7 Facts About Term Insurance Policy That Will Blow Your Mind

Introduction

Term insurance plan is a pure life insurance plan which gives you an option of buying life insurance in the most economical way. It is called as a pure life insurance because it provides cover against death only, without any investment and saving options. The key feature of Term insurance policy which sets it apart from traditional policies is its affordability. You can get a very high cover with the lowest premium rates available, only through term insurance policy.

In addition to affordability, there are many flexibilities and benefits provided with term insurance policies. But still many people are not aware about these facts about term insurance policy.

So, let's look at these 7 facts about a term insurance policy that will blow your mind: -

1.You can choose your policy term

Term insurance policy gives you the option to choose your term plan. You don't need to pay premiums for your whole life. You can choose a term insurance policy for 10, 15 or 20 years and pay premium for the selected policy term only. This feature of term insurance policy makes it a risk management tool against debt and loan also. You can choose a policy term, according to your years of loan and minimize the risk easily.

2. Most economical way to get life insurance

In comparison to traditional life insurance, term insurance plan is the most economical way to get life insurance. You can get a cover of 1 crore at a premium rate of less than 600 per month. Low premium rates are available in term insurance plan because it gives cover against death only and so the area of insurer's responsibility towards insured person is limited. Term insurance is the best option for people looking to buy life insurance on a tight budget.

3.You can get your premiums back

The major disadvantage which people consider with the term insurance policy is no return upon survival. If the insured person survives the policy term, he gets no return because the term insurance policy has no saving and investment options. But a term insurance plan with return of premium (TROP) has removed this disadvantage of term insurance plan. In TROP, if the insured person survives the policy term, then all his premiums are returned (amount of premium returned vary from company to company).

4. Option of convertibility and riders

Our need is not always the same. With changing circumstances, our needs also change. To fulfill the changing needs of the insured person, term insurance plan comes with an option of convertibility. This convertibility feature of term insurance plan gives you an option to convert your existing term insurance plan into a permanent insurance plan during the policy term.

There are also many riders available with term insurance plans. You can add these riders to get extra cover at an additional cost. Some of the riders available with term insurance policy are:-

-Accidental death benefit rider

-Critical illness rider

- Waiver of premium rider

- Permanent or partial disability rider

5. Receive death benefit as monthly income

If you don't wish to receive the death benefit at once, then with term insurance plan you have the option to receive the whole death benefit as monthly income. You can also choose to receive a portion of the death benefit at once and rest as monthly income.

6.Buying online term insurance is easy and cost-effective

Buying term insurance policy online has a lot of advantages over offline purchase of term insurance policy. The procedure of buying online term insurance policy is very easy as it requires no paperwork and less documentation. Online term insurance policies have the advantage of cost effectiveness also, as online term insurance doesn't involve any commission and the rates offered are also very low.

7.Cover enhancement

During the policy term in term insurance plan, you have the option to increase your cover at critical stages of your life like marriage and turning into parents. The percentage of increase in cover varies from company to company.

Term insurance policy doesn't only provide you an economical option to buy a life insurance policy, but it also gives flexibility with bundle of benefits. A term insurance policy can do wonders to your financial planning if you customize and choose it well.