Term insurance is a type of life insurance policy, which offers financial coverage to your family in case of your death, disease or disability. It is one of the few investment options in the market that offer a high sum assured at very low premiums.
With the frequency of accidents and diseases increasing per day, your plan of living a long life may seem far fetched. That means, if you die, your family must have a financial backup to take care of their needs. That's why investment experts in the industry suggest investing in a term insurance plan and that too at a young age. Term insurance will help your family to live a stable life even after your demise. It will provide much needed financial support to meet their daily expenses and fulfil their long-term goals as well.
It is the simplest plan of the lot. Here you will see zero change in the sum assured (through the policy) and the nominee will reap the benefits once the insured is dead.
The best part of the TROP plan is it assures maturity benefits. This policy turns out to be beneficial if the insured survives after the term of the policy.
Here the sum assured will increase every year. This plan is launched keeping in mind the growing rate of inflation.
Here the sum assured will decrease with time. This plan is usually issued by banks to recover the loan.
You will get a few rider options such as a premium waiver, accidental death cover etc. which you can avail with your term insurance policy on paying an extra premium. A brief explanation of such riders is given below-
Critical illness riders cover many illnesses that are deadly in nature. You can buy this rider if you are prone to any such illness. Before taking the rider, you can always check the additional cost and decide accordingly.
If this rider is taken, then accidental death is covered. The insurance company will offer the sum assured along with the rider benefit to the nominee of the policyholder.
Here complete cashless treatment is provided at the time of any illness.
As per this rider, all the future premiums are waived off if the policyholder is disabled, critically ill or dead.
The majority of the insurers will offer the coverage till 75 years (as it is the average age of a person). There are a few life insurance companies which provide coverage for 100 years as well. So, if you buy a term plan at an early age, you and your family can enjoy its benefits for a long time.
At times, you may not be sure about the policy. It happens when you buy term insurance in a hurry. As a result, many people make the wrong decisions. All insurance companies allow a grace period of 15-30 days to change your decision. If you are unhappy with the policy, you can return the original policy documents (in that duration) to cancel the policy.
When it comes to payment, you can always choose the premium payment mode according to your convenience. You can pay monthly, quarterly, half-yearly or annually. Many people prefer to pay the amount of term Insurance monthly as it comes at a very nominal price. Payments can be easily made online. You can do it either through NEFT, Net banking, IMPS, or wallet banking.
Yes, this is an additional benefit of investing in a term insurance plan. On buying a Term Insurance policy, you will be liable to get tax benefits as per Section 80C of the Income Tax Act, 1961.
Term Insurance plans are available at a very nominal amount. It may be as low as some hundreds or thousands per month. As compared to that, the sum assured can be in lakhs and crores (depending on the customization of policy options).
Just like every other thing in the market, term insurance comes with a (*) sign- exclusions. Let's view it.
In such cases, the legal heir of the claimant becomes the beneficiary. The legal heir can get the benefits only after attaining the age of 18. But his guardian must immediately inform the insurance company. The age criteria may depend completely on the provisions of the insurance companies or IRDA.
When a nominee dies before the policyholder, it's the responsibility of the insured to nominate other beneficiaries. This can be done either online or by informing the customer care.
Note: Once the insurance provider accepts the claim, it will release the pay-out. If the claim is rejected, the reasons for the same will be communicated to the claimant.
