The Right Term Insurance Plan Can Change Your Life For Good: Basics of Term Insurance

 Term insurance refers to the purest and simplest form of life insurance. Term insurance is beneficial as it provides financial protection to the policyholders and their families at an affordable rate. It is possible to get a large amount as the sum assured or life cover with term insurance, at a relatively low premium rate. In case the policyholder dies, the insurance company is supposed to pay out the benefit amount to the nominee. A term insurance premium calculator can be used in order to calculate the premium amount that a person needs to pay for the chosen plan and life coverage benefits. 

Why buying term insurance is imperative 

There is more than one reason why a person needs to purchase term insurance. First, it provides financial security to their family. If a person is a primary earner in a family, purchasing a term plan would take care of the family’s financial needs in their absence. Another reason for purchasing a term insurance plan is that it secures the assets of the policyholder. A person may have taken a loan such as a home loan, education loan, vehicle loan, or personal loan, and it may weigh down the family financially when it comes to repaying these loans in the individual’s absence. The proceeds from term insurance are used for paying off the loans while ensuring that there is no financial burden on the family. 

These plans are required for managing risks related to one’s lifestyle. With age, people commonly start developing more lifestyle diseases. Therefore, critical illness coverage can be availed with a term insurance plan. This does not only protect the policyholder’s family in case of uncertain eventualities, but it also protects them throughout their lifetime. Critical illness benefit comes with financial security against multiple life-threatening health conditions such as heart attacks and cancer. Before purchasing term insurance online, people need to consider its features. 

Aspects worth noting 

Coming to its affordability, term insurance is believed to be among the most affordable life insurance products. The premium a person needs to pay for term plans is believed to be much lower than other life insurance policies. The minimum eligibility age for term life insurance is 18 years, and it is advisable to get a term insurance plan at an early age. In term insurance policies, coverage is provided for a specified number of years, and if an unfortunate incident occurs during this period, then the nominee will receive the sum assured in the policy. However, term insurance can only provide financial protection to a family against unfortunate eventualities, and it does not offer any return on the premium being paid. Therefore, it cannot be used by the policyholders as an investment instrument. Due to the absence of investment components, term plans are believed to be quite affordable. A person is also able to choose term insurance with a return of premium feature if they are looking for maturity benefits. When the policy matures, the policyholder would be able to get back the entire premium they have paid throughout the policy tenure. However, there are some deductions by way of GST and other costs. 

Term plan premiums can be paid as per the convenience of the policyholders. There are various premium payment frequencies to choose from, including annual, quarterly, semi-annual, and monthly premiums. Term insurance comes with a unique feature, namely the fact that the entire premium goes into securing insurance coverage. No part of the insurance coverage can be deducted for investments or any other purposes. Therefore, the policyholders are able to get substantial coverage, enough to cover both future and current expenses at pocket-friendly premiums. Parents, newly married couples, young professionals, taxpayers, self-employed people, retirees, and working women are some common customers for these plans in the country. You should do your homework before choosing the best term life insurance policy for your needs.  

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