Plan Your Future Well with Term Insurance

Insurance that provides coverage for a specific time period or “term” is Term Insurance. If the insured dies within the term or while the policy is still active, the benefit is paid by the insurer. It’s also much less expensive as compared to other life insurance plans.

Term insurance plans are often overlooked while choosing an insurance plan. This is usually because of the false belief that policy does not provide maturity benefits as compared to the other insurance policies. Term insurance plan provides you with numerous benefits.

• Term insurance comes with premiums that are easily affordable.
• The benefit received is so much higher than the sum invested to ensure financial security.
• Some term plans like Term Return of Premium Plans (TROPs), do provide you with survival benefits.
• Term plans are also known for being flexible with premiums; it can either be paid regularly or a single payment, half-yearly, quarterly or yearly.
• These policies also provide you with an opportunity for lower brokerage. The brokerage is often calculated by the amount of the premiums. Now since the premium payable is really low, it provides an opportunity for the insured to cut down on costs there.
• It provides the nominee with sufficient coverage at low premium rates. Sufficient cover can be 10 times more than the annual income of the insured.
• The tax benefit has to be the most popular benefit offered by term insurance. The premiums and the death benefit which is paid are exempted from tax under section 80C of the Income Tax Act, 1961.

Common Types of Term Insurance

Some of the different types of term insurance available are:

Level Term Policy: Most of the term policies are known as level term policies. A level term policy is not permanent, but the death benefit and the premium rates are stable for the specified period of time. It is an inexpensive form but it does expire like normal term insurance.

Convertible or Renewable Term Policy: The insured always wants to renew the term policy unless something changes drastically; renewable term policy provides the policyholder with the option of extending coverage term for a term without having to undergo the procedures again. The option of convertibility provides the insured with the option of converting the policy into permanent life insurance.

Term Plans with Riders: This term plan comes with rider options such as critical illness, or accidental death cover which is available to purchase along with the normal term plan.