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Things to Consider While Buying a Term Insurance Plan

Term insurance is a particular type of life insurance policy that offers excellent financial leverage to the immediate family of the insured in case of the death of the policyholder. It is one of the selected investment options available in the market today that offers a high sum insured in exchange for low premiums.

What is Term insurance?

A part of the life insurance portfolio, the term insurance provides comprehensive coverage for a specific period or a particular 'term.' If the policyholder passes away during the timeframe specified in the policy and the policy is active, then a certain amount of money as death benefit will be paid. Compared to permanent life insurance policies, term insurance is much more affordable. However, unlike permanent insurance policies, the term insurance does not have any cash value. In simple words, the guaranteed death payout is the only value of this policy.

List of Term Insurance Plans

Plan Name Waiver of Premium
Pru iProtect Smart Free
Click 2 Protect 3D Plus N/A
Protector Plus Plan Paid
iTerm Plan Paid
Term Plan eProtect N/A
Mera term Plan N/A
e-term Plan N/A
Life My Term +  Paid
Smart Term Plan Paid
Flexi Online Term Plan N/A
Flexi Term Plan N/A
Anytime Plan N/A
e-Term Plan Included
iLife Plan N/A
eTouch Lump sum Free
Family First Term Insurance Plan N/A
Kavach N/A
Cash Back Term Plan  N/A
Online Term Plan Plus Included
eShield N/A
Life Abhay N/A
Maha Raksha Supreme  N/A

Disclaimer: Paisawiki does not endorse, rate or recommend any particular insurer or insurance product offered by an insurer.

How to Apply for the Term Insurance Plan?

Buying term insurance plan is not a difficult task as you can do either online or offline. Although the old offline method is still operational, it is the online method that has caught the attention of all prospective customers. It is easier, safer, and fast. When you are intent on buying term insurance plan, the online option is more lucrative as there is no prospect of getting stuck in formalities. A person can visit the website of any insurance company or a common insurance platform to generate a quotation. For this, one need to put in basic biological details, choose riders for any additional benefits (premium will increase marginally if riders are chosen), choose the sum assured, and then make the required online payment for the premium. When these steps are successfully completed, the company will first send a soft copy of the purchased policy, followed by the hard copy by mail.

Features and Benefits of the Term Insurance Plan

The term plans help a person to secure his family at the lowest cost financially. It is essential to enumerate the essential features of the plan so that one can make an easy decision on buying term insurance plan.

  1. Features of the Term Insurance Plan

    Here are the key features of a term insurance policy:

    • The most spectacular component of the plan is its affordability. The premium of this plan is the cheapest compared to money back or whole life plans
    • Buying term insurance plan is very easy, and it is as simple as buying clothes or shoes online
    • When a person is buying term insurance plan with a high sum assured, the insurance companies offer a rebate thereby making these plans affordable 
    • The term plans provide flexibility in the payment of premium as it provides options of annual, semi-annual, quarterly and monthly payments.
  2. Benefits of the Term Insurance Plans

    Some of the core benefits of term insurance policies are as follows:

    • Premiums paid for term insurance plans will entail tax benefits under Section 80C. The lump-sum payments received by the nominees are also exempted from taxes
    • Some term insurance plans give out lump-sum payments when terminal illnesses like AIDS are diagnosed
    • Options like critical illness and accidental death benefit can be added to the term insurance plan 
    • The term insurance plans have longer coverage

Comparison with other plans

The term insurance plans are also a type of life insurance plan. Still, they are inherently different as term plans have no returns at all. The policyholder will be insured for a certain period, say 40 years. The premium needs to be paid annually or half-yearly or monthly as the case may be. The amount of premium will be cheaper when you buy term insurance when you are a non-smoker and buy at a young age. Unlike other life insurance plans, the money here is not recovered as the only payout here is the death benefit. The nominee of the term policy will get the sum assured only after the death of the insured. There are no maturity benefits and surrender value.

Things to consider While Buying a Term Insurance Plan

Buying a term insurance plan is a financially important decision, and it should be done very carefully. It provides a lump sum amount for your family when you are not there and thereby looks after their dreams. Here are certain things one should consider in mind while purchasing the policy.

  1. Adequate Insurance Cover

    Deciding on the insurance cover is a crucial decision and never makes the mistake of choosing a random amount. Many experts believe that you should select an amount that is 300 times your current monthly expenses

  2. Disclose All Information

    It is advisable not to lie to the insurer. If you are a smoker, then you must disclose that or else the claim can get rejected. So disclose all information, verify it, and then submit the form.

  3. Add the Nominee Name

    Do not choose any random person as your nominee. If you are married, then it is better to add your wife or your child as your nominee. The nominee is the person who will receive the money after your death.

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