A term insurance is like a safety net. It protects your family in your absence. Imagine the challenges they might face with all the household and higher education costs looming on the horizon and other expenses. On top of it, if you leave behind any debts, then it becomes a difficult situation. Thus, in order to avoid such hardships, securing a term policy as soon as possible is essential.
What Does Term Insurance Offer?
Term insurance provides substantial life coverage for a specified term, ensuring financial security for your loved ones if you pass away during that period. This tenure can be chosen as per your requirements (you can coincide with the time of retirement) and age-based eligibility.
How it works?
A sum assured (fixed amount) will be paid by the insurer to your nominees in such scenarios. , you can benefit from tax deductions (as per Section 80C) on the premiums paid for this coverage. Also, you can incorporate more riders into your policy to get maximum financial coverage.
So, in case of situations like a critical illness diagnosis or disability resulting from an accident, there will be a similar payout from the insurance company (in return for a nominal premium payment throughout the policy period).
What are the Benefits of Term Insurance?
Let us take a look at some of the key advantages of a term insurance:
- You get a life coverage for a long duration.
- Flexibility to choose and scale up coverage at various stages in life.
- Relatively lower premiums than many other life insurance plans and that too for higher coverage amounts if you start early (since insurance companies perceive you as a low-risk customer).
- Get options to boost your coverage with multiple riders.
- Your family can use the sum assured in any unforeseen situation to not only pay for higher education, weddings, and other goals, but also to take care of monthly expenses and repay loans.
- Tax deductions help you amass good savings over a period of time.
Types of Term Insurance Plans
Now that you have learned about what it offers and its benefits, it’s time to learn about the various types of term insurance. These are:
- Level Plans– Premiums stay fixed for the whole tenure, along with the sum assured.
- Increasing Plan– The sum assured increases over the years while the premium stays the same. Some policies have a limit till which the sum assured can grow.
- Decreasing Plan– In such plans, the sum assured decreases annually until the policy tenure is completed. You can also expect relatively lower premium amounts compared to various other plans.
- Return of Premium– Interestingly, you will get back the premiums you paid if you survive the policy’s tenure. Otherwise, the sum assured payout comes into play.
- Convertible Policies– These are policies that have been switched to other life insurance plans, such as endowments and whole-life plans.
These are some of the key aspects of term insurance policies that you should know more about. So, without any further delay, secure your family financially with the right term plan today!
