What is a Term Insurance Plan?
Term Insurance policies are life Insurance policies where the insurer pays an assured death benefit to named beneficiaries, usually family, at the time of death of the policyholder. This contract is maintained in lieu of a regular premium paid to get coverage for a fixed number of years or term.
There is no savings component or return upon maturity. The insurance cover is valid only upto a fixed 'term' and if the policyholder expires within that term, the beneficiaries receive a death benefit only. If death takes place after the 'term' of the policy has ended, no death benefit can be availed.
At the end of the term, you can choose to renew your term insurance plan and the premium will be adjusted and recalculated, taking in factors of age, health and general lifestyle. A term insurance plan can be a safety net for you and your family in case of an uncertainty.
Term insurance plans offer one of the highest coverage at the lowest premiums amongst all other types of life insurance policies out there. This is because a term life insurance plan is only valid for a restricted time and even on claim, doles out only a single, death benefit. The simplicity of a term insurance plan makes it a popular choice amongst Indians today.
A Term Insurance plan is the simplest and easiest way to ensure that your family's financial needs like monthly expenses and annuities are catered for in case of an eventuality leading to sudden death of the policyholder. A term plan can also take care of future needs like the expense for higher education or marriage of a child.