Term Life Plan
Term life insurance, also known as pure life insurance, is a type of life insurance that guarantees payment of a stated death benefit if the covered person dies during a specified term. Once the term expires, the policyholder can either renew it for another term, convert the policy to permanent coverage, or allow the term life insurance policy to terminate.
Why you need term plan?
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Secure Your Family
If you are bread earner of family, buying a term life plan will help to earn monthly budget of your family in your absence.
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Cover Lifestyle risks
In today's world, due to busy lifestyle people are facing few lifestyle disease at young age too. Some term plan offers critical illness protection which will help you to cover your expenses in illness and will not give financial burden your family.
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Secure Assets
In case, you have taken any form of loans (Home loan, Car loan, Business loan etc), then repayment of such loans will hamper your loved ones. Term plan will help you to pay off your loans and not give financial burden to family
Key features of Term Plans
1. Affordable
Term insurance policies are some of affordable life insurance products. The premiums are generally low as compared to life insurance
2. Convenient Pay Out options
You / Your family can choose the payout terms in following ways:
i. Lumpsum
ii. Lumpsum + Regular income
iii. Regular Income
3. Tax Savings
The premium you pay for the term insurance cover is eligible for deduction under section 80C of the Income Tax Act. Thus, your term insurance plan also helps to reduce your tax liability.
4. Single Pay / Limited Pay / Regular Pay Options
You can pay premium for the entire 20-to-30-year policy paid in a single instalment or premium for the entire policy term within a few years or Regular pay for each year. You can choose your convenient method.
Increasing/ Decreasing Term Insurance Plan
Increasing term insurance is a term plan where the life cover amount continues to increase automatically. This growth has a ceiling and once the sum assured reaches this ceiling the growth will stop. Decreasing term insurance means that the life cover continues to decline with time. This term cover is usually given to cover a loan in case of your untimely demise.
Level Term Plan
In Level Term plan, sum assured remains the same throughout the policy term. Some plans will allow you to increase your cover based on specific life events. For example, marriage, childbirth or home purchase.
Term Plan With Return of Premium
Under the term plan with the return of premium option, you will receive all the paid premiums at the expiry of the policy if you survive. This plan is popular for offering cash at the time of retirement as most term plans will last that long.