What Is Term Insurance?

Term insurance is a life insurance policy that provides financial coverage to the beneficiary of the policy if the life insured dies during the active term of the policy. A term insurance plan provides life insurance cover against the fixed premium paid for specified “term” of the year.

A term plan not only offers financial security to your family but also is capable of fulfilling its future needs such as your child’s higher education, child’s marriage, etc.

Among all the life insurance products, Term life insurance offers the highest life coverage for the minimum premiums during the term of the policy. Some Insurance Companies also cover permanent or partial disability wherein the policyholder’s regular income is disrupted.

Note: In case of survival of the life insured the coverage at the earlier rate of premiums is not guaranteed after the expiry of the term insurance policy. The buyer has to either obtain extended coverage with different payment conditions or forgo the coverage entirely.

Why Should You Buy Term Insurance?

Why buy Term Insurance early?

Your premium is decided on age at which you buy the policy and remains same, throughout your life

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There are various reasons to buy a term plan. However, here are the key and basic reasons that you must buy term insurance:

• The Dependency of your Family: You can use the term insurance money to meet the monthly expenses of your dependents and family when you’re not around. Moreover, it fulfils vital life goals such as education and marriage of your child.
• Protection of the Assets: A term plan allows you to take loans for assets such as a car or a house. Nevertheless, if you’re not around, your dependents and family might be burdened with the repayment of loans. In such circumstances, your family can utilize the term insurance pay-out in paying off the outstanding debts.
• Risks Related to Lifestyle: Present-day lifestyle problems often lead to various ailments and diseases. Some term insurance Plan do not just safeguard your dependents and loved ones after the demise of the policyholder but also offer critical illness protection for a lifetime. This key feature pays on the diagnosis of some critical illnesses such as heart attack or cancer.

Term insurance offers flexible plan options to suit the needs of every individual. You can choose:

• The amount of preferred sum assured Term life insurance premium payment option which can be one-time, limited pay or regular pay. Term of the policy Add on protection

Benefits of Term Insurance Plan

A term insurance policy is a must for every person and one cannot articulate its importance completely. Term insurance plans are the only life insurance products that are especially designed to solve a sole purpose of protection. Now that everyone knows, it covers death perils and risks; here are some other core benefits of term insurance Plan in India:

·       Safety for Loans and Liabilities

A term insurance also aids in providing safety for the dependents from your fiscal liabilities such as loans or any other debts that you have.

·       Cover Critical illness

Together with offering life cover, a term insurance plan also offers protection against critical illness. For a tiny add-on premium amount, Critical Illness cover offers lump sum payment when any critical illness such as Brain Hemraj/ paralyses, kidney failure, cancer, or heart attack, etc. is first detected. Online Term Insurance Plan also takes care of family in case of your disability or critical illness. It provides

• • Supplementary income in case of loss of income due to accidental disability or illness.
  • Get a lump sum amount if diagnosed with critical illnesses.
  • Additional sum insured in case of accidental death.

·       Higher Sum Assured at Affordable Premiums

One of the most alluring features of term insurance Plan is that the premiums are always the lowest, unlike the other life insurance products. Moreover, the sum assured offered under term Plan is relatively higher when compared to the premium amounts. Regular term insurance Plan, including TROP Plan come with a 110% return on premium benefit when the policy matures.

·       Tax Benefits

Term insurance plan comes loaded with tax benefits on the term policy premiums paid. New-age term insurance Plan along with critical illness cover also provide some additional tax benefits on the premiums paid by the policyholder. One can also avail benefits subject to the conditions u/s 10(10D) on the amount that his/her family receives in the case of an untimely demise or unfortunate event.

·       Support in the case of Disability

In some of the term Plan, the insurance provider pays the future premiums in the case of permanent or total disability. Consequently, the policyholder’s life insurance cover continues even if s/he is not able to make payment of the premiums.

·       Add-on Protection

So as to amplify the security of the family, a term insurance plan offers add-on pay-out in the case of an accidental or untimely demise.

