No Limit of Age to Buy Term Insurance Plan
Term insurance plans are the most popular type of insurance plan available in the market. If you have ever tried to buy any type of insurance policy, then you must have come across term insurance plans.
The best term plan provides protection to your entire family. In a term life insurance policy, the policyholder pays a certain sum of money to take care of his or her family’s financial needs in case of the policyholder’s unfortunate demise.
It is vital for an individual to purchase the best term insurance available in the market if one is the sole breadwinner in the family. A term insurance policy can help in taking care of everything from your family’s basic financial needs to your child’s education and future expenses.
What is Term Insurance?
A Term insurance policy is a type of insurance plan that provides protection in the form of financial assistance. This is provided on the death of a policyholder. It should be noted that this assistance is only provided for a given time period. And this time period is decided during the inception of the policy.
This applies only to the policyholder and the death benefit is paid to the nominee. The death benefit can be defined as the payout that the policy will provide to the nominee after the unfortunate demise of the policyholder.
Why is a Term Insurance Plan Necessary?
The biggest reason why one should purchase a term insurance plan is to protect the future of the family. A term insurance policy provides financial protection against the uncertainty that is present in the future.
Some other reasons why you should get a term insurance plan are:
- It will protect your family when you are not around
- It will provide financial assistance and stability for the needs of your family
- The payout will help the family live in a comfortable manner
- The family can clear all existing debts
- A term insurance plan provides high cover at a very affordable premium
Benefits of Term Insurance Plan
We know that there are several reasons why you should get a term insurance plan. But do you know that there are many other benefits that you can get when you purchase a term insurance plan?
Let’s look at some of those benefits now. These benefits are mentioned in a list that is given below.
Low Cost of Premium
The best feature of a term insurance plan is that it provides a large cover at a very affordable premium rate. On top of this, the earlier you buy, the lesser the premium you will have to pay. This is why purchasing a term insurance plan is important for everyone
Complete Life Cover
There are several term insurance plans available in the market that come with optional coverage of 100 years! These plans are known as a whole life term insurance plan and can be very beneficial to invest in.
Financial Protection and Payouts
If the insured dies, then the family of the insured will receive the sum assured from the insurer. This can be availed of in the form of a regular payout or as a lump sum benefit. This customization available in the payout can help in planning for the monthly expenditure.
You might find it interesting to note that premiums paid towards a term insurance plan and the money that one receives on death are eligible for tax exemption. This is applicable under Section 80c and Section 10 (10D) of the Income Tax Act, 1961.
What if you think that the coverage provided by your term insurance plan is not enough? In that case, you can opt for the multiple rider options that are provided in existing term insurance plans. Some popular rider options that are available in term insurance plans are:
- Critical illness cover
- Terminal illness cover
- Accidental death benefit
- Waiver of premium
- Daily hospital cash
- Personal accident cover
- Partial disability cover
- Permanent disability cover
It should be noted that these additional riders are available at an extra cost over the premium amount.
- Online Buying Facility
Buying a term insurance plan is also now easier than ever. Individuals can purchase term insurance plans in just a few clicks by visiting the official website of the insurance service provider.
- Rebate and Discounts
Many insurance providers offer high discount rates and rebates if people opt for a higher sum insured value. You can also get higher discounts if you don’t involve any agent and simply purchase the policy online.
- Flexibility in Premium Payment Terms
Most insurance providers these days offer a flexible premium payment option. Individuals can choose to pay the premium amount:
- Limited pay
- Regular pay
Types of Term Insurance Plans
The last thing that you need to learn today is regarding the different term insurance plans that are available in the market. Some of these types of term insurance plans are mentioned below.
- Standard Term Insurance Plan
This is the most common and basic type of term insurance plan. Most insurance providers offer these plans and under these plans, an individual is required to pay the premium amount regularly. This will allow the policyholder to avail of a high sum insured value.
- Term Return of Premium
In these policies, the policyholder gets all the premium paid in case one survives till the end of the policy period. This is an excellent option if one wishes to receive all their money back.
- Increasing Term Insurance Plan
An increasing term insurance plan is similar to a standard term insurance plan. However, there is an added benefit here. The life cover regularly increases by a specific percentage, which is usually 5% to 10% of the original cover. This happens annually.
- Life Stage Event Term Insurance Plan
This is a new type of term insurance plan. Under this plan, the policyholder has the option to increase the life cover at specific milestones of an individual’s life, including marriage, the birth of children, children’s graduation, and other important events. In these policies, the policyholder has the flexibility to select different milestones.