News

Term Insurance: An In-depth Guide on cheap Life Insurance 2024

Submitted by admin on October 24th, 2024

Term Insurance is life insurance, which not only provides definite financial security to the family members of the insured but also offers coverage over a decent premium for a certain time period. If the insured dies within the tenure of the policy, then the nominee is entitled to the death benefit. In lieu of the premium paid, the policyholder receives the financial coverage of the life of the insured. Term insurance features many; therefore, before finding the Best Term Insurance Policy, one should observe the features of term insurance to understand it well, as mentioned below.

Given below are the salient features of Term Insurance:

Extensive Cover under Term Insurance Plan Term insurance plan includes:

1. Massive life cover amount
2. Accident death and disability cover

iii.  Cover for major illnesses iv. Longer tenure of the policy, i.e., policy providing coverage for a longer duration

iv.  Low premium rates Large Life Cover Amount

It is generally considered to provide coverage for all expenses of the family members that might arise, including:

a)  Day to day living expenditures

b)  Existing loans

1. c) Cost of important objectives Cover for Accidental Death & Disability

It is a critically important cover since:

1. a) Disability may limit earning ability
2. b) You might have to modify the residence for the disability

c)Homicide by accident may lead to increase in the actual and legal cost .

Critical Illness Cover It is a life-threatening illness which may prove fatal even under the best treatment, including cancer and heart failure, etc .

This cover will protect:

a)Household cost

1. b) Reimbursement of cost of medication More Extended Policy Term – Entry Age In the case of a term policy, one can purchase as early as 18 years of age. Plus, some policy even allows purchase all the way up to 99 years.

More Extended Policy Term – Entry Age

Term insurance can be purchased when a person is 18 years old. And some policies permit it to continue up to the age of 99 years.

Low Premium Cost

There is no investment premium, as there is no maturity benefit in the case of a term plan. Since only protection cost is included as a premium, it is pretty low and can be easily included in your monthly budget.

Pay-Out Options Convenient

Though the word plan seems to be quite a nominal thing, it does really gain importance in case the fate of the policyholder denies his will, and the nominees are in dire need of getting the amount. Premium Waiver Option

This benefit eliminates the risk of disability, which would otherwise see the life cover lapse without the policyholder paying any additional premium. Permanent disability claim and on-set of death claim/expiry will help waive premium for continuing the cover until it runs up to death claim or its expiry.

Tax Savings

The term insurance premium paid is also eligible for Tax Benefits of Term Insurance u/s 80C of the Income Tax Act, thereby reducing tax liabilities.

Another Important Feature – Flexibility in Premium Payment

A good term plan will ensure making the payment easier, i.e., with the help of iSelect Smart360 Term Plan, one can opt to pay the premium amount towards their life cover in the mentioned manner:

1. Single Pay Here, the premium is to be paid for the whole 20 to 30-year policy in one single instalment.
2. Low Pay The premium is to be paid for the whole policy within a few years; let us say pay a 25-year policy premium within 5 years.

iii. Annual Pay Here, it offers the lowest amount towards the premium payment, which can extend to the entire period of the policy.

Types of Term Plan Given below are the different types of Term Plan:

1. a) Level Term Plan In this plan

The sum insured is the same for the whole tenure. However, there are some plans that provide increased cover based upon various milestone events of life such as marriage, buying a home, birth of a child, etc.

1. b) Increasing Term Insurance Plan

In this kind of plan, automatically the coverage keeps on increasing. This department states that you do not require increasing the coverage of your plan with the rise in your lifestyle because this plan will take care of the same.

1. c) Decreasing Term Insurance Plan

This implies that the coverage of the term plan will continue to decrease with passing time. This plan typically covers the loan in case there is an unfortunate death. .d) Term Insurance with Return of Premium

Here, at the time of death of the policyholder, the premium paid during the tenure of the plan gets disbursed if you survive, at the time of expiry of the policy.

How Does a Term Insurance Plan Work?

Let’s know about the important details about how a term plan works: When one invests in a term plan, he has to agree on paying a premium to the insurer. The premium amount can be either paid as a lump sum amount or as periodic payments.

According to the plan that may be chosen, they can be monthly, quarterly, semiannual, or annual. Protective life will be the coverage. The insurer will have to make a payment of the sum assured in case the policyholder dies to the beneficiaries of the insured. Incase the policyholder survives during the tenure, the insurance provider will not pay any benefits.

Why Term Insurance?

1. a) Give Your Loved Ones Financial Security

When you are the lone bread earner for your family, then term insurance will give them financial security. Moreover, it will help them fulfill their financial needs even after the death of the policyholder.

1. b) Reduce Lifestyle Risk Factors

As with the growing age, the risk of death also increases. Also, it increases with certain lifestyle-related changes. It will cover all the risks against an extra premium amount.

1. c) Pay Outstanding Debt in your Absence

In case of an unfortunate demise and there were some outstanding dues, the term plan also provides a certain amount, in this case, from the sum assured.

1. d) Assist your Family to Achieve Key Savings Objectives when You are Not Around

Financial goals are rather very vital to maintain well-being. The term insurance coverage ensures the successful implementation of financial goals, along with adding long-term security. Term insurance plans give financial security to the family members of policyholders, which easily could accomplish financial objectives. Also, it’s pretty important to know what term insurance plans work with, what features and benefits they offer and accordingly make an informed decision.