Life insurance is evolving every day. It serves multiple purposes primary being risk cover, investment and savings. The options are numerous; there are so many plans waiting for you, these includes a pure life cover, a money back plan that is good for your family commitments, a pension plan and certain market linked plans.
Learn more about the different types of life insurance policies here.
Term policy is a pure life insurance plan that is a must have for each one of us.
These policies are the simplest policies as they cover you for a particular amount (known as sum assured) for a fixed time frame. Your age while purchasing the policy, policy term and sum assured determine the premium you have to pay. The most basic of all the term plans provide risk cover against death of the policyholder. If you survive the policy term, the policy expires. Hence, it is recommended that you choose a term insurance plan which provides a life cover at least up to the age of 80.
Let’s understand all about term insurance plans;
It is a pure life insurance product that is pocket-friendly. This plan covers a death risk and a promise to provide a lump sum benefit (the sum assured you choose) at the time of death to the beneficiaries (nominee) of the insured person. If any mishap occurs to the policyholder, the family members get financial stability with the help of the sum assured received from the insurance company.
As no investment is present in such insurance plan, the premium is generally paid towards the mortality charge i.e. risk cover. The sum assured you choose is fixed and tax exempted. In terms of expenses, term insurance is least expensive.
Below are the basic terminologies associated with Term Plans:
The amount fixed for you to be paid to the nominee after your demise
Any person of the age group between 18 and 65 comes in the bracket and is eligible to purchase a term insurance policy.
Maturity age is the time period after which the policy expires. Maturity age depends on the policy term you choose. Life expectancy has increased in the past 10 years and so it’s recommended to be covered at least till age 80.
It is the duration of the policy in which the policyholder’s life will be covered. For example, if a person of age 40 years wants to buy a term plan with the maturity age of 80, his policy term will be of 40 years. It is advisable to seek for the maximum possible period as this will help you in getting the best possible life cover.
A rider is like an add-on which can be added to your existing policy. Adding riders will help in getting enhanced protection by paying a marginal amount. There are many varieties of riders available to choose from. If you purchase a term plan with an accidental death rider, your family will get an additional amount in case of death due to accident, if you purchase accidental total and permanent disability cover you will get covered for any permanent disability that will occur due to an accident.
While you are in the process of purchasing the life insurance, the insurer might ask you to undergo few medical tests. It is mandatory to undergo such medical tests and submit few documents. A term insurance plan takes care of all financial liabilities in your absence and provides complete peace of mind.
Check out the new term plan launched by Edelweiss Tokio Life here, this term plan comes with a whole host of new and unique benefits.
If you want to read more about the new term plan you can check out these articles