Why Opt for Term Insurance Plans?

Term insurance plans provide financial protection for your entire family in the event of the policyholder’s untimely death. Additionally, you can choose to add coverage for critical illnesses or accidental death. These plans offer long-term coverage with budget-friendly premiums.

How Term Insurance Works?

Here is a list of steps you need to follow to get a better understanding of how term insurance works.

Assessing Your Requirements

Before purchasing the most suitable term plan, you must assess your requirement. Here is a list of all the factors you need to consider before finding the right term insurance plan.

1. Appropriate Life Cover: The next step is to figure out an appropriate life cover to ensure that your family can take care of their financial obligations in the event of your absence. Generally, an appropriate life cover should be at least 15 to 20 times your annual income at the time of policy purchase.
2. Suitable Policy Term: The policy term defines how long you will be protected under the plan's benefits. Ideally, the term should extend until your financial dependents no longer rely on you for support.
3. Convenient Premium Payment: You need to decide on your preferred payment method. Options include a single lump-sum payment, monthly installments, or a combination of both.
4. Choose the Benefit Payout Option: You must choose how the payout will be provided to your beneficiary. They can receive it as a one-time lump sum or as regular monthly payments to cover ongoing expenses.
5. Select Required Riders: Additional riders allow individuals to expand their coverage. Options include riders for accidental death benefits, critical illness coverage, and more.

Life Stage Adjustments

Check if your policy allows coverage increases for life changes like marriage or having children.

Application Process

Submit the application form with necessary details such as personal info, medical history, and income.

Premium Payments

After assessing your application and health, the insurer will set your premium. Premiums may vary based on your health and any riders chosen. Pay regularly to avoid policy lapse.

Nominee Designation

Select a nominee who will receive the benefits if you pass away during the policy term. This can be a family member, friend, or charity.

Untimely Death

If you die during the policy term, the death benefit will be paid to your nominee.

Policy Term Completion

If you outlive the policy term, standard plans don’t offer maturity benefits. However, plans with a return of premium features will refund the premiums paid.

Conclusion

Term insurance is ideal for those wanting affordable family protection. It helps financially secure your family even in your absence. To maximize benefits, understand how term insurance works. These plans offer tax benefits as well. Compare options and buy online or offline based on your preference.