What is Term Insurance? - Make Money Online

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What is Term Insurance?

Term Insurance is one of the basic life insurance policy which covers an insured for a specific tenure and during that period if the insured diesthe sum assured will be paid to the nominee.

The cost of term insurance is lesser than permanent life insurance. The tenure for a term insurance is 10, 20 or 30 years.

Term Insurance could act as financial protection in case of death of the insured during the policy tenure.The sum assuredso received could be used for the expenses of the family needs.The family members can use this sum assured for daily living expenses, pay debts, education, etc. The payouts are tax-free. One must read all the clauses before purchasing a Term Insurance depending upon your requirement.

In some cases, coverage disability and critical or terminal illness is also offered. Term Insurance comes to the rescue, in case,the insured person dies or they are diagnosed with a critical illness during the policy tenure.

Various benefits of term insurance plan:

1)      Financial help:

Term plans are very much requiredand can prove useful in case of unfortunate death of the breadwinner. It provides financial protection to the family members in such cases.

2)      Affordable:

Term insurance plans are the most affordable type of life insurance policies. It is even lower when purchased at young age.

3)      Requisite coverage:

Term insurance provides sufficient coverage with a low premium. One needs to check all of its inclusions and exclusions in a plan before purchasing term insurance

4)      Low claim rejection:

The claim rejection ratio in a term plan is low as it is a pure risk coverage plan.

5)      Riders:

It is always better to purchase a rider along with life insurance, it ensures that your family gets a sufficient amount in case of demise. Riders can be obtained on top of our base policy by giving a few bucks more.

6)      Tax benefit:

Term Insurance provides tax benefits to individuals under section 80C of Income Tax Act, 1961.Also, the payouts are tax exempted under 10 (10 D) Income Tax Act, 1961

Procedure to apply for Term Insurance:

1)      Calculate your premium and tenure.
2)      Add a rider plan on top of your base plan to enjoy extra benefits. This could increase the amount a family would receive in case of death of the insured.
3)      Pay the premium amount by filling the form and submitting all the essential documents. Add details of your nominee
4)      Ensure to complete the proposal form as well
5)      Take medical tests if required

A person who hasfamily members financially dependent on them should definitely opt for Term Insurance. The minimum age to purchase Term Insurance is 18 years.Criteria for smokers and drinkers aredifferent. They are charged more because they have higher chances of suffering from chronic diseases and die unexpectedly.

Most insurance companies offer term insurance to NRI individuals. But there are few restrictions for unsafe countries wherein this facility is not accepted, otherwise for safer countries Term plan coverage is provided.

NRI’s can also purchase Term Insurance, they can visit and complete the formalities or they could even do via mail order business, which will be verified by some Indian diplomat.

Because of increasing inflation, it has become must for people to opt for Term Insurance plans with the highest sum assured under affordable premiums, so people prefer increasing their premiums or adding riders on top of their existing plans to ensure that their family members get sufficient death benefits in case of the unfortunate demise of the breadwinner.
What is Term Insurance? What is Term Insurance? Reviewed by RAWAT on 10:35 PM Rating: 5