Term Insurance
Details about Term Insurance Meaning
- What are the features of a term insurance plan is?
- how the term insurance plan is different from the rest of the life insurance plans? whether to take a term plan or not?
- What are the benefits of taking term insurance?
- and how it saves tax?
You will also see what to keep in mind while taking a term insurance plan.
Read our article on insurance in detail to know more about insurance and other aspects.
Details about Term Insurance, Its meaning, rules and features.
Do I need Term Insurance?
In today's time, when so many insurance companies are pushing so hard to sell their insurance plans, it becomes difficult for themselves to choose the right life insurance plan.
Knowing about different life insurance plans that meet my needs, you should buy a life insurance plan for yourself. Earlier we told you about different types of life insurance as well as endowment plans.
Today we will tell you in detail about the Term Insurance plan.
Term Insurance Meaning
Term Insurance - Term Insurance Plan is a type of life insurance and provides life cover for a defined period of time and if the insured dies during the period of the insurance policy, the death benefit is payable to the nominee.
An insurance in which the insurance company pays Sum Assured in case of death of the insured during the insurance period in lieu of payment of premium regularly is called Term Insurance.
Term Insurance is Financial Security
Term Insurance plan is specifically designed to protect the needs of the insured's family in case of death or uncertainty. It provides a fixed amount of coverage for a specified time period. Simply put, the duration of the insurance and the amount of insurance are determined while taking the Term Insurance plan. Read here how to claim life insurance on our site.
Features of Term Insurance
In Term Insurance plan, if the policyholder dies during the insurance period, the death benefit is given to the designated person. premiums of Term Insurance are the lowest of all types of life insurance policies.
Premiums in this policy are low because there is no component of any investment in it and the full premium goes to cover the risk. On the contrary, in endowment plans and money back plans, a part of the premium goes into the risk cover of life insurance and the rest is invested.
Term Insurance plan does not get any maturity benefit on survival after the expiry of the policy period.
Pradhan Mantri Jeevan Jyoti Bima Yojana (For Indian's) is also a cheap ergonomic term insurance scheme, you can also pay attention to this option while choosing your term plan. Read about health insurance here on our site.
List of Term insurance Plans
There are some major Term insurance Plans available in India
- LIC e Term
- Aditya Birla Life Shield Plan
- Bajaj Allianz Smart Protect Goal
- Canara HSBC iSelect+
- Exide Life Smart
- HDFC Click 2 Protect Plus
- Kotak eTerm
- Max Life Smart
- SBI Life eShield
Tax Benefit on Term Insurance
The premium paid for all life insurance policies has been exempted from tax under Section 80C of the Income Tax Act, 1961.
How to take Term Insurance
Term insurance can be taken online or offline. If you take Term Insurance online, you can apply for online term insurance by visiting the site of the insurance company from which you want to take insurance. You can park with an insurance agent to take offline insurance.
Types of Term Insurance Plans
There are several term insurance plans available for various insurance companies in India. All these companies provide each term policies online and offline with their own features. To understand these plans, we need to know them in detail:
general Term Insurance Plan
In the general term insurance plan, the insured person gets cover for various risks in lieu of payment of a fixed term life insurance premium amount. That term plan is generally considered to be the best term insurance policy that charges an annual premium for annual cover.
Term Return of Premium Plans
Term Return of Premium Plans are term insurance plans in which the insured person gets the payment of premium paid for cover back at the end of the policy period. These term plans are becoming increasingly popular as the policyholder gets the money invested in the term insurance policy at the end of the policy period.
Group Term Insurance Plans
Group Term Insurance Plans are specifically designed for business or companies and these plans provide term plan insurance cover for all members of the group. These policies not only provide all the benefits given in the personal term insurance policy but also provide cover or many other additional benefits of a variety of diseases which are not usually included in personal term insurance. Most of these term plans are available offline as each policy is generally changed to suit the needs of the policy-taking group.
Joint Life Term Insurance Plans
Joint Life Term Insurance Plans is cheaper than buying two different insurance plans. It also offers the same features and benefits. At the same time, it is ensured that both the Members get the same benefits as the scheme. Joint term insurance policy is the best option for husband and wife as the insurance cover of another member continues even after claiming one member's insurance if the spouse is not in the policy.
Term Insurance Riders
Riders have add-on coverage which can be purchased by the policyholder with a basic term plan to increase the coverage of the policy. Many online term insurance plans offer rider as an in-built facility of the policy. Before taking an online term plan, it is very important to ensure which in-built riders and add-on riders are under the term insurance policy. The insurer with the original premium of the policy can avail rider's benefit by paying the additional premium. Some of the riders to be given on the term plan are:
Critical Illness Rider
With this term insurance rider benefit, the insured can receive a lump sum amount in case of valid diagnosis of any serious diseases as pre-specified in the policy. Diseases covered under Critical Illness Rider cover can include heart attack, cancer, paralysis, stroke, kidney failure, coronary bypass surgery, organ transplant etc.
Waiver of Premium Rider
It is one of the most beneficial riders offered under the term insurance policy. Under this rider, if the insured person fails to pay the future premium of the term policy due to any disability, all future premiums of the term plan are waived and the policy continues.
Accidental Death Benefit Rider
Accidental Death Benefit Rider can be taken to increase the cover amount of the insurance policy. Under this rider benefit, an additional assured amount is paid to the beneficiary of the policy along with the original insurance amount in case of sudden demise of the insured person.
Things to keep in mind before taking Term Insurance
These things should be taken care of before taking Term Insurance plan:
- How good the insurance company is.
- How many covers do you need?
- Check the claim settlement ratio of the insurance company
- What percentage of the insurance claims settled by the company were rejected?
Factors of inflation in premiums and coverage benefits. In the insurance cover you are taking and the period for which you are taking it, see how much your family's needs will increase due to inflation in the near future.
Compare the terms and conditions of various insurance companies.
You can also take two term insurance plans from two different insurance companies, which will save you in case of rejection of claim from either of the two companies.
Also know how the premium of life insurance is fixed.
You can take a term plan online or offline. You may find online plans cheaper.
Term Insurance features, meaning and benefits
here is an attempt to elaborate on the term plan in easy Way.
Hi , This is Pramod Choudhary from Nagaur Rajasthan India. I an student and I would like to share my positive thinking with everyone that's my passion . Thank you
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