Why Term Insurance is the Smartest Choice for Those Looking for Life Cover?
Updated On Jul 21, 2021
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People have gradually started to understand the significance of getting a life insurance policy. With the pace of life quickening and uncertainties increasing by the day, every family requires a life insurance policy to help them financially cope with losing a loved one. This is why insurers are developing policies that fit the needs of a wide range of people and satisfy the rising demand for life insurance. However, selecting the best plan in such a volatile world can be challenging at times. Thus, a term insurance plan is regarded as the most appropriate option for the public to keep things simple. Let us learn more about the benefits of a term insurance plan.
Why is Term Insurance Plan the Smartest Choice?
Here are various reasons why term insurance is regarded as one of the most popular and cost-effective life insurance options.
The death of the family's breadwinner or any other earning member might throw the surviving family members' lives into disarray. Managing home finances and providing for the family's basic requirements becomes incredibly challenging in this situation. This is the primary reason why individuals get any type of insurance. Term life insurance pays out the entire sum assured at the time of death, making life monetarily simpler for the surviving family members. Moreover, depending on where you are in life, it is recommended that the coverage should be increased with time. For instance, having a higher cover once a child arrives is beneficial.
Term insurance plans provide high coverage at premiums that are affordable to the majority due to the lack of maturity benefits, investment opportunities and other complexities. Moreover, since there are no brokers or intermediaries when you buy life insurance plans online, the premiums are considerably lower.
Term insurance policies give you a lot of options. You can choose between an online or offline plan, and many insurance companies don't even require a health check-up until you've purchased a specific policy. Though changing plans throughout the term is tough, you can easily switch to a new plan if the necessity arises. Moreover, a term insurance policy can be easily personalized according to your needs, wishes and wants. For a small additional premium, you can add riders like accidental death coverage, critical illness coverage, and waiver of premium, among others which ensures that you get the most out of your term insurance without breaking your back.
Having a loan of some kind or another is quite common these days. However, if you die before repaying the instalments, the burden of your loan repayment obligations can fall over your ageing parents, spouses or dependent's shoulders. This can lead to a financial crisis. Here, a term insurance plan comes in handy. Your home loan, car loan, student loan or any personal loan can be paid through the revenues from the term insurance policy and ensure that these debts do not burden your family.
Return of Premiums Option
A pure term insurance plan solely provides life coverage to the beneficiary in the event of the life insured's untimely death. When it comes to maturity, it has no advantage. However, you can earn a maturity benefit if you choose the return of premium option on a term insurance plan. This option will require paying higher premiums, but if you survive the insurance period, you will receive a return of all the paid premium instalments. However, it must be noted that the taxes, rider premiums, levies and the modal amount paid on the premiums are not included in the total premium amount that is to be repaid.
A life insurance plan is a vital component of a well-rounded financial strategy. Some life insurance plans, however, have exorbitant premium charges that not everyone can afford. Term insurance provides a significant death benefit for a low premium. After considering all of the abovementioned factors, it is safe to conclude that a term insurance policy is far more beneficial than other options.
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.