Term life insurance is an insurance plan that provides cover for policyholders in their sudden demise due to an unforeseen circumstance. It is only applicable up to a specified tenure period. Once the term ends, the policyholder will need to renew the policy or convert it into permanent coverage. They may also let the policy plan terminate upon their decision.
What is Term Insurance? Term plans are generally affordable but do not hold any cash value. The only value policyholders may receive is the death benefit from their demise. There are many terms plans to choose from – Convertible term, increasing term, and Decreasing term. The annual renewable time is also a part of the list.
An Insight Into Term Insurance Policy
There are many term plans available for the policyholder to choose from. Each of them offers a different premium plan for the duration of the policy. That is known as “level-premium” policies. These can be paid both annually or monthly, depending upon the policyholder’s convenience.
The premiums are fixed and stay the same until the term expires. The insurance provider estimates these based on the policyholder’s lifestyle, age, and life expectancy. In some cases, your insurance provider may even ask you to sit for a medical exam to understand you and your family’s medical history.
If the policyholder passes away before the duration ends, the insurance company will compensate and cover their family. But if they die after the plan’s expiry, the insurance company will not be entitled to pay any sum insured to the policyholder’s family. In that case, the cover will need a renewal or a conversion into permanent coverage.
Why Do You Need The Term Plan?
Financial Security
Term Insurance Policy is significant for policyholders who wish to secure their family’s financial future and stress less about their long-term stability. With a term plan at hand, you no longer have to worry about ensuring your family’s financial future after you are no more. The plan will compensate you and help them in times of crisis without any compromise. Providing a total sum insured amount to your family will help your family accelerate its financial stability even during your absence.
Future Security
It is inevitable to worry about your child’s marriage, education fees, and parents’ medical facilities, especially when you are afraid to die. Since the future cannot wait, it is significant to secure it with a safe term plan at hand. So, when you die due to any unforeseen reason, the insurance company will be available to support your family financially on your behalf.
Riders
Many term insurance plans avail unique benefits like riders. Accidental coverage, critical illness cover, and return of premium are some of the many riders available. With these riders at hand, you can receive maximum benefits to improve your financial stability and cover plan.
The Bottom Line
A suitable term insurance plan promotes financial security for your family without any compromise. Make sure to consult an insurance provider for more information.
