Pros of a Term Insurance Plan
The term insurance plans help to secure the family financially when you are not around. A term plan is one important type of the life insurance plans accessible in the market that should be duly bought. Well, a term plan not only provides financial security to a family in any adverse situation but it also provides tax benefits.
A term plan is just not limited to mere tax benefits but it has other benefits as well. In this article, we are going to discuss the key term insurance benefits.
What are the Different Term Insurance Benefits?
Listed below are the key term insurance benefits in detail:
- Easy to Understand: When buying the life cover, possibly you might not be able to understand certain terms about the different life insurance policies. One of the key highlights of a term plan is that it is one of the easiest insurance products to understand. As it is a pure life cover, it does not have the investment component in it. You can pay the term insurance premiums, and the insurance provider covers your life for certain duration simply and offers the term insurance benefit.
- High Sum Assured: The term plan is one of the simplest life insurance product. Another term insurance benefit is that it is cost-effective. When you compare it to various other life insurance products, the term plan premium is accessible at the premium that is not heavy on your pocket. The other term insurance benefit is that the earlier you buy the term plan, the premium will be low. Moreover, it is recommended to buy the term plan online and avail it at a special price compared to when buying offline. When buying the term insurance policy online, you can also compare the features and quotes and then take the final buying decision.
- Death Benefit Payout Options: Possibly you would have to pay the EMIs’ for the new car that you recently purchased or the personal loan or a home loan. In case of any adversity when you are not around the liability will fall on the family mostly. It is then when the different payout options of the term plan play an integral role. The dependents will get the lump sum amount in case you are not around. This lump sum amount will enable the family to manage any of the financial liabilities like the one mentioned above. Certain insurance policies also give an alternative to receive the monthly income along with a lump sum amount as a death benefit. With the monthly income, the family will find it easy to manage the expenses regularly.
- Return of Premium: The pure term plan not only provides the life cover to the nominee in case of the life insureds’ untimely death. It does not offer any benefit upon maturity. Anyone who wishes to get a maturity benefit within the term plan can receive it when you choose for the return of premium option. This alternative will require you to pay the higher premium; however, will return the complete premium paid in case you survive the policy term. The total term insurance premium sum to be returned will not include any such levies, taxes, rider premium and the modal sum paid upon the premium. You can also use an online term insurance calculator and estimate the premium of a term plan with or without the maturity benefit. This will enable you to take the right decision on the premise of the financial requirements.
- Rider Benefit Option: The term plans always come along with various rider benefit option with, which you can enhance the security of the plan. One can choose to add these rider benefits to the base term plan simply by paying an extra nominal premium amount. For instance, if you opt for waiver of premium options then your future premium sum will be waived off in case when you are diagnosed with a critical disease or suffer through dismemberment. This implies that the life cover will continue when you are unable to pay the premium sum. There are different rider benefit options and that would vary from one insurer to the other.
Why Choosing a Term Insurance Plan is Crucial?
Life is full of uncertainties and you never know what would happen next. There is always a risk of untimely death due to external factors such as a mishap/accident, disease, and so forth. Life and death are beyond anyone's’ control.
Buying a term insurance plan is important as it will minimize the financial anxiety or stress of the family that they might have to face when you are not around. Today the market is flooded with an array of plans with various term insurance benefits. While considering the term insurance benefits is vital, choose sufficient life cover on the premise of the financial liabilities and then make the final choice with the right coverage that you are looking forward to. Regardless of whether you buy the term insurance plan online or offline, understanding the plans and its features is important.
The Bottom Line
Before you factor in all the term insurance benefits, the prime objective of buying the term plan is protection and not savings. Unlike other life insurance product, the term insurance plan remains true to the objective.
In the times we are living today, having a term plan is a necessity and the need of the hour.
Written By: PolicyBazaar - Updated: 03 December 2020