For a good period of time, public-sector insurance companies dominated the industry for term insurance plans. However, in recent times, standardization followed by the digital boom in the insurance segment brought about major changes for good. Now, you will find that many private insurance companies have included term insurance plans as a part of their offering.
In this piece, we will look into what term plans are and how to choose the right one to secure the future of your near and dear ones, thus ensuring complete peace of mind.
Everything You Need To Know About Term Insurance Plans
A term insurance plan offers to cover you for a particular period or a defined “term” of years. The premiums for such plans are lower compared to endowment policies since it is a pure risk insurance product, which means that the benefits are only payable on your demise during the policy period to your nominees and nothing is paid on surviving the defined policy term.
The features of term insurance plans are as under:
- Flexible Policy Term: One of the main benefits of such policies is the flexibility it provides in its duration. You can opt to be covered for as little as a year and as long as 40 years or till age 80 or even more.
- Death Benefit: In the event of your demise during the policy term, your nominee will be paid the sum assured.
- Low Premiums: When compared to other life insurance plans, the premium for term insurance plans is reasonably low.
While determining the premiums, the insurance company will take into account the cover amount, your age at the time of policy purchase, your current annual income and the policy period.
How is term insurance different from other life plans?
Life insurance policies can be availed in various forms – endowment policies, unit linked insurance plans or money back policies. Such plans are basically investment plans where a lump sum gets paid to your nominee in the event of your demise or offer you a maturity benefit if you survive the policy tenure. Term insurance, on the other hand, is purely a death benefit plan which pays out the sum assured to your nominee if you pass away during the policy period. Should you outlive this period, the insurance provider is not going to pay any survival or maturity benefit.
Riders offered in term insurance:
Several term insurance plans come with extra benefits referred to as riders, which can enhance your coverage. Riders can be opted on your base policy for an added premium. Below are some of the riders that are offered with term insurance:
- Accidental Death Benefit Rider: In case an accident results in your untimely death, you nominee stands to get added benefits in the form of additional sum assured.
- Waiver of Premium: You will not be required to pay future premiums if you become permanently impaired. In case the life insured and proposer are different, all future premiums are waived off in case of death of the proposer under this rider.
- Critical Illness: During the policy tenure, if you suffer from any of the listed critical illnesses, the insurance company will pay an amount equivalent to your chosen sum assured.
How To Buy Term Insurance Plans?
Term insurance plans can be purchased through the official website of insurance broker, Coverfox in just a few clicks. All you need to do is enter a few personal details like age, gender and mobile number and then click on View Quotes. For better results, it is recommended that you mention your smoking habits, annual income, and policy period. This will enable the broker to assess your needs better and accordingly fetch policies that match them.
When you compare policies of different insurance companies, make sure to take into account the premium rates, features, claim settlement ratio and average time taken to settle claims. Although premiums do play a huge role in determining your policy choice, it mustn’t be the sole criterion for selecting an insurance policy. Take into account the features that you are getting for a particular premium rate. Another very important factor to be considered when you compare different policies is the claim settlement ratio. Look for those insurance companies that have a high and consistent claim settlement ratio as such insurers are reliable and can be trusted for claim payment.
To find the most suitable term insurance plan, get in touch with Coverfox’s customer support team by dialling 022 6179 2900. You can also visit the company website to compare all the insurance policies offered by the leading players in the industry and buy the plan that fits your insurance needs and budget.