Term Insurance: The Most Relevant Form of Insurance Today

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What is Term Insurance?

The word ‘term’ in the expression ‘term insurance’ has a particular essence to it. Term insurance may be defined as a form of insurance that is essentially availed of for only a certain period of time. As a result, term insurance, relatively speaking, is less hard on the pocket than any other life insurance policy available in the market.

It is important to note that ‘term’ should not be deciphered as a period of relatively smaller duration. Significantly, the term for various term insurance policies may vary and may be up to as much as twenty or thirty years. Also, almost all insurance providers are equipped with availability of term insurance plans.

How to Choose the Excellent Term Plan?

As far as term insurance is concerned, it is of foremost significance to get hold the most apposite term insurance plan. Also, with the advent of digital trends in the market, online term plans have made to the scene that has facilitated a much easier and swifter approach.

However, there are certain very crucial points to keep in mind while purchasing online term insurance plans:

  • It is of utmost importance to understand the volatility of the premium. After having submitted all the germane documents for the online term insurance plan, the policyholder may be asked to undergo a medical test. In case the consequent reports reveal additional risks, the premium for the term insurance plan may rise drastically.
  • Also, it is important not to hide anything while applying for a term insurance plan. Certain facts such as addiction to tobacco should be revealed unfalteringly. If the hidden facts are somehow caught, the application may be rejected outright.
  • Another important thing to keep in mind is the aspect of a lapsed status. It is vital not miss any premium payments. It is important to remember the relevant dates and deadlines for clearing the premium or else the policyholder is likely to miss renewing the term insurance plan. It must be kept in mind that in this case there is no insuring agent as such to keep reminding the policyholder.

Is There Any Need to Buy a Term Insurance Plan?

  • First and foremost, term insurance is extremely helpful in order to maintain the most elementary aspect, financial security. Term insurance plans are one of the foremost ways of upping the quantity of financial security.
  • Also, term plans are essentially meant for the common mass. Term plans evidently generate much higher returns without the added menace of having to supervise the investment funds. Regular plans, it is seen, spawn over cent percent returns on the date of maturity.
  • Another very endearing aspect of a term plan is that the premium is immensely affordable. Relatively speaking, one may cling to the selfsame features with term plan as offered by other insurance policies and with much lesser premium.
  • Additionally, term plans are extremely flexible. There are cases when policyholders are spared the added headache of undergoing through medical tests if the total sum assured is Rs 50 lakhs or less.
  • Apart from having a considerable degree of flexibility, term plans also have the advantage of relatively low brokerage. If the policyholder opts for a term insurance plan, he or she would have to pay the least for the broker commission. Additionally, in case of an online term insurance plan, there is no question of a broker fee anyway.
  • And the most glaring aspect of term insurance plans is the merit of tax benefits. So far as the premiums paid to the plan are concerned, they are eligible for tax benefits under Section 80C of the Income Tax Act of India.

What Are the Types of Insurance Plans?

The following are the types of the most common term insurance plans:

Regular Term Insurance Plans: A regular term plan, generally speaking, provides coverage against a specific string of convention/regular risks. Also, the regular term insurance plan offers no benefits upon maturity. Additionally, the premium payments may be shelled out in periods or paid at once.

Group Term Insurance Plans: These are generally offered to groups of individuals belonging to a particular organization. The group term insurance plan, relatively speaking, is less expensive than the individual term insurance plan. However, the sole demerit of the group term plan is that the benefits of the coverage expire once the employment or the membership comes to end.

Convertible Term Insurance Plan: At the most rudimentary stratum, a convertible plan allows the concerned policyholder to ‘convert’ his or her policy into a permanent one in the course of the tenure. It can be said that the convertible type is one of the more popular term insurance plans currently doing the rounds in the market.

What Are the Eligibility Criteria for a Term Plan?

The following are the criteria to be met while buying a term insurance plan:

  • The minimum age of the policyholder should be eighteen years.
  • The maximum limit counts on the minimum tenure of the policy.
  • The maximum age at the time of maturity can be 79 years.
  • The sum assured will be factored in while considering the eligibility.

At PolicyX.com, you can compare different insurance companies to buy best and affordable term insurance plan online. 

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About Deepti Verma 232 Articles
Deepti Verma is a Political/Social Writer with an opinion on almost everything! Follow @universal_rover