Term Insurance

Term Insurance is a purest and simplest form of Life Insurance policy that provides the coverage for a certain period of time or a specified “term” of years. This insurance is also known as Pure Life Insurance.

This Insurance guarantees the payment of a stated death benefit to the insured’s beneficiaries if the insured person dies during that specified term. When the term expires, the policyholder can renew it for another term, convert the policy to permanent coverage or allow the policy to terminate.

Term Insurance provides the financial protection to insured’s family at the most affordable rates. The term plan provides pure life cover at a relatively low premium rate. Premiums of term life are based on a person’s age, health, and life expectancy. There is no profit or savings component in this Insurance Policy. The benefit under the Term plan is payable only if the insured person dies.

Benefits of Term Insurance Plan

Term Insurance Policies are well- suited for the people who temporarily need specific amounts of Life Insurance. This Insurance is also attractive to young people with children. All Parents obtain large amounts of coverage for reasonably low cost. There are many other benefits of Term Insurance plan which are as follows:-

§  Easy to buy

§  Higher cover at Low Cost

§  Return Of Sum Assured

§  Claim Payouts can be staggered

§  Flexibility in Premium Payments

§  Additional Riders with your plan

§  Protection Against Liabilities

§  No Brokerage for Online plans

§  Tax Benefit

§  Peace of mind

Types of Term Insurance Plan

There are different types of term life insurance plan. Choosing the best option will depend on the Individual’s circumstances. Types of Term Insurance plan are given below:-

·       Level Term Plans

Level Term plans is a simplest form of the term insurance plan where the sum assured does not change during the tenure and benefits are paid out to the nominee on the death of the insured person.

·       Increasing Term Plans

In the increasing term plan you can raise your sum assured during the plan period while keeping the premiums same.

·       Decreasing Term Plan

Decreasing Term plan is opposite of the Increasing Term plan. In the Decreasing term plan sum assured decreases year after year so as to match the decreasing insurance needs of the policyholders.

·       Convertible Term Plan

Convertible term plan is offered by some Insurance Companies in which a term insurance plan can be converting into some other plan of your choice at a future date.

·       Return of Premium Plans

In this type of Term Insurance plan, the plans have maturity benefit. The premiums are returned to the policy holder if he or she survives till the maturity of policy.

·       Term Plans with Riders

Term Plan with Riders is a unique term plan whereby an individual can buy riders like, critical illness cover, accidental death cover or disability cover etc. by paying a small additional premium. If you take a rider and opt for premium benefit then you need not to pay the future premiums in case of any eventualities for which you have taken the rider.

Buying Term Insurance Policy

Any individual who want to buy Term Insurance Policy should follow some steps before buying the Term Insurance Policy. These steps are as follows:-

§  Assess your Financial Needs

§  Estimate Term Insurance Policy Premium

§  Check the Insurer’s Claim Settlement Ratio (CSR)

§  Select Riders for Additional Coverage

§  Pay Term Insurance Premium