Insurance is a household name in today’s time. People of all age groups, including children to old age people, are covered under life insurance policy plans offered by insurance providers. It is very important for a person during an emergency. There are different types of insurance available according to the needs of the individual.
Term Insurance policy has the lowest premium as compared to other types of life insurance. The premium is low because there is no investment component and the premium amount is used to cover the risk. No maturity benefit is available after the policy term is over. On the death of the policyholder, the survivor will get the policy amount.
What is term Insurance?
Term insurance is a life insurance policy plan that provides coverage at a fixed payout rate for a limited period. If the Life Assured dies during the policy term, the death benefit amount is payable to the nominee. It is designed to provide security to the family in case of uncertainty or death.
Benefits of term insurance policy
Term insurance has many benefits. These are as follows-
Most recommended financial product
Most of the economic advisors recommend taking a term policy. It helps in dealing with the most important risk of life, death. It provides financial security to your family in your absence; In the event of the insured’s death, the survivor gets the benefit.
The policyholder gets tax benefits under section 80C and section 10(10D) under the Income Tax Act of 1961 on premium paid.
It provides death benefits to the nominee. If the policyholder dies during the term of the policy, the benefit is provided to the survivor.
If the policy continues till the end of the policy term, the maturity benefit is provided on the number of premiums paid so far.
Term insurance also provides additional benefits such as death or disability due to critical illness or accident.
Low premium amount
If the policyholder starts term insurance early in his life then he has to pay less premium. The younger you are at the time of buying insurance, the lower will be your insurance premium.
Life insurance companies offer special discounts to non-smokers or women investors when the sum insured is very high, as there is no specific risk attached to their lives and thus give them respect.
Starting age – Minimum starting age is 18 years and the maximum starting age is 65 years.
Grace Period – 15 to 30 days depending on the type of policy
Plan Types – It provides flexibility in terms of choosing the plan. You can choose the plan based on a single life or joint life.
Premium Term Pay – Single Payer Limited Pay or Regular Pay
Age to Maturity – 25 Years / 65 Years / 75 Years for Whole Life (Varies as per policy)
Premium Amount – Based on the age of the applicant and Sum Assured.
Policy Revival – Within two years from the date of unpaid premium • Nomination – Nomination facility available
Frequency of premium payment – monthly or quarterly or half-yearly or annual payment
Policy Coverage – Maturity and Death Benefit
Sum Assured – Varies as per the different companies offered by different insurance companies.
When should you buy this plan?
It is best to buy at the age of 30. At this age, a person becomes a responsible adult. At the age of thirty, you are healthy, you have a good-paying job and your financial condition is also good. You are either planning to get married or you have recently started building a family. You are planning to buy or build a house.