6 Benefits and Features that you should be aware of before purchasing the Best Term Insurance Plan in India
Buying the best term insurance plan in India suiting an individual’s requirements can be challenging, especially for those new to the insurance sector. Consequently, to facilitate the obstacles in understanding the difference between the abundance of term insurance plans available in India, one should consider the benefits and features of each to identify the best term plan in India, which likewise serves their insurance investment prerequisites. But first, let’s understand the meaning of term life insurance.
What is Term Life Insurance?
A term insurance plan provides the policyholder’s dependents a guaranteed death benefit amount in case of the sudden demise of the policyholder. The best term plan in India is one that effectively consolidates a reasonable method for securing one’s future where the premiums are low, and one can tweak their coverage and payout modes according to their convenience.
A term plan can assist a family in paying off loans in the absence of the sole bread earner. In addition, it helps to manage unavoidable financial expenses that the enduring beneficiaries must meet without the policyholder.
Since the basics of a term plan are clear now, let us read through the features in detail that are present in the best term plan in India:
6 Feature of Term Insurance that you should know about
- Premium: It is a regular element in all India’s life insurance and term insurance plans. Premium is the policyholder’s payment made regularly to the insurance company throughout the policy tenure. It keeps up with the life cover given by the insurer and adds to the payout amount that is guaranteed to the policy nominee towards the end of the policy term.
- Term/Tenure: The policy term is the duration of coverage decided and determined between the policyholder and the insurance company. The tenure of a term insurance policy is usually longer than most life insurance policies. The span for the best term plan in India might go somewhere close to 25-30 years. The policy matures once the term gets complete.
- Policyholder: The policyholder is the individual who signs the policy papers and keeps the policy running by paying a premium regularly.
- Death benefit: It is the guaranteed payout amount promised to be paid to the policy beneficiary in case the insured individual passes away. This Sum is generally a monetary asset for the policy nominee to keep up with their financial commitments when the regular income flow gets disturbed.
- Insured: The person whose life is protected under the term plan is known as the insured. In the case of this individual, the insurance provider is liable to process the guaranteed payout sum to their reliant dependents.
- Nominee/ Beneficiary: The person assigned as the individual to get the guaranteed total compensation out in case of the insured’s demise is known as the nominee or beneficiary. These are generally spouses, children, or other close family members who might be financially dependent on the policyholder.
While the features of term insurance plans are the basic blocks whereupon most protection plans are fabricated; let’s look into the advantages one can hope to benefit from the best term plan in India:
6 Benefits of Term Insurance that you should be aware of
- Affordable Premiums: Term insurance plans are known to have affordable premiums against high Sum assured. People from all strata of society can afford to buy a term insurance plan due to its affordability. Henceforth, the individuals who are beginning with their professional stint with limited funds can pick a term insurance plan as they are perhaps the most reasonable plans accessible in India.
- Death Benefit Pay-Out: The amount paid out to the policy beneficiary as mentioned by the policyholder while buying the policy is guaranteed and given over to the policy beneficiary when the insured passes away. The payout amount can be customized into monthly income rather than a lump sum amount whenever considered fit for the beneficiaries.
- Rider Benefits: Term insurance offers flexibility to add riders for income, disability benefit, accidental death, or even critical illness. While you might think that you don’t need such riders, reconsider. With the growing health risk due to multiple diseases, it is better to be prepared rather than experience difficult obligations later. However, the riders come at an extra cost, so one should pick based on their requirements.
- Tax Benefits: The premiums paid towards term insurance and the payout amount that is given to the policy beneficiary come under tax benefit under Section 80C and 10(10D) of the Income Tax Act 1961.
- Return of Premium Term Plan: Since a traditional term insurance plan doesn’t offer any maturity benefit, one can opt for a return of premium term plan. Under this feature, all the premiums are paid back if the insured outlives the policy term.
- Fund Accumulation: Apart from life cover, term insurance also helps in building a corpus. Through the accumulated funds, one can build a financial resource for their loved ones in the future that is exempted from market risks and taxation.
The bottom line is to buy the best term insurance plan in India first; one has to gauge his or her requirements against the benefits and features of a term insurance plan. Then, if you explore further about term insurance, you can visit iiflinsurance.com and take guidance from their insurance experts to make the right buying decision.