Term insurance plans are low cost, high coverage plans to provide lifelong protection.
A term insurance plan is different from all other types of life insurance policies. While in all other plans, part of the premium is spent on savings, in a term insurance plan, the premium is entirely spent on risk coverage.
If you only want to buy protection, a term insurance plan is the plan to buy from life insurance companies. The operation is as simple as possible – You pay a premium based on age, term and sum insured (life cover) and get nothing by surviving the term. In the event of death during the mandate, the candidate receives the sum insured.
The best part about term insurance is that the premium is low and even by paying a lower premium you can get high coverage. For example, a 35-year-old can buy a Rs 2 crore term insurance plan by paying around Rs 22,000 per year for 25 years. The actual premium will vary between insurers.
Indeed, one can buy high cover of Rs 1 crore, Rs 2 crore or even Rs 5 crore by paying a fraction of the cover amount as premium. Term insurance plans are low cost, high coverage plans to provide life protection to family members.
In addition to providing life coverage in its purest form, there are several other add-ons and variations of term insurance plans. Depending on the needs, they can be added to the basic coverage and personalize the policy.
According to Aatur Thakkar, co-founder and director at Alliance Insurance Brokers, here are a few:
Terminal illness cover: The full sum insured is paid to the insured when they are diagnosed with an illness which they would not normally survive beyond the next 6 months
Premium waiver: In the event that the insured suffers permanent total disability, all future premiums are forfeited, but the policy continues under the original terms of the contract.
Facilities for riders: The product must be able to meet the needs of essential passengers who must be made available. For example, Accident Benefit plus Critical Illness Benefit plus Disability Award
And, regarding the choice of insurer, in addition to the low premium offered by the plan, also consider looking at other indicators. “Comprehensive term life insurance requires researching the underwriter’s backdrop – solvency margins, claims payout ratio, AUM and customer base, persistence ratings and rankings on the IRDA dashboard,” Thakkar advises. .