A term plan is a type of life policy that offers death benefits for a certain period of time. If you pass away during the policy term, these benefits are paid to your nominees. Generally, term policies do not provide any benefits in case you survive the insurance duration.
Here are ten reasons why term plans are advantageous
1. Affordability
These plans are the simplest and most affordable types of life insurance coverage. You may choose the sum assured based on the amount of premium you are able to afford. The insurance company determines the death benefits based on your premium amount. These plans are the cheapest way to avail higher coverage without facing any financial difficulties.
2. Tax benefits
In case you pass away during the policy tenure, your nominees are eligible to receive the benefits. Your nominees do not need to pay any taxes on these benefits. This ensures they are able to use the entire lump sum amount to meet their financial needs.
3. In-built guarantee
The term insurance policy document legally binds the insurer to pay the benefits as per the conditions. However, you still have the flexibility to not renew the coverage or modify the policy type without incurring any penalties.
4. Cash leverage
Term policies offer a higher return on premium and give an opportunity to leverage a significant amount over a period of time. The benefits payable are substantially higher than the premium amount.
5. Timely payouts
Claims settlement period for term insurance plans is the shortest among all types of life policies. This is because term policies are simple and there are no disputes about claims since benefits are payable only on your demise during the duration.
6. Survival benefits
Traditionally, term policies offered only death benefits. However, these days, many insurance companies offer survival benefits. This additional rider plays a significant role in the return of the premium paid towards availing of a term policy.
7. Easy accessibility
There are several insurance companies that offer such types of life coverage. This increases the competition and provides easy accessibility when you choose to purchase such a plan.
8. Return on investment
When you buy a term policy, you know the exact benefits available under the plan. This reduces your investment risk and provides transparency, thereby making such policies one of the best options available in India.
9. Health conditions
The insurer will take into consideration your overall health condition to determine the premium amount. However, if your health condition deteriorates after purchasing the plan, it does not affect the policy terms and the premium amount.
No comments:
Post a Comment