Benefits Of Term Insurance
Benefits of Term Insurance Plans You Must Know
Life is inherently unpredictable, underscoring the importance of maintaining financial preparedness for any eventuality. Insurance plans play a pivotal role in safeguarding against such uncertainties, providing vital protection for your family in times of need. Benefits of term insurance plans offer a predetermined sum assured to the designated nominee(s) in the unfortunate event of the policyholder's demise before the term's maturity.
While traditional term plans typically do not yield maturity benefits for surviving policyholders, they remain a cornerstone of sound financial planning due to their cost-effectiveness. As integral components of a robust financial portfolio, term insurance plans offer essential coverage at affordable premiums, ensuring peace of mind and security for your loved ones in the face of life's unforeseen challenges.
Benefits of term insurance
1. Affordable premiums
Term policies are pure life insurance products, so they offer high coverage at pocket-friendly prices. A healthy 25-year-old man who doesn’t smoke can get life coverage of Rs. 1 crore for a 30-year tenure at less than Rs. 800 per month.
2. Return of Premium options
Insurance companies today offer Return of Premium term plans that provide a small maturity benefit. If the policyholder survives the tenure, they receive an amount equivalent to all premiums paid at maturity.
3. Death benefits
Term plans are unique in the sense that these plans guarantee the payment of benefits as they entitle the policy holder's nominee(s) to receive the sum assured in the event of the policy holder's demise during the plan term. Therefore, a term insurance plan covers the basic requirement of financial security and safety of the future requirements of your loved ones.
Benefits of term insurance
4. Additional riders
Generally, term insurance plans come with additional riders that can be purchased optionally and offer extracoverage together with the main plan benefits that exist already. This means that the policy holder can purchase additional coverage for factors like critical illness, accidental disability etc. This enhances the existing benefits of the plan.
5. Premium-payment frequency
Generally, the insurers offering term plans offer quite flexible premium-payment terms. This means that the policy holder can pay the premium in a frequency chosen as per her/his convenience. The frequency can be monthly, bi-annual, annual or even a one-time lump sum payment.
6. Flexibility in cover
The coverage, when chosen after due deliberation and after considering all the parameters like financial goals, payable premiums, frequency of payment etc, should be sufficient for meeting all the desired aspirations for you and your family. In one's absence, the loved ones must be able to maintain the lifestyle that covers their financial future. Thus, it is essential that the plan that you choose offers specific benefits.