Given the ever-rising inflation, increasing cases of critical diseases, and advancing lifestyle, understanding a term plan is the first step towards financial planning. A term plan refers to a contract between the insurance company and the insured, where a pre-determined amount is paid to the insured’s family by the insurer in case of the unfortunate death of the insured person. In return, the insured must pay a fixed premium amount regularly.
Term insurance is a type of life insurance policy that offers adequate financial coverage to your family to face financial obstacles in the future. The pre-determined sum or the sum insured is paid to the nominee as a death benefit after the insured passes away. Investing in the best term insurance is beneficial since they are available at budget-friendly premiums.
Image Source: Shuttersatock
Why is a Term Plan Important?
The best term insurance plan can provide your financial security to your family and help them manage their regular expenses. You may get hit by uninvited risks such as critical diseases, disability, or accident, and they can create a financial dent in your life. Therefore, it is vital to be prepared for such exigencies to keep your family financially secure.
7 Features of the Best Term Insurance
A term plan comes with various features and specifications. Let us look at the key features of the best term insurance: –
Affordability is the most significant feature of the best term insurance plan. A term plan provides life cover of a pre-determined sum insured for a given period known as the policy term. The premiums for a term insurance plan are the cheapest compared to other insurance plans. If you buy a term plan earlier, the lower the premiums will be, and it will not change as you grow old. Also, keep in mind the term age group while buying a term plan.
Easy to Buy
A term plan is easier to understand compared to other insurance plans, and therefore, it is easier to buy. The framework of this policy is simple, making it one of the safest investments. You must buy a term plan with an adequate sum insured, given your financial goals, debts, budget, etc. You can use estimate your premium and sum insured using a premium calculator.
Multiple Payout Options
A term plan usually provides a lump sum death benefit to the nominee. But managing a huge sum can be challenging for your family. In that case, you can opt for a regular payout option, where the nominee will be given a regular monthly amount.
The best term insurance plan offers you the flexibility to pay premiums annually, half-yearly, quarterly, or monthly. Most term plans also provide a single or limited pay premium option. This flexibility can help the policyholder to pick the appropriate premium payment option as per their convenience.
Most insurance companies offer discounts if you opt for a higher sum insured plan. Women and non-smokers get a special discount on the premiums from the insurance companies.
Return of Premiums
People may hesitate to invest in a term plan because it does not offer any maturity benefit. But insurance companies provide an option to choose the return on premium option, which provides maturity benefit equivalent to all the premiums paid. But such plans have a slightly higher premium rate.
The premiums paid toward the best term insurance plan are eligible for tax exemption under section 80C of the Income Tax Act of India.
Reasons to Buy a Term Plan
The best term insurance plan provides comprehensive coverage that can take care of all the financial needs of your family. Here are some of the key reasons to buy a term plan: –
- Financial Protection- A term plan is one of the simplest and safest ways to provide protection to the dependents of the insured in case of their unfortunate demise.
- Sufficient coverage- Customers can choose their coverage amount by comparing various term insurance plans to find the best term insurance that suits them.
- Riders- In addition to the life cover, the term plan provides add-on riders that can enhance the coverage of the plan. For this, you may have to pay a higher premium amount. Some of the riders include critical illness, disability, accidents, etc.
To find the best term insurance plan, you must keep in mind its key features. Since there are many options available, choosing one out of many can be confusing. You can consider buying a term plan from Max Life Insurance. Their plans are affordable and come with extensive benefits.