Insurance is one of the most important investments that you make to protect your family and their needs in the long run. Not only does it give you a specific cover for a prolonged period of time, but also ensures that your loved ones are safer and face no financial hurdles.
How Is It Different from Health Insurance or Life Insurance?
Be it health insurance, life insurance or generic term insurance, all of it has a significant role to play in your life. But do you how those terms are defined exactly like? How does each one benefit you? Well, health insurance is a kind of policy that helps you during medical emergencies. It keeps all the medical bills covered protecting your loved ones from any kind of hassles during an emergency.
On the other hand, life insurance is a policy which helps your family by giving them a lumpsum amount after you have passed away. Term insurance, however, is a whole differ ball game.
How Do You Define Term Insurance?
Term insurance is one of the most comprehensive policies which keeps your family protected from financial issues for a definite period of time. However, if anything unfortunate happens to you, the nominee or the family members are entitled to claim death benefits from the insurance provider.
Is Pay Out Method and Policy Clear?
You can either choose the payout as a lumpsum one or claim it as a monthly allowance amount depending on your requirement and needs. Insurance providers have been generous when it comes to covering the insurance holder on the case of partial or permanent disability as well.
However, there is a catch. The term insurance conditions are applicable and can be availed only if the insurance holder has not survived the whole term of the policy. In case of survival, the entire policy stands null and void and cannot be refunded under any terms and conditions. In such cases, the buyer can either extend the term of coverage or forgo the entire policy at once.
One might think that what if their life expectancy is higher or what if they survive the entire term. Well, experts recommend that you should not be short-sighted and look for the better benefits. It is your family that gets financial coverage and it saves them from any kind of harassment after you are gone. Even though they might feel your absence, the financial cover you leave finds always stays back.
There Are Multiple Benefits That Are Associated with the Purchasing of Term Insurance in General
- Your family gets a lumpsum amount after your death.
- They can choose to get that money as a monthly allowance to cover the daily expenses.
- It can take care of the medical expenses in case someone is critically ill.
- You can also avail a term insurance plan and get a lumpsum cover in case you as an insurance buyer contract a critical illness.
- It serves as an allowance when the family needs it the most.
How Is It Useful for You?
Imagine your family gets a payout of 1 crore in case of an accidental death where you have been paying a premium as low as 854 INR per month. Well, that is true when it comes to term insurance. A higher sum assured or a higher coverage is guaranteed at the lowest premiums available. The premium payment can be spread across the year in different durations. Choose from a monthly, half-yearly, quarterly or annual plan to stay covered and keep your family safe. You can use term insurance premium calculator to choose the best affordable term insurance plan.
Not only is the plan flexible, most of the insurance providers suggest that you buy an additional plan for protection and keep your options open too. There are multiple hidden gems which you might want to consider before buying that term insurance plan. You get tax benefits under section 80C which allows a 1.5 Lakh tax exemption under the Income tax act. You can also claim tax benefits under Section 10 (10 D) for additional benefits. Moreover, if you have a critical illness plan and have been paying premiums for that that can be clubbed with the premium of the term insurance and is eligible for claim.
How Is the Policy Span and What Do I Need to Do?
The minimum number of years for which you can buy the policy is 5 years and it can be extended up to 25 years. If you have a single payment policy option, you can cap your policy term at 15 years easily. A longer-term plan locks your investment amount and then you can pay the premium for the entire term of coverage.
Moreover, more than one family member can be covered under the plan or term it as a single life plan or multiple life plans. This simply means that you can have a single plan for the sole breadwinner of the family or have both spouses covered under the plan. Therefore, the plan usually pays out on the expiry of either spouse.
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