How Term Life Insurance is a cut above as compared to other life insurances?
What is life insurance?
Whenever we hear this question, we tend to think about something that will provide our family with some monetary benefit after our death, but for that, we will have to pay costly premiums until we die. This is neither incorrect nor correct; instead, it is partially right. With time, everything has evolved, right from our lifestyle to our way of thinking. We now live in a modern era with smarter gadgets, and with this, our traditional life insurance policies have also been modified as per the requirement of the present times
Term Life Insurance is a modern form of life insurance. It has different benefits as well as limitations as compared to other life insurance policies. It is more flexible, affordable, and an ideal product for every single breadwinner of the family.
|1||Benefits and limitations of Term Insurance.|
|2||Different riders that make a Term Plan even better.|
|3||Premium Price in Different Age and Different Coverage Amount|
|4||Tax benefits from Term Insurance Policy.|
Let us discuss the essential features of Term Life Insurance that make it a better life insurance policy and parallelly we will also analyse its limitations:
- Flexibility: Term Life Insurance is a hugely flexible insurance plan as it gives you the freedom to change its policy duration, coverage amount, premium amount, premium frequency, and length of the premium payment period. You might not get this malleability in other life insurance plans, which makes Term Life Insurance a step ahead to other insurance policies.
- Elementary and straightforward: It is the purest form of life insurances because it doesn’t provide you with any investment feature and does not guarantee any maturity benefits as well. It works on simple math that is you pay premiums for a particular period of time, and you get covered for a fixed number of years. In case of your untimely demise, your family receives the monetary benefit, or the insurance coverage amount that is being decided when you buy the policy.
- Thrifty and Reasonable Premiums: Term Life Insurance has the most affordable premiums associated with death benefits. If you buy a term plan in your late twenties or middle thirties, then you can get premiums as low as ₹28 per day that too for an insurance cover of ₹2 crores. Isn’t it great?
Following table demonstrate the average price of term insurance as per your age:
|Age / Insurance Cover||₹50 Lacs||₹75 Lacs||₹1 Crore|
|25 Years||₹ 14||₹ 19||₹ 21|
|35 Years||₹ 17||₹ 25||₹ 27|
|45 Years||₹ 30||₹ 46||₹ 54|
|55 Years||₹ 46||₹ 67||₹ 85|
|65 Years||₹ 73||₹ 108||₹ 142|
The above table shows the average amount of different cover values to varying ages that one needs to pay per day.
Here you can see, someone in the initial stage of his/her career who is willing to add on Term Insurance plan in his/her financial kitty, then it is as affordable as ₹21 per day.
The limitation here is increasing premium amount with age, which means if you buy a term plan in the later years, then you will have to pay higher premium costs for a similar policy.
So, it is advised to buy a Term Life Insurance policy as early as possible to avoid high premiums.
- Customizable as Per Requirement: As we know that, Term Life Policy is very much flexible, and we can anytime modify it as per our requirement in terms of policy coverage and premium payment. There’s one more option of adding riders to your term life policy. Riders are add-on benefits, which increases the value as well as the benefits of your term plan with a little extra cost over the premium amount.
Following are the five of most popular riders:
|1||ADDB Rider||Accident and Accident Disability Benefit Rider (ADDB) provides a claim in case of death or disability due to an accident.|
|2||Critical Illness Rider||If you have a medical history, then you must add this rider to your policy because it covers almost every critical illness.|
|3||Waiver of Premium Rider||In case of some mishap with policyholder resulting in bed rest, this rider helps with the waiver of the premium amount until the time you are healthy again.|
|4||Child Term Insurance Rider||A rider specifically for your child, this provides an additional benefit to your child to a fixed age.|
|5||Family Income Benefit Rider||This is also an additional benefit over the coverage amount, which gives your family regular income for a fixed period of time, so that they can manage their finances efficiently.|
- Other Benefits: There are several other benefits of Term Life Insurance that includes Tax benefit. As per the Income Tax Act under section 80 C, you will get tax benefits on the premiums paid for term life insurance. Also, in case of the sudden demise of the policyholder, the death benefit amount is tax-free.
Apart from a tax benefit, the term insurance plan gives you mindfulness because you always have a backup plan for your family in case of any uncertainty. It is pocket friendly also, so it doesn’t come in between your savings and financial planning.
So, the crux of this article is that the term insurance plan is an essential life insurance plan which provides exceptional benefits at affordable premiums.
If you are also planning to buy term life insurance, then you can visit BimaKaro.in, compare and customise your term plan as per your requirement.