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Exploring Diverse Varieties of Term Insurance Plans

Author: Team Finpage
Wednesday, August 09, 2023

Hey do you wish to get covered by an insurance policy that has a low premium amount but the coverage is high? 

Here is one of the insurance policies which you can consider a “Term Insurance Plan” 

It's designed to provide coverage for a specific period (usually 5-30 years) and pays out a death benefit if the policyholder passes away during that time. These plans offer a high sum assured for a relatively low premium compared to other types of life insurance policies. Factors like the policyholder's age, health status, and the sum assured all play into determining the premium cost. The main purpose of term insurance plans is to provide financial protection for a policyholder's family in case of an unexpected death.

Let's have a quick rundown of the main types of term insurance plans according to IRDA:

First up is the level-term insurance plan. It's pretty straightforward - throughout the policy term, the sum assured and premium stay the same. If the policyholder passes away during this time, their beneficiary gets the sum assured as a death benefit.

Next, we have the increasing term insurance plan. It's meant for those who want to keep up with inflation; the sum assured increases at a fixed rate each year over the policy term.

There's the decreasing term insurance plan, which works best for those who have a decreasing liability, like a mortgage or loan. Here, the sum assured decreases over the policy term, while the premium stays the same. 

We have convertible term insurance plans. With this plan, you have the option to convert your term insurance policy into a whole life insurance or endowment plan down the road. This is perfect for those who want the flexibility to switch to a policy that offers savings or investment benefits. 

There's the group term insurance plan, which is specifically designed for groups of people, like employees of a company. With this type of plan, a single policy covers multiple individuals, and the premium is usually lower than an individual term insurance plan. 

Finally, some insurance companies offer term insurance plans with riders or additional benefits. These add-ons, like a critical illness rider, accidental death rider, or waiver of premium rider, can be tacked onto your policy for an additional cost. They provide extra coverage and protection for you and your loved ones.

If you're looking for life insurance coverage that won't break the bank, term insurance plans might be just what you need. Unlike other policies like whole life insurance or endowment plans, term insurance plans are purely for life insurance coverage, without any savings or investment components. That means they're a more affordable option. Just be aware that if you outlive the policy term, you won't get any benefits. But some insurers have the return of premium plans that give you your money back if you don't make a claim. Bottom line: be sure to read the policy terms carefully and choose the plan that's right for you and your financial goals.

Team Finpage

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