Term Insurance, often called the purest form of life insurance, is the most efficient and reliable way for you to safeguard your family’s future. It is a decision that needs to be taken with extreme caution and research. Getting the best possible term insurance policy ensures that you have peace of mind and your family stays protected in case of your untimely demise. With the whole range of term insurance options in the market, it can be confusing to zero down on the best plan that works for you and your family.
There are a number of factors that can help determine the best term insurance plan for you. In this article, we’ll take a look at the types of term plans available and the factors you should keep in mind to choose the plan that covers all your financial needs.
A level term plan is a basic form of term plan where the sum assured does not change during the full duration of the policy term. Under a level term insurance plan, the sum assured is paid to the beneficiaries in case of the death of the policyholder while the plan is still active. This term plan is best for individuals looking for a fixed cover at affordable premiums.
Generally, the premiums on term insurance plans are not returned to the policyholders. However, a ‘Return of Premium’ term plan is a type of plan where the premiums are returned to the policyholder at the end of the policy period as maturity benefits. As a result, the premium rates on ‘Return of Premium’ term plans are higher than other types of term plans. This plan is ideal for individuals who want their money back after the policy term is finished.
An increasing term plan is a type of term plan where the sum assured increases every year, whereas the premiums remain the same. This type of insurance also has higher premium rates as compared to other term plans as the sum assured increases over time. It is best for people who need a higher cover as time passes.
Decreasing term plans are the opposite of increasing term plans, where the sum assured gradually decreases every year. Depending on the policy, the premium prices for a decreasing term plan may remain the same or go down over time. This term plan is ideal for people who are financially secure and have a stable source of income, as they’ll need lower financial cover in the future.
A convertible term plan is a special type of plan that allows the policyholder to convert their term plan into other forms of insurance plans in the future, such as a full life insurance plan. This plan is ideal for people who are looking for a flexible plan that can be changed as per their needs in the future.
Now that you are aware of the different types of term plans available in the market, you should also know about the various factors that you need to consider when buying one. The following factors will be highly helpful for you to determine the best term insurance plan for you.
One of the primary reasons why people tend to opt for term insurance plans is that they prove to be a far more cost-effective insurance option than permanent life insurance plans. You can compare advantages and premiums from different term plans to determine what works best for you. You can also use a term insurance premium calculator to get an approximate quote.
At the time of buying a term plan, you will have the option to choose additional riders such as critical illness rider, accidental death cover, total disability cover, etc. These additional riders can provide enhanced cover at an affordable price. You can go through all the available riders and select the ones that you may need.
You should always buy your term insurance plan from a reputed insurance provider. Now that insurance can easily be bought online, you need to buy it from well-known and legitimate sources to ensure that your beneficiaries do not face any problems at the time of claim settlement. A good idea is to choose a reputed insurance provider that has a good claim settlement ratio.
The main thing you will need to keep in mind while buying term insurance is the amount of financial cover you need. You will need to evaluate the financial needs of your family in your absence and determine the coverage amount you will need. It is a good idea to opt for a plan with higher cover to ensure that your family will get the best possible protection in case of your untimely death.
Choosing which term insurance plan is best for you can be difficult, given the multitude of options available in the market. The above factors should help you identify and choose a suitable term policy. In case you are looking to buy term insurance, you should check out the various term insurance plans available at Bajaj Markets and choose one that fulfils your needs.
Pure term life insurance is the simplest form of life insurance where the beneficiary will receive the sum assured as a death benefit in case of the policyholder’s death while the term policy is active.
If you do not yet have any life insurance policy in place, a term insurance plan is the best way to secure your family’s financial future with affordable premiums.
The main disadvantage of term insurance is the fact that premiums paid are not returned to the policyholder at the end of the policy. If you are looking for a plan where you can get your premiums back, you can opt for ‘Return of Premium Term Plan’.
Everyone has different needs and requirements. You should figure out how much cover and additional riders you need and then choose a term plan from a reputed insurance company that fits your budget while fulfilling all your needs.