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Term Insurance 1104 views April 17, 2020
When buying a term life insurance plan, you need to be aware of its basics, its features and also the benefits you stand to get from these plans. Term life insurance is a wonderful form of life insurance that has some excellent features which make it both effective, as well as unique. If you are wondering what these features are, then take a look at this article to know the top 5 factors that make the term insurance plan unique. Once you go through these points, you will understand the term insurance cover better and then you will be able to find the most appropriate cover for yourself.
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As mentioned above, term insurance has some of the most unique features. Here are the top 5 factors that make the term insurance plan unique:
One of the most unique features of term insurance is that it offers a pure and complete life cover. A term insurance plan is truly a no-frills life insurance policy. When you buy a term life insurance plan, you simply get a cover for your life. If you die within the policy period, your family receives the death benefit and the policy ends. If you outlive the policy period, there is nothing in return for you. The plan therefore is a very simple, yet extremely vital form of life insurance that every single person needs. Unlike endowment insurance or ULIP, there is no return component. This is to be noted, as you cannot combine the factors of insurance and investment with a term life insurance cover. You can only cover your life and create a financial backup for your family in case something happens to you. Life is unpredictable and you can never predict what lies in store for you. So be cautious, think about your loved ones and secure your life with a simple term insurance plan and stay protected.
In other forms of life insurance, there is a return component. This means that when the policyholder outlives the tenure of the plan, he or she receives a sum assured which is the maturity benefit. This is a reason why the premium on a regular life insurance plan is high. However, there is no return component on a term insurance plan. You pay a smaller premium which is safely used to create a life fund for you. The insurance company deducts the fees and charges related to the coverage and the remaining money is used as a life shield. If you die, your nominees get the money promised. But if you live beyond the maturity date, the insurer is not liable to pay anything back to you. Most policyholders do not mind this because the term life insurance costs are low and they don’t end up losing a huge sum of money in the process.
Gone are the days when you had to wait in long queues to enter your insurance provider’s office, fill in forms, submit a huge number of documents and complete other formalities over many days simply to get a life insurance plan! These days, the plans are all available online and you can buy them by simply clicking a few buttons. Among all other forms of life insurance, term insurance is perhaps the most widely sold form of life insurance over the internet. Almost every life insurance firm has an online presence in the form of a website and a mobile app. The term insurance plans are available online more than they are available offline. In fact, even insurance agents do not like selling the term plans to their clients as the commission earned thereby is quite low. So if you are looking to buy a term life insurance plan, it is a very good idea for you to look online and get an excellent cover at a low rate. The online plans are considerably cheaper than the offline plans because you save on the brokerage amount, you save on the processing fees and so on. Also, very importantly, buying term insurance online gives you the added benefit of being able to compare the plans. When you compare, you not only find the best plan at the best rate, you also get to choose the plan that has the best features.
As mentioned above, term insurance works in a very straightforward way. You pay the premium and keep the plan alive. The insurance provider, in return, promises to keep your life covered. If you die your family receives the sum assured and if you outlive the policy period, there is nothing to expect in return. This is the normal format of term insurance. However, there are some variants available in a term plan. You have the return of premium plans, where you get the premium back if you outlive the policy period. The premium of such a plan is marginally higher, but if you are someone who doesn’t like wasting even a small percentage of your hard-earned money, this is a good option for you. Then, you also have increasing term insurance covers. As the name suggests, these plans offer an increased sum assured as the plan progresses. Such a plan is very suitable for people who have various life responsibilities like paying for their children’s education, sponsoring their aged parents and so on. Then there is the decreasing term insurance cover which is the exact opposite of the increasing term life insurance cover. Here, the sum assured keeps decreasing as the plan progresses. This type of term insurance is usually brought to safeguard a mortgage. So, you can choose the type of term insurance you need and get the best out of the life cover you buy. Do your research and choose the best option thereafter.
And last but not least, term insurance has very few exclusions. Sadly, some forms of life insurance have a very complicated and detailed list of exclusions. This makes it difficult for the policyholders to find a comprehensive cover that helps them take care of all their needs. Term insurance is very straightforward. The clauses, terms and conditions associated with term insurance are also very uncomplicated. As a result, you do not have too many exclusions to worry about. There are some obvious exclusions such as the suicide of the policyholder, but that apart, you will hardly find any. Just be honest when buying the plan and pay the premiums on time and your family will get the claim when needed.
After you go through these points, you too will realise that term insurance indeed is unique and of great use to anyone who buys it.
As you can clearly see from the above mentioned top 5 factors that make the term insurance plan unique, term insurance is a very straightforward type of life insurance. It is, however, one of the most useful types of life insurance plan as well. And because it is so affordable, people from all walks of life can get the cover. Practically every single life insurance company in India sells term insurance and this makes it easy for the customer to choose and select the plan that is of the greatest use to him or her. If you are looking for a good life cover, definitely consider getting a term insurance plan and you will get all the benefits mentioned above.
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