A person may weave a variety of financial objectives throughout their life and perform the calculations to construct financial plans relying on them. However, life is unpredictable. Not only can an unexpected death jeopardize these aspirations, but it can also leave your family stranded. Though no amount of money can replace the loss of a loved one, term life insurance can financially safeguard your family in your absence. Below, you will get to learn about what is term life insurance and what its benefits are.
What is Term Insurance?
If you're wondering what is term life insurance, you've come to the right place. A term life insurance policy is a type of life insurance that covers policyholders for a certain pre- determined period. If the policyholder passes away during the policy term, the nominee receives the insurance proceeds in a lump sum. Unlike traditional, money-back, or market-linked life insurance policies, a term insurance plan does not give maturity benefits, but it does provide significantly more coverage for a lower premium.
Benefits of Term Life Insurance
If you are still wondering what is a term life insurance policy, then take a look at the following list of term life insurance advantages to understand it better:
Your term insurance premium covers the cost of insurance. The most notable feature of term plans is that you may get large amounts of life insurance for very modest costs, sufficient for your needs. Furthermore, premiums for young applicants are lower and stay constant during the insurance term.
Many people wonder what is term plan and its sum insured benefits. In the event of the insured person's untimely death, the death benefit would be paid to the nominee. The policyholder has the option of opting for a lump sum, a monthly or yearly income, a mix of lump sum and income, or a growing income at the start of the policy. It will assist with financial necessities, as well as home bills and other charges.
Critical Illness Coverage
Severe illnesses can arise at any point in your life, and the expense of treatments could empty your whole savings. Although life insurance is the main benefit of an insurance policy, you may add critical illness coverage by purchasing riders. You will get a lump sum payout under the Critical Illness cover if you are diagnosed with acute diseases covered by the insurance. This coverage helps you to pay for necessary treatments without draining your bank account. Riders are not mandatory and available at an extra cost.
Accidental Death Benefits
In your quest of finding the answer to what is term insurance, you will come across Accidental Death Benefits. You may add the Accidental Death benefit to your term insurance policy. If the insured person dies in an accident, the payout will be enhanced with an accidental death benefit. It will protect against future mishaps. It's important to remember that the basic sum assured will be paid even if the insured's death is caused by something other than an accident. However, these benefits in the form of riders are not compulsory and comes at an additional price.
Terminal Illness Cover
Many term insurance plans provide accelerated death benefits, which allow policyholders diagnosed with a terminal disease to collect a part of their death benefit while still alive. If the unthinkable occurs and you are diagnosed with a terminal disease, you will be granted a lump sum payment that you may use to cover any expenditures.
Term insurance policies provide financial protection for the entire family in the event of the policyholder's untimely death. Optional coverage for severe diseases and accidental death is also available. However, after you find out what is a term life insurance policy and consider all of the advantages, keep in mind that the primary goal of insurance is protection, not profits.
Tax benefits are as per the Income Tax Act, 1961, and are subject to any amendments made thereto from time to time
The article is meant to be general and informative in nature and should not be construed as solicitation material. Please read the related product brochures for exclusions, terms and conditions, warranties, etc. carefully before concluding a sale.
Make responsible financial decisions. Consult with your financial advisor before making any decisions on insurance purchase.