Short Term Disability Insurance - Short term disability insurance is a type of insurance plan designed to compensate for the lost income due to a disability
Buy a term plan and secure your family
As compared to the other traditional types of life insurance coverage, a basic term insurance policy is the most economical or affordable way to get coverage for one’s life. You can get quite the sum assured at just nominal premium charges. The reason behind the low premium charges on term insurance is that they do not offer any maturity benefits and only provide cover against death, except for some plans like the TROP. People who are seeking to buy a life insurance plan on a low budget can find a term insurance policy to be their best option.
The major reason why people do not like to opt for term insurance is that there is no return that is offered upon survival as a maturity benefit. If the policyholder survives the tenure of the term insurance policy, he does not get any return because it does not have any savings or investment elements.
However, there is another variant of a term insurance policy known as the TROP that is term insurance with return of premium. In TROP, if the policyholder survives the term of the policy, then all the premiums that were paid over the course of the policy will be returned (the amount of premium returned varies across the providers).
Naturally, the premium charged on a TROP is higher as compared to the premium charged on a pure term insurance policy.
Our needs are necessarily not going to be the same forever. With the circumstances changing by the day, our needs tend to change as well. To meet up with these changing needs, some of the term insurance plans in the market come with an option of convertibility. This feature of convertibility of term plans gives the policyholder an option to convert the existing term plan into a permanent life plan during the term of the policy or at the maturity of the term insurance policy.
There are also many add-on optional riders available with the term plans in the market that can be added on the base policy to enhance its coverage. One can add these riders to the policy at additional premium charges for wider coverage. Some of the common riders available with a term insurance policy are:
If one does not wish for the death benefit to pay out all at once as a lump sum to its beneficiaries, there is an alternative available offered by some of the insurance providers in the market. You can opt for the sum assured of your policy to be spread across as monthly payments at the policy inception because it can be difficult for the family members to handle, use, and invest the entire amount that is payable at the time of a claim.
Many of the term policies allow the policyholder to receive the entire or part of the claim amount as a level or increasing monthly payouts. Later, at the time of claiming the policy’s sum assured if the beneficiaries wish to take the entire sum assured as a lump sum, they can opt for the same at a discounted value, as offered by some of the term plans.
Purchasing a term insurance policy online has many advantages as opposed to purchasing one offline. Online term plans have the biggest advantage of being cost-effective, as they do not involve any intermediary commission. This is the reason that the companies offer rebates to the policy seekers on the premium charges. On top of this, the procedure of opting for a term insurance policy online is also very easy as it is hassle-free and also requires minimal documentation.
During the term of your term insurance policy, you have the option available that allows you to increase your coverage amount i.e. the sum assured of your policy once you reach the various milestones in life such as childbirth, marriage, among many others. The percentage of the cover amount that can be increased varies from one provider to another and from one term plan to another.
The term insurance policy allows you to choose the tenure or the term of your policy such as 15, 20, or 30 years as per your financial responsibilities and requirements. You do not need to pay premiums for the whole of your life. You can also opt for a term insurance policy that allows a single pay (i.e. pay the premium at once and get coverage for the entire tenure), or limited pay (i.e. pay premium for the selected term and get coverage for the entire tenure of the policy).
This feature of the term insurance policy makes it a tool for risk management against any loans or debts one may have. You can also choose the term of your policy, as per your outstanding debts and minimize any risk.
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The Bottom Line
A term insurance policy does not only offer an economical way to buy life insurance coverage, but it also offers a great degree of flexibility and a variety of benefits. A term plan can do plenty of benefits for your financial planning when chosen properly and customized well.