Compare & Buy Best Term Insurance Plan

Introduction

Life is unpredictable, and one event can change your life overnight and exhaust all your savings. Also, the ever-rising inflation, changing lifestyles and rising cases of critical illnesses, your plans and financial goals necessitate protection from all such twists & turns of life. The recent Covid-19 pandemic has further stressed the need for insurance that acts as a financial backup in emergencies. To be rather forthright, if you are no longer around to take care of your family's financial needs, a term plan can safeguard your family's financial future in your absence.

A term insurance plan is a policy that is a pure and straightforward risk cover form of life insurance. It provides financial protection against a fixed premium paid for a defined/specified term. A large amount of life cover or sum assured is affordable, and relatively low premiums are available with term insurance. You can get back all premiums paid, on survival till maturity with the Return of Premium option. Most notably, in case of your unfortunate death during the policy term, your family/nominee receives the death benefits and can live a comfortable and dignified life without any financial hurdles.

How Does it Work?

• The Purchase -

  When purchasing a term insurance policy, the insurance company decides the premiums based on the face value of the policy - the payout amount, your age, gender, and health. Some insurance companies might also inquire if you are on any prescribed medications, smoking/ drinking status, occupation, hobbies, driving record, and family history. Some insurance companies require your medical examination as well.

• The Renewal -

  You can renew a term policy before it expires; however, at the time of renewal, the premium will be calculated taking your current age into consideration.

• The Payouts -

  In case of your unfortunate death during the policy term, the insurance company pays the policy face value to your family/ nominee. But if the policy term expires before you die, there will be no payouts for your family. 

Reasons to Buy this Plan

Reasons to buy a term insurance plan are:

• Affordability -

  Term insurance is an affordable form of life insurance with low premiums. Thus, it is relatively cheap and easy on the pocket. You can, therefore, secure the financial future of your loved ones at a nominal price.

• Financial Security -

  The payout (money) from a term insurance plan can act as an income substitute and help your family lead a dignified life in case of your untimely death. The term plans are significant when it comes to long-term financial planning.

• Repayment of Liabilities -

  If you have a personal loan or home loan, you can buy term insurance to ensure that your family can repay these liabilities quickly, even in your absence.

• Additional benefits -

  The scope of your term insurance plan can be enhanced with several riders. Benefits such as the critical illness benefit cover you against expensive and life-threatening ailments; the accidental death benefit offers your family a sum of money in case of death due to an accident. Further, the premium waiver in permanent disability benefit waives off all future premiums if you have a permanent disability.

Key Features

The features of a term insurance policy are:

• Cost Effectiveness-

  It is the most affordable life insurance product and offers optimum coverage. Term insurance with various rider benefits is also relatively inexpensive and considered one of the best financial solutions to protect your family’s future.

• Long-term Security -

  The best term insurance plan with a longer policy duration ensures that your family stays secure from any financial liability. You can buy a term life insurance cover for up to 50 years.

• Online process-

  You can buy term insurance online at any time and anywhere by visiting the website of your chosen insurer. 

Benefits

A term policy provides several benefits such as-

• Death Benefits -

  In case of your tragic death during the policy term, your family members will obtain a death benefit. 

• Survival or Maturity Benefit -

  A typical/standard term insurance plan does not provide any maturity or survival benefit. But with a term policy with the ‘Return of Premium’ rider, the insurer repays the premiums paid if you outlive/survive the term insurance duration as a maturity/survival benefit.

• Tax Benefits -

  Under the old taxation regime, the premiums paid towards the policy can be claimed for tax deductions under Section 80C –IT Act, 1961. Also, the death/survival benefits are also tax-free.

• Rider Benefits -

  You can opt for several rider benefits in your term insurance plan at a nominal price over and above your basic term insurance premium. You can choose Critical Illness Rider, Accidental Death Benefit, Return of Premium, Waiver of Premium with your basic term plan. 

Inclusions

A term insurance includes-

• Death due to a medical condition/natural death -

  The term insurance plan covers health-related death or natural death due to diseases or a medical condition that ultimately results in the policy's death and the nominee will be paid the sum assured of the term plan/policy.

• Death due to accident -

  Accidental deaths are covered in a term insurance plan. Also, some term insurance plans have added riders, which offer an additional sum assured on death due to an accident. 

Exclusions

Term insurance has specific exclusions which vary from insurer to insurer, such as death due to -

• Suicide or self-inflicting injuries

• Sexually transmitted diseases such as HIV/AIDS

• Any pre-existing health conditions

• Involvement in illegal activities

• Influence of intoxicants -alcohol & drugs

• Participation in bike /car racing, bungee jumping, trekking, hiking, water sports, etc.

• Pregnancy and childbirth

Conclusion

Purchasing a term life insurance policy as early in life as possible is always advisable, as you can get the desired cover at a nominal price. Whether you are single or married, planning to start a family or approaching retirement - a term insurance policy enables you to secure your family's financial future in your absence. It's never too late, so proceed to buy the best term insurance plan for you, today!

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