Over the years, the insurance sector has witnessed tremendous expansion. Life insurance is no longer limited to the convention endowment insurance cover.
Today companies have introduced different policies with greater coverage and benefits. And, the term insurance plan is among the most sought-after insurance policies in India. It is easy to understand and comes with tons of valuable features that make it an excellent savings plan.
What is Term Insurance?
Term insurance is referred to as a pure life insurance product that will not burn a hole in your pocket. The term insurance plan promises to provide a lump sum death benefit to the beneficiaries in case they meet an untimely death during the particular time frame. This way, you can take care of the family even when you are not, thereby offering them financial stability. However, if you survive the tenure of the policy, you will not get any benefit.
Moreover, there is not an investment factor, so the premiums you are paying will be directed solely towards the mortality charges.
What Are The Types of Term Insurance?
Whether you buy term insurance online or offline, the following are the different types that you will come across:
Level Term Insurance
This is the most commonly bought plan in the country. The sum assured, along with the premiums payable, remain the same for the entire tenure of the policy. So, the premium you agreed upon while signing up for the policy will remain fixed for the next 10 to 20 years. This is a type of life insurance cover that you will find with all life insurance providers.
Increasing Term Insurance
An increasing term plan is a policy in which the death benefit increases yearly during the term of the policy. However, the premium of the policy remains fixed. Some plans feature a certain maximum limit that the insured sum can reach. Post this, there will be no increase in the coverage amount, but the policy will continue to be effective. These plans are designed to deal with the impact of inflation. This form of a term plan is more expensive than other options.
Decreasing Term Insurance
Here the insured sum tends to decrease each year until the overall policy pay becomes zero. The premium you pay throughout the tenure remains fixed. These policies are taken to cover a particular debt. Typically, the sum assured becomes nil when the policy period expires. The premium paid in this type of policy is lower in comparison to other forms of term insurance plans.
Return of Premium Term Insurance Plan
In this type of term plan, the company will pay back all the premiums that you have paid at the end of the term. But to get the premium amount, you have to survive through the tenure of the term insurance policy.
What Are The Rider Options Offered in A Term Plan?
The following are rider options available when you buy a term plan online or offline:
Critical Illness Rider
This is the insured individual diagnosed with a critical illness; he or she will get assured of the illness. The critical illness should fall under the diseases mentioned in the policy.
Accidental Disability Rider
It ensures that if the insured had an accident and becomes disabled because of the same, then he or she will receive the insured amount against this rider. This amount can be taken as monthly income spawned through a particular time or lump-sum. The rider can provide cover for around two to ten years based on the financial needs of the insured.
Moreover, if the insured becomes completely disable where he or she is unable to fend for herself or himself, the overall insured amount against this rider will be given to him or her. And, if there is the partial disability, the insured will be the partial sum assured against the rider.
Terminal Illness Rider
In this, the policyholders get financial protection against illness, which cannot be cured and would not last more than six to twelve months. This rider pays the assured sum to the nominee or insured without a delay. However, the terminal illness must be confirmed and verified by the medical practitioner.
Waiver of Premium Riders
This rider comes in forms that include:
Waiver of premium for critical illnesses riders
Under this form of a rider, if the insured is diagnosed with a critical illness, which is mentioned in the insurance company’s policy, he or she would not have to pay the premium in the future. However, the policy will remain active.
Waiver of premium on disability rider
In case where an insured individual suffers from a permanent disability, then the insurance company will completely waive the future premium of the term plan.
Term insurance plan, whether you buy online or offline, proves to be highly beneficial. Whether it is the primary coverage or the rider option, you get a lot of valuable features with this form of the life insurance policy.