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Term Insurance Plan
Term insurance plan is purely Life insurance. The superior reason is even though the premium rate is low you can get a large amount of life cover. Human life has many risks some risks even result in a loss of life. In that case, term insurance gives financial security to your family at a reasonable rate by transferring the risks to an insurance company.
In a term insurance plan, the person takes insurance on his/her own life. A ceratin tenure and sum assured are picked for the insurance policy by paying an affordable premium. Suppose the insured person died within the tenure of the plan. Then the Insurance company will pay the sum assured to the nominee.
How it works.
First, the person needs to choose the policy term and the coverage amount. The premium for the selected policy depends upon the factors like age, health, term, and sum assured. For the entire policy term, this premium remains the same. After the purchase of a policy if the policyholder demise within the policy term then the Insurance company will pay the coverage amount to the nominee.
Suppose if the policyholder is alive at end of the policy term, the insurance company will not provide any financial payment since the coverage is over. On the other hand, if the policy includes survival benefits in the initial phase, then the policyholder will receive an amount when the policy term is matured. Even if the policyholder needs renewal for his term plan, this is possible only if he is below the maximum age defined by the insurer. In case of that, a premium is calculated for the new term.
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.Consider Mr. X is purchasing a term insurance plan at the age of 25yr for 50 lakhs. Assume his premium is Rs 4000 annually for the next 30 years. so the term insurance plan covers up to his 55yrs age. If he demised before his 55 years his nominee will receive the sum assured. If Mr. X is alive after his policy term he will not receive any financial payment from the Insurance company.
Reason to buy Term Insurance Plan.
- Term insurance plans offer high insurance coverage at an affordable premium. For a 25-year-old healthy male, the 1 crore life cover of 21 years is approximately Rs 600 per month.
- Term insurance provides tax benefits for the premium paid under 80C, critical illness premium paid under 80D. And if any unfortunate incident happens it provides tax benefits to the amount your nominee receives.
- By assigning an accidental death benefit along with your term plan, additional financial protection is given to your family.
- New-age term insurance plans provide coverage to critical illnesses like heart attack, kidney failure, and cancer, etc, if the respective additional premium is paid.
- In case of permanent disability because of an accident. The insurance company waives the rest of the premium in the future. And term plan continues even though the premium is not paid.
Features of term Insurance plan.
- The premiums are very low because it covers only the risk of death
- No limit is on the coverage you can avail.
- In case of any unfortunate event of death, only the sum assured is paid no bonus is declared on term plans.
- The riders can help you in increasing the benefit of the policy.
- There is no surrender value in term plans. Suppose if you stop paying the premium the policy would lapse and you will not avail of any benefits.
Term Insurance plan – a must need.
A term insurance plan is a must need if your family financially depends on you. Because in case of any unfortunate incident happens the plan provides financial protection to your family. The term plan premium is very low when compared with other plans.
