Today, life is so uncertain that we don’t know about our future. But, still, as human nature, we try to secure all big to a small moment of happiness and want to give our loved ones the best life. But, sometimes, all ourplanning is ruined by the uncertainties of life. Being short-sighted will lead you to nowhere. Who will take care of your responsibilities and liabilities in your absence? Term insurance is the best way to secure your family’s future. They will be financially secured even when you are not there. Term Insurance is one of the most simple and cheap insurance policy available in the insurance market. Term insurance offers a financial benefit to the near dear ones and family of the insured in any misfortunate event like the untimely death of the policyholder. The benefit of the plan is offered or transferred to the nominee of the term insurance policy. A term insurance plan is the simplest forms of financial protection that can help your family meet its financial needs in your absence. Term plans offer a peace of mind with affordable premiums and a life cover that you can choose depending on your family’s lifestyle and financial needs. Without any lengthy paperwork, some of these term plans can also be bought online within a few clicks.
You should be well aware of terms and conditions of term insurance policy. While buying a term insurance policy, the buyer can choose the period or term of the insurance policy depending on his/her age. The eligibility for term insurance plan suits young people the best. The minimum age of entry in term is 18 years, with a maximum age limit of 65 years and these plans come with optional add-on benefits. The minimum policy term is 5 years, with the maximum varying from 25 years to the whole lifespan for equated monthly premium payments. For single premium payment policies, the policy term is 5 to 15 years. The insurers provide various options for payment for the term plan. Term insurance companies even cover permanent disability or partial disability when the regular flow of income is disrupted in the life of the policyholder. Insured can choose to get a lump-sum amount or a combination of lump-sum and monthly amount as per your requirement. Term plans that have a higher maturity age may also charge a higher premium rate as they offer a term insurance cover against life risks for a longer tenure. Also, the risks increase with age and this is reflected in the premium amount.
Types of Term Insurance
Term insurance plans offer you coverage for a fixed term. This indicates that you can take term insurance for a fixed duration wherein your family is financially protected. Depending on the type of term insurance plan one enjoy various benefit like the death benefit which may stay the same over the whole tenure of the plan like in standard term plans, decrease in decreasing term plans or increase during increasing term plans. There isa wide range of term insurance plans existing in the market that one can customize as per the requirement of the policy cover. Term insurance can be classified into following types:
1.- Regular Term Insurance Plans
This is the most basic form of the life insurance protection and it offers low premium amount and high sum assured. Under this plan, the policyholder can receive maximum benefits from the plan in a cost-effective manner. Premium payments can be made periodically or they can be paid at once as a single payment.
2.- Group Term Insurance Plans
Group term plans offer more or less the same benefits as individual plans, but it is less expensive. These are policies offered to a group of individuals by an employing organization, association, or trusts and societies. But, this plan is only valid till you have employment or membership with the organization.
3.- Convertible Term Insurance Plans
A convertible term plan allows the policyholder to convert his policy into a permanent one during the policy tenure that means the convertible policy provides the policyholder the ability to switch from term insurance for a specific duration to whole life insurance. The convertible insurance plan will have higher premiums, owing to the built-in cost attributed to the conversion facility.
4.- Joint Term Insurance Plans
Joint term Insurance Plan is a comprehensive financial protection solution with multiple benefits for couples. This is preferred by the policyholders who want to ensure his/her spouse under the same term insurance policy. Joint-life term insurance plans offer tax benefits on premiums paid and payouts received, under Section 80C and 10(10D) respectively and some of the joint term insurance plan also has in-built terminal illness coverage.
Hence, you can choose to enjoy the coverage of best term insurance that suits you as per your requirement, reliability, cost, claim settlement ratio and etc.