What is Term Plan Insurance?
Insurance means “cover of risk” i.e., transfer of risk to insurance company by paying premium. The untainted form of insurance is Term Plan. Term plan should not be considered as investment it is an expenditure I.e. you don’t get any benefits if event for which premium has been paid don’t happen. It is similar to bike / car insurance which we pay regularly and don’t receive any benefit until anything mischief happens.
Who should take Term Plan Insurance?
Anyone whose demise affect the financial condition of the family should definitely buy the term insurance.
Why Term Plan Insurance?
- The premium for the risk covered is very less
- Your family will have financial support even though you are not around.
- Peace of mind to yourself that your family is financially stable in your absence too
- Premiums paid towards a term insurance plan qualify for a tax benefit under section 80C of the Income- tax Act, 1961.
When to buy Term Plan Insurance?
One of the factors that affect premium for the term insurance is your age so sooner you take better it is for you.
How to buy Term Plan Insurance?
The term insurance can be bough both in online and offline form i.e. you can buy it directly from the insurance provider website or through the insurance agent.
Term Plan Insurance vs. Life Insurance
Life Insurance provide benefit on the maturity of the policy. If the person is alive or dies, the payment may be guaranteed as per the promise. Below table provide few main difference between term and life insurance:-
|Points of difference||Term insurance||Life insurance|
|Coverage||Only premature death is covered||Both premature death and survival until the policy tenure are covered|
|Premiums||Very low and affordable.||Premiums are higher than term plans|
|Maturity benefit||Usually not payable (Nowadays few plan provide return of premium)||Payable under most plans|
|Death benefit||Payable||Payable under all plans|
Type Of term insurance plan
- Level Term Plan : Level term insurance is the most commonly availed plan in India. The sum assured and premiums that are payable remain fixed for the entire tenure of the policy. So, whatever premiums that you and the insurance company agree upon when you buy the plan, will stay constant for the next 10 years or 20 years. The younger you are when you buy a level term life insurance plan, the cheaper you will find the premiums to be.
- Increasing Term Plan : An increasing term insurance plan is one where the death benefits increase periodically, mostly every year, during the policy’s term. The cost of increasing term insurance plans is normally higher than that of level term plans.
- Decreasing Term Plan : Here, the sum assured payable decreases every year until either the policy pays out or the coverage period comes to an end. Premiums of decreasing term insurance plans are lower when compared with other types of term insurance.
- Term insurance with return of premium : If you opt for a return of premium term plan, the insurance company will return all the premiums that you’ve paid over the life of the policy at the end of the term.
- Group Plan : It provides an insurance cover for a group of people with a single insurance policy. This means that the entire group is covered under one policy, instead of separate policies for each member.
Riders in Term Insurance
- Accidental death benefit rider : This term rider provides additional sum assured if the life assured passes away as a result of an accident. The payment from this rider acts as a supplementary sum assured. The insurance company generally pays twice the policy’s face value.
- Accidental death and disablement benefit rider : It is for people who have riskier lifestyles, such as a dangerous job or hobby. This type of rider will increase your premium.
- Critical illness rider : The critical illness rider pays a lump sum amount if you are diagnosed with a serious ailment, which is listed in the policy. Some examples of covered critical illness include kidney failure, heart attack, stroke, cancer, heart valve surgery and paralysis. Sometimes, the policy coverage reduces by the amount that is paid to you. So, make sure to read the policy documents carefully to know what exactly will take place under this rider.
- Term rider : It is effective tools in providing additional security against the various risks facing one’s life. A policyholder must communicate his or her desire to avail a rider prior to purchasing the base term plan, as some insurance companies only allow rider additions when the cover is purchased.
- Premium waiver rider : The waiver of premium riders ensures that your policy does not lapse if you’re unable to keep up with future premium on account of a critical illness, serious injury, or disablement. The illness or injury should be such that the policyholder is unable to work in a traditional capacity. Here, the future premiums shall be waived off, but your policy will continue to remain active for the entire policy period.
- Terminal illness rider : Itoffers extra financial protection for you and your loved ones if you are diagnosed with a terminal illness. If you want to be prepared for the unexpected, these riders can give you and your family peace of mind.
Things to consider while selecting Term Insurance provider: –
- The term insurance provider should provide sum assured you need
- The premium should be affordable
- The policy should be flexible so that you can tailor made it according to your needs
- The claim process of the company should be simple
- The claim settlement ratio should be high so that the probability of the settlement of your claims increases
Term Insurance Providers in India
- Aegon Life Term Insurance
- Aegon Term Insurance
- Aviva Term Insurance
- Bajaj Allianz Term insurance
- Bharti Axa Term Insurance
- Birla Sun Life Term Insurance
- Canara Hsbc Term Insurance
- Dhfl Pramerica Term Insurance
- Edelweiss Tokio Term Insurance Co. Ltd.
- Exide Life Term Insurance
- Future Generali India Term Insurance
- HDFC Standard Term Insurance
- IDBI Federal Term Insurance
- Indiafirst Term Insurance
- Kotak Term Insurance
- LIC Term Insurance
- Max Life Term Insurance
- PNB Metlife Term Insurance
- Reliance Nippon Term Insurance
- SBI Term Insurance
- Star Union Dai Ichi Term Insurance
- Tata AIA Term Insurance
Based upon your requirement you can select your plan accordingly. At the lowest premium it gives you the benefits of life cover and peace of mind with regards to safety of your near and dear ones.
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