Guide to Secure Your Family with Term Insurance
Are you looking for a term insurance policy that is both affordable and reliable? Are you having a difficult time understanding the term insurance benefits? Do you want to get the best term plan with a return of premium?
If you have answered all of these questions with a resounding yes, then you need to understand the different aspects related to a term insurance policy quickly. And we are going to help you today with that so you can secure your entire family as soon as possible.
Guide to Securing Your Family
There are several hassles that you might face in a day. And even after all that, the task of securing your family financially still remains very important. This becomes more important if you are the sole bread earner of your family and you want to protect your entire family after you are gone.
Beyond that, term insurance policies can also help your family prepare for what they need to do in case of such eventualities. There should also be a savings fund which your family can rely on in case of adverse circumstances.
Understanding Term Insurance
A term insurance policy is a type of life insurance plan. These policies are quite affordable and provide a lump-sum amount to the nominee or the nominees if the policyholder dies within the term period of the policy.
It should be noted that under this policy, the policyholder is required to pay a premium for the duration of the term insurance. The duration of the term insurance can vary from as little as five years to an entire lifetime of the policyholder.
There are also certain factors that one must consider before purchasing a term insurance policy. Some of these factors like the claim settlement ratio of the insurance company, reliability, reputation of the company, the premium rate you are being charged, the possibility of enhanced cover, and additional riders provided.
The Difference Between Term Insurance and Endowment Insurance
Many individuals often get confused between term insurance policies and endowment insurance plans when they are in the market. We’ll help clear up that confusion in this section.
In a term insurance policy and endowment insurance, a lump-sum amount is provided to the nominee in case of the death of the policyholder. However, in the case of an endowment insurance plan, there is also a savings aspect to it. This means that if the policyholder survives the tenure of the endowment insurance plan, then he or she is eligible to receive a maturity benefit from the insurance provider.
In most cases, term plans are more affordable than endowment plans. This is mainly because of the fact that no maternity benefit is provided to the policyholder if he or she survives the tenure of the insurance. This means that the policyholder will pay a lower premium under a term insurance policy than an endowment insurance plan for the same sum insured value.
Ideally, one should opt for a term insurance plan if the main goal is to get financial security at the lowest possible cost. An endowment plan is a good option for individuals who can afford to pay a higher premium rate.
The Right Time to Get Term Insurance
Ideally, an individual should get a term plan as soon as he or she starts earning money. This is because term plans are available for very cheap premium rates to people in the younger age group. This is true even if an individual does not have any dependents when he or she first starts earning money because with an increase in age there will also be a higher premium amount.
Additional Riders to Include in Term Insurance Policies
If you think that a basic term insurance plan will not meet all of your needs, then it is a good idea to start looking at the additional riders provided by the policyholder. You can opt for these additional riders at an extra cost and improve your coverage of the policy.
Some essential riders that you can consider adding to your basic term insurance policy are:
- Accidental Death Benefit
Considering adding an accidental death benefit is important in a policy. This rider will ensure that the nominee of the insurance policy will get an additional sum over and above the basic sum insured in the event that the policyholder dies due to an accident. This gives extra financial security for deaths caused by unforeseen accidents.
- Waiver of Premium
There are several discounts and bonuses provided by insurance providers throughout the year to their customers. You should keep a close watch on these benefits and see if you can get any waiver of the premium amount. It should also be noted that in most cases if an individual fails to pay the premium amount due to loss of income or disability, then the policy still remains active.
- Income Benefit
Under this benefit, the nominee under the policy will get an additional income. This is different from the sum insured on a monthly basis that is provided in the event that the policyholder dies.
Beyond all of these benefits, it is also important for policyholders to remember that they need to renew their term insurance policies on time. There is often a grace period provided with term insurance policies, which is applicable if the renewal date of the policy has passed and the policyholder has failed to renew due to some reason.
Apart from that, it might also be a good idea for an individual to get a medical test done before purchasing a term insurance policy. This will allow the policyholder to get an additional discount on the premium amount of the term insurance plan. This will be applicable if that benefit is provided by the insurance provider.
At the end of the day, one should remember that the terms and conditions of these term insurance plans can differ from one insurance provider to another. However, one can easily navigate through all this if he or she conducts thorough research and makes an informed decision.