Everything You Need to Know About Term Insurance Plans

Life is uncertain, and you need to make the most of your life while you are alive. You leave nothing behind but the memories. Memories can be sweet, but unfortunately, that’s not enough to fulfill financial needs of your family. On the other hand, we need something that will take care of our family and financially protect them. If you are the only breadwinner, the intensity of having financial security increases.

Term Insurance Plans is one type of life insurance that offers complete risk cover and huge pay-outs to your family if you’re no more. Read on to learn more about Term Insurance Plans and how you can benefit from it.

Term Insurance

What is Term Insurance?

Term Insurance  Plan is a type of life insurance that provides an insurance cover for a fixed period of time. Though the policy comes with a fixed term, it offers maximum cover at possibly lesser premiums as compared to other life insurance policies. If the life insured survives the tenure of the policy, no benefits are offered to the policyholder.

Most of the insurance providers offer Term Insurance Policies, furthermore, can be converted into whole life insurance policies irrespective of the health condition of the life insured.

Term Insurance v/s Whole Life Insurance

While both the policies talk about life insurances, there are few points where Term Insurance differs with Whole Life Insurance.

  • There is a fixed tenure for Term Insurance, whereas, Whole Life Policies usually offer a cover till the policyholder reaches the age of 100 years.  
  • Most significant difference is about premiums. Term Insurance possesses comparatively lesser premiums than Whole Life Policies.
  • Term Insurance does not offer any additional cash value benefit, whereas Whole Life Insurance does.

Why Term Insurance?

Term Insurance offers several advantages to the life insured that can be enlisted as-

  • Financial Security of the Family: A plan that provides financial security to the dependents of the policyholder after his unfortunate demise.
  • Better Coverage at low premiums: Term plan offers higher returns in comparatively lower premiums. The policyholder has an option to choose his desired sum assured under Term Insurance Policies. Based on your lifestyle and your needs, you can opt for your coverage amount with significantly lower premiums.
  • Low Claim Rejection: Claim rejections are comparatively lower when Term Insurance is concerned.
  • Flexible to buy: Most of the insurance companies offer Term Insurances online as well as offline. You can buy your policy as per your convenience.
  • Flexibility in premium payments: Term Plans offer you several premium payment options based on your convenience. Premiums can be paid on the single, limited or regular basis. Single premium is one-time premium, whereas if you choose limited or regular pay option, you can pay premiums either monthly, quarterly, half-yearly or annually.
  • Tax Benefits: By opting for Term Insurance Policy, you are entitled to claim for tax exemptions under sections 80C and 10(10D) of the Income Tax Act.
  • Add-on Benefits: You can opt for a rider if you are looking for an add-on benefit along with your regular Term Insurance Policy. This will increase your premium amount to be paid but you may avail additional benefits.

Exclusions for Term Insurance Plans

Term Insurance covers several events, but not all. There are some exclusions to this policy, and Term Insurance Policies do not provide cover in such circumstances, like suicide attempts, death due to war, intoxications, and narcotics.

You never know what will happen and when. Term Insurance will help you make your family financially secure even after you. You don’t have to bother about your budget because you’ll get a maximum cover at reasonably low premiums.

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