.
- Convertible term plan
This policy allows you to purchase a low premium and low sum assured plan. And later, you can convert this plan to a high premium and high coverage.
We hope you get an appropriate term insurance plan to ensure the safety and security of your loved ones in your absence.