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Given growing prices, changing lifestyles, and increasing critical illness cases, understanding term life insurance should be the first step in financial preparation. You may be wondering how this helps.
To better grasp this, let’s take a closer look at what term life insurance is and how it works:
What is Term Insurance?
If you’re wondering what term insurance is, we’re here to assist. Simply defined, term life insurance is an agreement between the policyholder (insured) and the insurance company in which, in the event of the policyholder’s untimely death, the insurance company pays a predetermined sum to the insured person’s family. When it comes to long-term financial planning, term plans will come in handy.
When determining what term insurance is, it is critical to realise that term life insurance is the purest kind of life insurance coverage that provides full financial protection to your family members from life’s uncertainties.
Your family will get life insurance or a sum assured based on the term insurance plan you choose in the event of your untimely death during the policy period.
What are the Key Features of Term Insurance?
Now that you know what a term life insurance plan is, you should properly comprehend what it means for your loved ones by researching the features and advantages of term insurance policies. If you are looking to buy term insurance, then the following are some of its benefits:
Entry Age: The lowest eligibility age for term insurance policies is 18 years, while the maximum age eligibility to obtain a term plan is 65 years. The premium rate of the policy rises in tandem with the policyholder’s age.
Maturity Age: The most advantageous term life insurance plans are those that provide coverage to the policyholder for the rest of his or her life. The majority of term insurance policies have a maturity age of 65-70 years. Because it provides long-term insurance coverage, the plan with a greater maturity age also has a higher premium rate. Aside from that, an individual’s age is a significant component in determining the premium amount of the insurance since the risk factor grows at the same time.
Larger Life Cover: Because term insurance premiums are less expensive, insurance customers can pick a policy with larger life coverage for the same price as endowment plans.
Policy Tenure: A term life insurance policy has a minimum tenure of 5 years and a maximum term duration ranging from 25 years to complete life. The policy duration for a single premium payment insurance runs from 5 to 15 years.
Death Benefit: If the policyholder dies within the policy’s term, the insurer pays a total sum guaranteed amount to the policy’s nominee as a death benefit. The amount of the sum assured stays the same regardless of the kind of policy chosen by the policyholder, and the death benefit is paid as a lump sum or at specific intervals of time.
Maturity Benefit: Maturity benefits are not provided by a standard term insurance policy. However, if one wants to profit from survivor benefits, he or she might invest in the term return of the premium plan (TROP).
Additional Rider Benefit: As an add-on rider benefit, term insurance policies provide additional coverage in addition to standard policy coverage. To use the rider benefit, the policyholder must pay an additional premium in addition to the base insurance premium. Let’s take a look at the rider perks available with term insurance coverage.
Best Term Insurance Plans In India
To make your decision easier, we have produced a list of the top 5 term life insurance policies available in India.
1. SBI Life eShield Plan
The SBI Life eShield plan is just for protection. It is a non-linked, non-participating plan that provides financial protection to the family of the life guaranteed in the event of an unanticipated occurrence. This plan offers extensive coverage at a low cost. The protection amount remains constant during the policy term under the SBI Life eSheild plan’s level cover benefit, whereas the protection amount rises overtime during the policy term under the SBI Life eShield plan’s rising cover benefit.
2. Canara HSBC OBC iSelect Star Term Plan
Canara HSBC OBC iSelect Star Term Plan is an excellent plan that can assist you in overcoming life’s uncertainties. iSelect Star Term is an individual non-linked non-par pure risk premium life insurance plan that can be purchased online at low premium prices. This is a versatile term life insurance that allows you to tailor it to your lifestyle demands by providing a variety of coverage, premium payment, and benefit payout choices. The iSelect Star Term plan includes whole life coverage, but it also provides for term life coverage. The policyholder chooses coverage for a limited period.
3. Kotak e-Term Plan
Kotak e-term plan, a Kotak Life Insurance product, is a uniquely developed pure risk term insurance policy that provides financial security to your family and loved ones. It provides comprehensive coverage at reasonable rates and goes above and above to provide coverage to non-tobacco users and women at reduced rates. This policy provides coverage for persons up to the age of 75, with options such as life, life plus, and life security.
4. Exide Elite Term Insurance Plan
Exide Life Elite Term Insurance is a pure protection plan that is not connected, individual, and non-participating. This is a one-of-a-kind term life insurance policy that offers a large sum insured at a low cost. The Exide Life Elite Term Insurance plan offers a variety of death benefit payout choices, including Lump Sum, Family Income Payout, and Lump Sum plus Family Income Payout. This plan gives you the option of receiving a family income payment for 5 or 10 years.
5. PNB MetLife Mera Term Plan Plus
The PNB MetLife Mera Term Plan Plus provides the most comprehensive financial security for you and your family. It is a single-person, non-linked, non-par, pure risk premium life insurance policy. The plan is well-known for its feasibility feature, which provides complete life coverage at a relatively low cost. What’s remarkable is that you may select them as well as many extra and cover enhancing choices.
Wrapping It Up
Term life insurance is a simple and comprehensive type of insurance coverage that assists an individual in financially securing the future of their family and loved ones in the most cost-effective manner.
With the rise in inflation, a high-coverage term life insurance policy has become more of a need than a choice. Nowadays, a person earning an ordinary wage may provide his or her family with a greater sum insured amount of Rs 1 crore following his or her death.