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Top Features of Term Plans that You Must Know About

May 13, 2019 1548

For ensuring complete coverage of the future requirements of your loved ones, taking out a specific insurance plan is very essential. A traditional life insurance plan is the one that offers sum assured i.e. main plan benefits to the policy holder’s nominee(s) in the event of her/his demise during the policy term. In addition, there are extra maturity benefits in the event of the policy holder’s survival of the policy term. Therefore, there is a specific insurance cover and additional benefits in case of maturity of the policy term. In contrast to this, a term insurance plan only offers coverage against demise of the policy holder during the policy term and does not guarantee any additional benefits upon maturity of the policy term.

Following are top features of term plans that you must know about before investing in any term plan:

Economical cost of the plan:
A term plan is in fact, the cheapest among the various types of insurance policies that exist. The cheap rates of the term insurance plans make them essential as a core component of the insurance portfolio of any person. A term insurance plan is often considered to be the basic requirement of a successful insurance coverage and must be purchased by all investors.
Sum assured:
Sum assured is the total money to which the nominee(s) of the policy holder are entitled in the event of her/his demise during policy term. The sum assured covers the complete scope of coverage of the plan and defines the ultimate benefits for which the plan is being purchased. The sum assured must be chosen after due comparison with the specific needs and requirements and hence, must be the primary factor to be considered before purchasing the plan.
Ease of purchase:
These days, being on the online mode has ensured that there is increased transparency and accountability together with an increased ease of purchase of the plan. This not only cuts down on unnecessary hassles and unwanted complexities while processing the purchase-request but also ensures that there is a streamlined procedure that is followed while making the purchase.
Additional riders:
Every term insurance plan comes with additional riders that offer extra coverage against various contingencies like critical illness, accidental disability or accidental death etc. These riders come with added premium costs and offer extended coverage in addition to the main plan benefits. It is therefore, important for you to choose these riders after clearly checking your specific needs and requirements so that a complete financial coverage can be ensured at all times for your loved ones.
Flexibility in payment frequency:
The policy holder gets to choose when she/he can pay the premium amount that is due. The chosen frequency can be monthly, yearly or bi-annual. Various insurance providers also provide the option of a lump-sum one-time payment of premium which then entitles the policy holder to receive the benefits of the plan.

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ARN: ED/12/19/17049

Francis Rodrigues

Written By:

Vishal Subharwal

Reviewed By:

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