Features of Term Insurance Plan - You Need to Know Before Buying

Insurance serves as a basic and essential tool for your overall financial benefits and the future coverage of your family. A term insurance plan is the one that entitles a policyholder's nominee(s) to receive the sum assured i.e. the main plan benefits in the event of the policy holder's demise during the policy term. Although a traditional term plan does not offer any maturity proceeds i.e. the policy holder is not entitled to receive any monetary benefits in the event she/he survives the policy term, yet because of being the most economical and essential option, term insurance plans feature as credible parts of any successful financial portfolio. As a responsible provider of your family's needs, you must invest in a suitable term insurance plan and thus secure your family's future.

Before investing in a term insurance plan, you must keep in mind that a suitable term insurance plan has certain features that must be duly checked before deciding to make the purchase.

Following is a list of important features of a term insurance plan that must be kept in mind:

1. Sum assured:

   The sum assured is the total scope of coverage that is offered by a term plan. The sum assured that is offered by a term plan must be totally sufficient that can ensure complete coverage for your family's needs, even in your absence. In fact, sum assured is the basic parameter on which depends the overall investment that you will make in the form of payable premiums.

2. It must take inflation into account:

   Inflation is the general increase in prices of commodities and services over a period of time. Since a term insurance is a futuristic platform for your financial coverage, therefore the scope of coverage that it offers must take into account the inflation and the corresponding rise in prices over a period of time. This will ensure that due corpus for your family's needs has been created by the time of actual requirement.

3. Flexibility of disbursal:

   An ideal term insurance plan must be flexible enough to ensure that the accrued benefits are paid to the nominee(s) as per their convenience and choice. In simple terms, this means that the accumulated benefits can be either disbursed as a lump-sum one-time payment or in the form of regular monthly pay-outs that suit your family's needs as and when required.

4. Term of the plan:

   The term of the plan must be chosen carefully as this will also directly impact the corpus that will accumulate by the time of requirement. In fact this is the reason why taking a timely decision is important as you get the benefit of time on your side and get the full advantage of investing on a regular basis for creation of the fund-corpus.

5. Payable premiums:

   The due premiums that you will have to pay to the insurer must be as per your budgetary allocations and must suit your needs and requirements. Affordability of the plans and any additional riders is therefore, very essential.

HDFC Life offers HDFC Life Click 2 Protect 3D Plus an online term insurance plan that has been formulated for keeping your finances secure in the event of any unforeseen  circumstances due to death, disease or disability.

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