What Advantages Does Your Term Insurance Plan have Over Other Types of Insurance?
Published On Sep 26, 2021
Table of Contents
A term insurance plan offers assured benefits to the dependents of the policyholder upon his untimely demise during the plan tenure. Although a general insurance plan may be advantageous for some individuals, in many cases, investing in a term insurance policy is better as compared to doing investment in any other insurance plan. Some of the advantages that the policyholder would enjoy under a term insurance plan are as follows:
Lower PremiumA policyholder can buy a term insurance policy at a lower premium rate in comparison to any other form of life insurance plan. It is one of the significant advantages that a term insurance plan has over kinds of insurance plans. With the rise in inflation rate, the pressure to handle the responsibilities while at the same time maintaining the quality of one’s life and health is a very big task. With that being said, in case insurance plans ask for high premiums, then it adds further to the pressure. Thus, policyholders who do not wish to purchase insurance plans with high premium rates find term insurance plans more convenient.
Beneficial for Young Insurance Plan BuyersThere are fewer risks associated with life for a young individual in comparison to an old person. Thus, it is not wise for them to do investment in high premium plans for their entire life from a very young age. However, with the increase in lifestyle related diseases, even the young individuals are nowadays subject to various health risks. Therefore, it is only smart to have an insurance plan as a precautionary measure. The best fit can be a term insurance plan as they are for a fixed period and are also quite affordable.
Reasonable ReturnsOther than offering lower premium rates, a term insurance plan provides higher return as compared to any other life insurance policy. This can be because other life insurance policies provide the advantages of life cover even when the insurance plan matures. Thus, in order to provide compensation for the enhanced benefits, the rate of premium is kept very high. However, when we talk about a term insurance plan, it can be claimed only when the policyholder dies during the plan tenure. Thus, mostly a term plan does not offer any maturity benefits, however it offers high death benefits in exchange for low premium amounts.
Return of Premium OptionThere are certain term insurance plans that offer the unique feature of return of premium in the form of maturity benefit. This feature is exclusive to only these groups of term plans as in any other form of term insurance plan, the paid premium is not returned to the life assured in any case. To state simply, in case the policyholder survives the plan duration then they would get the paid premium as the maturity benefit of the plan.
Individuals, who are looking for short term financial protection of their loved ones, can consider purchasing a term insurance plan. Moreover, individuals who want to purchase an insurance plan but do not want to pay high premiums can also count on a term insurance policy.
Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.