Our life is our most precious possession and hence we need to ensure that it is protected to the fullest. We may take care of our lifestyle and health in order to protect our lives but unfortunately it does not control our life span. Regardless of our income when we are alive, we have no control on what the future holds for us. That’s when a term plan helps to insure our life term.
A premature death due to a sudden illness or an accident could have a devastating effect on your family members not just emotionally but financially too effecting their household expenses and maintaining their standard of living, especially when you are the sole breadwinner of the family.
Even with the multitude of savings based, profit sharing and market linked insurance plans available, it is imperative to have a term insurance plan which covers your life in the purest form of insurance; one which provides a guarantee that if something happens to you, your loved ones would not have to bear the financial loss as well.
So, let’s understand a few benefits of a term insurance policy:
Simple and Pure:
As compared to plans which combine risk cover with savings or returns, which is difficult to understand, term life insurance policies are the essence of simplicity where you just pay the premium and get your life covered for the chosen term.
In its purest form, the premium paid on these policies are only for covering the risk and no part of it being invested on his behalf as savings, which leaves the policy holder to decide other saving options as per his own choice.
Being structurally similar between the policies offered by different insurance companies, the pricing of these policies are simple to understand and hence can be easily compared with each other.
Being very open with hardly any riders attached, buyers of such policies find no information deficiency issues and thus making such policies very price competitive for the consumer.
For those who miss out on being insured due to the high cost and premium of endowment policies, term plans offer the same cover for hardly a fraction of the premium cost.
Flexibility of cancellation and renewal:
Since there is no savings and returns involved, ending a term policy is the easiest; just stop paying the premium and the risk cover ceases with the end of the policy.
Most of the term policies also have the option of renewal at the end of the first term without any medical check-up and some even have the facility of converting it into endowment plans.
Like any other insurance plans, term policies also offer tax benefits under section 80C. Further, since the premium amount is much lower as compared to other plans, it leaves you with the option of investing the additional amount as per your choice.
Term Plans with an option:
If I were to tell you that there is a term plan which provides you extra options, would it not be exciting.
Aegon Life Insurance Company, a joint venture between the Dutch Insurance Company Aegon NV and the Times Group, one of India’s largest media conglomerates, has a term insurance plan which provides life cover to the family of the deceased and also offers pay-outs that act as income benefits.
The features of this policy include advantage of covering two death options, either 100% payout in Option-1 or 50% payout in Option-2 and ensuring regular monthly payout equal to 3% of the cover amount for a period of 5 years. With life cover available up to a prime old age of 75 years, it has an inbuilt accidental cover to the extent of 100% of the cover amount subject to a maximum of INR 1 crore.
Ensure that your family sustains and maintains the same life style even in case you are not around, with a Term Plan to insure your Life.