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Buying a Term Insurance Plan is the most Economical Way

by Harjot Narula Compare Policy Insurance

Most of the people don’t go for a life insurance plan because they see it in their list of expenses and they don’t find it as a cost effective way to spend money. People want return to be higher than every single penny spent and that’s the reason why low premium and high coverage are the keywords while searching and comparing different  Insurance policies. For such requirements, Term insurance policy fit like a glove in your financial plan.

Term Insurance is a traditional life insurance plan which acts as a financial protection for the family of the life insured in case of his death within the term policy. It gives the sum assured or what we can say death benefit on the demise of life insured to then nominees.

Following are some of the special features which make term insurance as the most economical way to get protection for your loved ones: -

Low Premium, High Coverage

Term Insurance Plan comes with low premium because it is a pure form of insurance which serves its sole purpose-“protection against risk of life” with no return on investment and maturity benefit. Not only low premium rate, but on comparison with other plans on the basis of high coverage, you will find Term Plan at the top of your preference list. With Low premium and higher coverage than other plans, it becomes an economical option of insurance.

Flexibility  

Term Plan comes with the flexibility to customize your plan with different options which contributes towards making term insurance policy an economical option.

 Following are some of the flexibility features for Term Insurance Policy

  •  Choose your term

You don’t have to go for a lifetime coverage in this plan. You can choose your term policy like for 10, 15, 20 years and pay premiums according to your chosen plan which makes term plan availability for people with a low financial budget also. This flexibility option also helps in risk management against the loan taken for a long period of time.

  •  Convertibility

You don’t have to stick to the term insurance plan during its period if your needs changes. You can convert your term insurance plan into regular life insurance policy easily. But the availability of this feature is only available if premiums have been paid on time and you have been following the conditions of the policy. In the same case, you don’t need to go for any extra screening while converting your term insurance policy into a permanent insurance policy.

  • Coverage enhancement

There is also an option to increase your coverage by a specific percentage of the sum assured (as mentioned in policy guidelines) during important stages of your life like marriage or turning to parent. Like some insurance policies offer 50% increase (percentage of the sum assured) on cover when you get married, 25% increase (percentage of the sum assured) on first baby and same on the second baby.

  • Reduce additional coverage

Some term insurance plan gives you the option to reduce your additional coverage which reduces the premium also after a certain age. For example, Govind bought a life insurance plan when he was young and he added additional coverage on critical stages of his life. But now Govind is 46 years old and his two sons are well settled and he feels like he doesn’t need additional coverage anymore, then he can reduce additional coverage and enjoy low premium.

Premium according to age

At a young age, we don’t have that much financial budget to pay high premiums, but term plan comes with “premium according to age” feature which means lower the age, lower are the premium. For example- If Ramesh (22 years) and Nitini (28 years) go for a term insurance plan, then premium of Ramesh will be less than Nitin. Premium in term plan is based on the current age of the insured person.

Tax Benefit

Term Plan gives you a tax benefit on the premiums paid under section 80C of the income tax act which makes it a tax saving tool also.

With such flexibility and benefits, going for a term insurance plan will always remain as one of the most important steps towards securing future of your loved ones in the most economical way possible.

 


About Harjot Narula Innovator   Compare Policy Insurance

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Joined APSense since, June 13th, 2016, From Noida, India.

Created on Dec 31st 1969 19:00. Viewed 0 times.

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