Term Life plan is pure protection plan. Unlike the whole life insurance products, it does not provide any cash value. However, this is the cheapest form of life insurance that provides full financial coverage for a defined period of time where in the event of any unforeseen situation the policyholder’s family is taken care of and financial stability is ensured. Some companies also cover permanent or partial disability wherein the policyholder’s regular income is disrupted.
Benefits of Term Insurance
1.
It gives financial stability to your family so that your family continues to live with pride in the event of any unforeseen situation
2.
It pays off the loans and liabilities in the event sudden death
3.
Instant life cover
4.
Extremely affordable premium
5.
Term Insurance also takes care of family in case of your disability or critical illness
6.
Get lumpsum amount if diagnosed with critical illness
7.
Additional sum insured in case of accidental death
8.
Tax benefit under sec 80C of Income tax act, 1961
Features
Term Life Insurance provides protection for a particular time period say, 10, 15, 20, 30 years or maximum renewal age, as chosen by the insured. If the insured dies within the chosen term period, benefits are provided to the nominee. However, in case the insured lives longer than the period he has acquired the life policy for, the term policy comes to an end and the insured is not supposed to get any benefits. Nonetheless, Life insurance plans with the return of premium have also come into the offering where the insured is able to get the premiums paid by him back at the time of the maturity. People use the internet to buy insurance plans and best online term insurance plans are such which provide maximum benefits with minimum cost.
The key features :
1.
Policy Term: The minimum policy term is 5 years, with the maximum varying from 25 years to whole life span for equated monthly premium payments. For single premium payment policies, the policy term is 5 to 15 years.
2.
Plan Choice: Term insurance provides flexibility in terms of choosing the plan on single life basis or joint life basis.
3.
Age: To be eligible for term insurance plans, the minimum age of entry is 18 years, with a maximum age limit of 65 years with optional add on benefits.
4.
Death Benefits: On death of life assured during the term of the plan, the nominee or assignee, in case where the policy has been assigned to someone else, will receive the total/ assigned death benefit chosen at the time of commencement.
5.
Maturity Benefits: Term insurance plans don't come with any survival or maturity benefits. If one wants maturity benefits, then a TROP (Term Return of Premium) plan is suggested.
6.
Additional Optional Benefits: Additional optional benefits such as critical illness and accidental death/ disability or Accelerated Sum Assured are also available.
7.
Riders: Riders or add-ons are the additional benefits that can be added to the existing policies by paying extra premium. It helps to provide additional insurance coverage at minimal cost. You can choose to add one or all such riders depending on your requirements by paying an extra premium with your basic policy premium.
Tax benefits
Term life insurance plans come with excellent tax benefits. The premium you pay annually and any sum received by you under the policy are exempt under section 80C and section 10D of the Income-Tax Act, respectively.
Important factor that determines the cost of the premium
1.
Health condition:
If a person is healthy then his chances of getting hospitalized is lower. At the same time, if a person has any pre-existing condition the premium would be higher or the disease would be excluded from the coverage depending upon policies laid by the insurance company.
2.
Age:
The younger you are, the lower your premiums will be. Premiums increase with age, as does insurer's level of risk.
3.
Gender:
The battle of the sexes extends to the life insurance premium battlefield too. Since women on an average live longer than men, their insurance premiums are lower by a tiny margin.
4.
Investment objective
a.
If savings, we need to look at ULIP with a guaranteed return possibility
b.
For corpus building, a traditional ULIP with no guarantee
c.
For a retired person, an annuity plan
4.
Smoker/Non-Smoker:
If you're an active smoker & consume alcohol, you will land up paying higher premiums
5.
Tenure of cover:
Insurers undertake greater risk the longer they cover you. Premiums on short-term policies are more expensive, but long-term life insurance plans have more payments.
6.
Amount of Coverage:
Higher the amount of coverage, higher will be the premium and vice-versa
7.
Online/Offline:
Premium rates for online plans are up to 60% cheaper than similar plans offline.
How much Term Insurance cover do I need?
Every policyholder should review his plan's features on a regular basis so that it is coherent with the current needs. The amount of Term insurance that you need depends on various factors such as marital status, earning power of the person, age in the family. The requirement of having an insurance plan changes every few years due to increment in responsibilities.
So, you should keep these points in mind while deciding Insurance cover:
1.
Immediate financial expenses that your family may require upon your immediate death.
2.
Your salary that goes towards meeting present expenses and future needs.
3.
How long would your dependents need support?
4.
Money that would you like to save for your child’s education and marriage.
5.
If you're leaving your house, car and business to your dependants, you may also be leaving them your debt through unpaid house and car loans. Arrange to clear your debts, or to have an insurance pay-out large enough to clear it for you.
6.
If you're confident that you have ample savings and investments to carry your dependents through their lives without you to provide for them, choose a policy with a lower pay-out and consequently lower premiums. If not, do the opposite.
Source:
https://www.click2cover.in/term-plan 
