Term Plan – Everything that You Need to Know Prior to Taking One 

Term insurance plan is a type of life cover and offers coverage for a specific period of time. Moreover, if the insured person expires during the period of a term policy, then the benefit will be paid to the nominee. Today, you can even have the convenience of availing online term plan and protect your family from future uncertainties. Basically, you will receive a particular coverage amount for a specific time period. 

Leveraging the Low Premium 

The premiums associated with term insurance policies are relatively lower as opposed to other types of life insurance policies. Considering that there is no investment aspect and the premium is directed towards covering the risk, the premium is kept at a low amount. Moreover, there is no maturity or cervical benefits after the policy period has come to an end. 

What are the Types of Term plan 

Whether you get online term insurance or traditional term insurance, you will have to make a choice between different types of the term plan. Following are important types of term plan – 

  • Level or Fixed Term Insurance – 

As the name suggests, in level or fixed term insurance, the premium remains the same throughout the timer period of the policy. 

  • Increasing Term Insurance 

Under this type of insurance, the death benefit rises at particular time intervals; however, the premium continues to stay the same. It makes sure that the death benefits are considered into inflation because the future expense of the family is more likely to rise. 

  • Decreasing Term Insurance 

In this type of insurance, the sum you have been assured for decreases each year; however, the premium amount remain the same. These policies are beneficial when the insured individual has huge debts or loans to cover. 

  • TROP Plans

TROP plans is known as the term plan with return of premium. In this, if the insured expires during the timeline of the insurance policy, the nominee will get the payable amount. However, if the insured survives throughout the policy period, he or she will be returned all the paid premiums, 

The Eligibility Criteria and Choosing the Right Coverage 

The eligibility criterion for the term insurance plan differs from one insurer to another. However, typically, the minimum age of acquiring this policy stands at 18 years and the maximum age is 65 years. 

When it comes to deciding the right coverage for you, it is important to understand that one size does not fit all. Therefore, you have to do your research and understand the clauses associated with your polices in order to make a viable decision. There are many insurances offering term plan insurance with attractive benefits and offers. 

Instead of falling into the marketing hype; you have to be mindful with regards to the decision you are making. Insurance policies come with many indirect or hidden clauses, and for you to able to enjoy the maximum benefit, you should identify and comprehend every little aspect associated with the insurance policy. 

Posted in: Personal Finance

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