Term insurance happens to be a life insurance product. It is offered by insurance companies, and it provides financial coverage to the policy holder and/or their family member for a specific pre-determined time period. In case of the death of the insured individual covered under the policy, the company is then liable to pay death benefits to the beneficiary, who is, most of the times, another family member. These benefits can be lump-sum, monthly, or both. The mode of payment of benefits is obviously pre-determined.
Term insurance is the cheapest and most economical form of life insurance. Term insurances offered by insurance companies today are very economical, when you take in to account the coverage that they offer. You can use a premium calculator to easily find how much you should pay monthly to get insurance.
Why should one opt for Term insurance?
It is not good to be myopic when it comes to financial investments. One should think of the future as well, not just their own future, but the future of their loved ones too. Choosing an apt term insurance would save a lot of hassle and pain in the future. It is but an investment in the future to save you from troubles.
Term insurance will be a massive support for your family in case misfortune knocks the door. It is even more important for you to get term insurance if you are the sole earning member of your family.
Benefits of opting for Term Plans
- One’s loved ones gets the entire sum in the case of a death.
- Check and pay all liabilities
- Term insurance can be calculated using the premium calculator. It manages your family in the case of you falling ill or a disability.
- Provides a separate income if there is loss of income due to illness or handicap. This can be calculated using the premium calculator.
Term Insurance Plans-Features
Listed below are a few key features of the various term insurance plans that are offered in India:
Tax Concessions – They offer tax concessions. You can get benefits under Sections 80C and 10 (10D) of the Indian Income Tax Act.
- The shortest policy duration is five years, with the longest oscillating between 25 years and one’s entire life span, depending on how the premiums are paid, which can be calculated using the premium calculator.
- Entry Age- Eighteen years is the minimum age for eligibility for insurance plans. The maximum age is set at 65 years, with a few additional benefits. Opting for a great term plan earlier in your life will lead to lesser premiums, as premiums increase with age. You may calculate these premiums, in detail, using the premium calculator.
- Maturity Age- Most of the term plans offered in our country cover the policyholder till Seventy years of age. Term plans having a higher maturity age will most likely charge higher premium rates, as can be calculated using the premium calculator. Another factor for these higher premiums is the increasing risk with increasing age.
- Survival Benefits – Traditional standard term plans have no survival benefits. But owing to the request from customers, many companies have now started term plans with benefits upon survival. Such plans refund the amount at the end of the plan tenure if the insured person is still alive and he survives the period.
- Death Benefits- Up on the death of the insured during the term, the pre-decided nominee will be given the assigned benefit and compensation. This benefit is previously decided, when the plan is made. This Bereavement benefit may be variable and that depends on the variable components offered by the plan. Variable death benefits generally have higher premiums, as can be calculated using the premium calculator.
- Maturity Benefits- These plans do not offer any form of survival or maturity benefits.
- Rider- Additional Benefits- Additional advantages, like crucial illness or accidental death or accidental disability are also offered with term insurances. These benefits can be added by offering an additional amount on the premiums. This amount can be calculated using the premium calculator.