Salient Features of a Term Insurance Plan That Everyone Must Know About

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You work really very hard all your life in order to provide financial security to your dependents. But what if something unexpected happens to you? Who will take care of your loved one’s financial requirements in your absence?

We all know that life is uncertain; you cannot predict what will happen in the next moment. Some risks come invited and they create a huge financial and emotional distress in one’s life. That is why it is imperative to financial securing for such exigencies in life so as to keep your loved ones financially secure. An apt way to do that is to buy the best term insurance plan.

What is the Term Insurance Plan?

Term insurance is a type of life insurance policy that offers life coverage for a specific number of years. If the policyholder dies during the tenure of the policy, the sum assured as a death benefit is paid to the beneficiary(s) by the insurance company.

Term plan is easy to understand life insurance products and comes with some of the unique features and benefits that make it a suitable plan for the majority of the people.

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Here are some of the salient features of best term plans that everyone must know before buying it:

Affordable Plan

Term plan is one of the most affordable life insurance plans. Since the term plan doesn’t come with an investment feature, the premium cost is lower when compared to other life insurance policies. But since keeping your loved one’s financially secure and safe in your absence is the primary goal, the nominal cost of a term plan does not burn a hole in your pocket.

Flexibility Premiums Payment Options

Some of the best term plans provide the flexibility of paying insurance premium quarterly, monthly, semi-annually, or annually. In fact, there are a few term life insurance plans that also offer single pay or limited pay premium apart from the option of regular pay premium. Such kind of flexibilities enables the insured to select an appropriate premium payment option as per his/her budget as well as convenience. 

Death Benefit

Upon the sudden demise of the insured during the tenure of the policy, his/her dependents receive the amount chosen at the time of buying the term insurance plan.

Riders/Additional Coverage benefits

You can enhance the coverage of your basic term plan by opting for riders that offer extra protection to your loved ones in your absence. These riders can be purchased from the life insurance company at nominal costs. Some of the key riders that are available with the best term insurance plan are critical illness, accidental death benefit, waiver of premium, income benefit, partial or permanent disability, etc.

Term Plan with Return of Premium

Few people often hesitate to buy a pure term plan since it does not offer maturity benefits. But there is another variant of a term life insurance plan that is known as term plan with return of premium. This type of term plan offers maturity value that is equivalent to the return of all paid premiums if the policyholder outlives the policy term. Such type of term plans is slightly expensive when compare to the pure protection plan since it offers death benefits as well as maturity benefits (whichever happens first).

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In a Nutshell

It is quite important to determine your financial requirements and then opt for the adequate sum assured for your term life insurance plan. Knowing the key features and benefits of a term plan will certainly help you to buy the best term insurance plan based on your financial needs. Also, keep in mind that term life insurance policy purchased at an early age will be the best financial decisions you can make as it will keep you worry-free for the rest of your life.

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