No matter how much you try, you can never be prepared for many eventualities. As they say, hope for the best but prepare for the worst. Having an insurance policy is exactly that. You are prepared to deal with any emergency (medical or otherwise) when you invest in an insurance policy. If insured, god forbid, if you are involved in an accident or are diagnosed with a disease that requires medical attention, costing a lot of money, the insurance company comes in handy in easing the financial burden at such trying times.
Term Insurance Plan
Depending on their requirements, people can choose several insurance plans. A insured expires during the policy term, sometimes up to 35 years.plan is a type of life cover that provides a definite amount of coverage for a fixed period. These are extremely helpful to cater to the family’s needs in case the insured dies. The sum assured or death benefit is paid to the nominee if the
The premium for a term insurance policy is lowest compared to other life insurance policies as they don’t offer any investment option. The entire bonus is used for risk coverage, wherein if the policyholder passes away during the insured term, the nominee is paid the death benefit. However, the catch is that there is no provision for survival or maturity benefit after the policy term expires. Some plans also offer a return of the policyholder’s premiums if they survive the time.
Factors to Consider Before Investing in a Term Plan
Term insurance is one of the most basic life insurance coverage types that varies in terms and tenure from company to company. Before choosing a term insurance plan for yourself, here are some things to keep in mind –
- The reputation of the insurance company.
- What would be the ideal cover for you?
- Claim settlement ratio of various insurance companies.
- Factor in the payment of premiums as well as coverage benefits.
- Compare the terms and conditions of different insurance companies.
- Since the premium is comparatively low, if possible, opt for two-term insurance plans from different insurance companies (helps you in case of claim rejection by either of the two)
- Find out about the conditions attached while filing for a claim.
- The minimum and maximum age to take a term insurance policy are 18 & 65 years, respectively.
- Be aware of the status of your policy in case you miss premiums. Generally, a grace period of 15-30 days is provided.
- Find out the percentage deduction in premiums the insurance company pays if you surrender your policy.
Benefits of Term Insurance
- The financial security of a family in case of an unforeseen tragedy.
- Premium paid and claims received are exempt from income tax under section 80C and 10 (10D).
- Staggered payouts help provide families with a sense of security and safeguard them against liabilities.
- Reasonably priced financial safety.