Term insurance is a kind of life insurance that is purchased for a specific term. It offers a death benefit if the policyholder dies within the policy period. Term insurance is useful for people of all walks of life. Whether you are a young executive just starting out or someone who is about to retire, you can buy a term plan. The objective of term insurance is to protect your loved ones and provide them with a substantial financial relief if you die unexpectedly. In this article we discuss the importance of a term plan and why everyone needs it. Take a look.
Understanding a term insurance
Term insurance is the purest type of life insurance. Term insurance is pure life cover. If you die during the policy period, your kin gets the sum assured as a death benefit. If you outlive the plan, you do not get anything in return. You do not get anything at maturity.
Benefits of term insurance
Now let us take a look at the features and benefits of a term insurance plan.
- Cheaper for younger people: Since a term plan insures your life and assesses the risks associated with it, the cost of the plan varies for people of different age groups. A person who is young, healthy and a non-smoker can buy the plan at a lower cost as compared to a person of older age. It, therefore, is advisable for you to buy the plan as early on in life as possible and continue with it since the premiums remain fixed.
- Economic: Term plans are one of the most economic forms of life insurance. Whether you are a youngster starting out in life or you are about to retire, the term plan will help you stay protected for a small amount of money. You can use the money you save in term insurance to create other savings or invest to reap high returns.
- Flexible: Term life insurance is very flexible when it comes to policy period, coverage, payouts, and widening the policy with the help of riders. You can buy a plan for a term as small as one year or as long as 30 years. The coverage is available in various amounts too and depending on your preferences, you can opt for an ideal coverage. Additionally, you can buy riders at an extra cost and make your term plan more customised. Critical illness, waiver of premium and accidental death are some common riders available on term plans.
- Helps take care of specific obligations: In case, if something happens to the breadwinner during the policy tenure, a term plan will protect your family members against a large financial liability that you may have. If you have a home loan for Rs 50 lakh, it would be wise to buy a term plan for the same amount or higher than that. So if anything happens to you, the coverage will take care of the loan. Moreover, other financial expenses, such as child’s education, child’s marriage, household monthly expenditure can be covered.
Conclusions Term insurance plans are an excellent form of life insurance. The plans are suited for everyone, who is looking to provide financial security to their family. If you haven’t purchased a term life insurance plan yet, go right ahead and buy one today. You will end up with a great coverage to protect your family at a low price.