·       Death Benefits

On the demise of the life assured during the tenure of the policy, the nominee/ beneficiary of the policy receives the total death benefit chosen at the time of commencement. Depending on the type of term insurance plan, the death benefit may stay the same over the whole tenure of the plan (standard term Plan), decrease (decreasing term Plan) or increase (increasing term Plan). The insurers provide various options of payment for the term insurance plan. These include a lump sum payment, lump-sum payment plus an annuity that may be monthly, quarterly or yearly, or simply annuities that are spread over the agreed number of years.

·       Maturity Benefits

Term insurance plans don’t come with any survival or maturity benefits. If one wants maturity benefits, then a TROP (Term Return of Premium) plan is suggested.

·       Survival Benefits

A standard term plan does not have any survival benefits. However, the demand from investors has meant that various companies have opted to launch term insurance plans with survival benefits. Called Term Return of Premium (TROP) Plan, the term plan refunds the premium at the end of the term plan tenure if the insured person survives the period. The TROP plan is becoming popular with people who are looking for savings as well as insurance with their term plan. His term insurance plan has a higher premium than the standard term plan but has the advantage of assurance that the policyholder will get back the premium he or she paid to the life insurance company for the cover. Policy holders should read the insurance terms and conditions carefully to ensure they know the amount of money they will get back as survival benefits. Check out the term insurance policy that meets your needs with our term insurance comparison.

Key Features of Term Insurance Plan

Term Insurance plans are specifically designed to secure your family’s basic financial needs in case of death or uncertainty. According to the plan, family/dependents of the life insured is/are eligible for a lump sum amount in case of death or critical illness (if applied for) of the life insured during the tenure of the policy.

Let’s take a look at the salient features of the term insurance Plan.

·       Cost-Effective

Buying a term insurance plan is extremely cost-effective and does not create a hole in the pocket of the individual. A term plan provides instant insurance solutions, which can easily be availed by making premium payments. The term life insurance premiums are low when compared to any other life insurance products.

·       Easy to Buy

Buying a term insurance policy is no more a tedious task rather one can easily buy an online term plan on the premise of their requirements. Before one zero down a term insurance policy, it is recommended that conduct thorough research in regards to the same and only then make an informed decision of buying an online term insurance policy.

·       Long-term Protection

Choosing the right term life insurance plan for a long-term perspective will protect your family from any financial liabilities. One has the option to choose a term life cover for up to 60-80 years of age.

·       The Convenience of Payment

One can easily make the payment towards term plan premium on a monthly, quarterly or yearly basis on the premise of their convenience.

·       Rider Benefits

One has the option to enhance the term insurance plan by opting for riders or any other variants for instance including the return of premium.

·       Additional Rider Benefits

Additional optional benefits such as critical illness and accidental death/ disability or Accelerated Sum Assured are also available under the term insurance policy. The benefits can be added to the term plan by paying an additional premium amount. The best term plan in India is the one that offers these riders at a comparatively lower price than opting for such cover through individual Plan. Choose the additional optional benefits for your term insurance plan with our website. Use the term plan comparison features to shortlist the additional benefits you need.

Some common term insurance riders are:

• • Critical Illness Rider
  • Waiver of Premium
  • Accidental Death Benefit Rider
  • Accidental Total and Permanent Disability Rider
  • Income Benefit Rider

·       Adjustable Cover

With buying the best term insurance plan one has the liberty to either increase or maybe decrease the sum assured subject to the financial changes in one’s life.

·       Disability Benefit

A disability is mostly caused because of an unfortunate accident or sometimes even because of the illness. In case the earning member of the family faces any sort of disability it directly affects the income earning capacity of the family. Therefore, when buying a term insurance plan, it is advisable to include a disability benefit and make the term plan even more secured at an affordable additional premium price.

·       Cover Against Life-threatening Ailments

The mere thought of life-threatening disease scares anyone. In case, somebody from a family is diagnosed with a life-threatening disease it could be a matter of great concern both mentally and financially. When buying a term insurance plan, choose a critical illness cover and secure the family from any financial stress that may occur.

·       Tax Benefits

Term insurance plan comes with excellent tax benefits. You can avail lucrative tax benefits within Section 80C and Section 10 (10D) of the Income Tax Act, 1961. Moreover, the term life insurance premiums paid for the Critical Illness Benefit towards term plan, also qualify for a deduction within Section 80D.

Note: Tax benefits are subject to changes in tax laws. Please consult your tax advisor for details.

Regards.

M.C.KILANIA

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