The importance of having a term insurance plan is that it can be a great financial help to keep a family well maintained as it has different features and benefits that will help in difficulty.
About Term Insurance Plan:
Term Insurance is basically a life insurance product which is offered by an insurance company to provide financial coverage to the policy holder for a specific time period. If the insure person dies during the policy term, and then the death benefit will be paid by the company to the recipient. Term insurance plans are very much desired in the life insurance market and the great benefit is that these plans offer higher sum assured amounts at a very low premium rates. A sum money or death benefit is paid to the heir or nominee in case the policyholder dies during the period for which the policyholder is insured. The policyholder can also get various options to get improved protection; there are some term plans available in the market those give protection to the policyholder as cash payouts on diagnosis of critical illness.
A term insurance plan is necessary for everyone either the person has dependent family members or has pending debts to clear. It has high sum assured levels and also low premium rates that makes it an edge over other insurance plans in the market. The payout of this policy helps to keep secure the beneficiary of the life assured continues to lead the previous lifestyle even after the policyholder is no more. But before buying a term insurance cover, it is mandatory to take care of some elements to buy the best plan with best benefits.
Facts to consider before buying a Term Insurance plan: There are a huge number of term insurance policies found in the market so it become little difficult to find the best-suited policy for a person. Here are some important points to know before buying a term insurance plan:
Sufficient Coverage Amount: The coverage amount for a term insurance plan should be the first thing that should be looking after by a person before buying a policy. The payout from the policy is expected to act as a way of financial help for the life assured’s family, if and when the unplanned disaster takes place. So it is better to buy those term policies that come with high sum assured levels such as 10 to 20 times the current annual income.
Policy period with longer time: The duration of every policy of a life cover is known as the term of policy and it is said that one settles for a term policy that offers longer period of coverage. So it is always better to buy a policy at an early age with a longer duration so that low-cost premium benefit can be get till the retirement age come.
Affordable premiums: The cost of the term insurance is a crucial thing as premiums can differ from one term insurance policy to another. So an applicant should not only look for lowest-costing plan but also find the premiums must go easy on pockets.
Additional covers: There are some add-on benefits which are added with the base policy that help to expand the insurance coverage but they may not be the part of the basic insurance cover.
Some Term Insurance Riders or additional covers: Riders are known as extra benefits that can be added with the base term plan that will add a financial cover over the basic sum assured.
Critical Illness: It helps an individual to get a huge amount on diagnosis of some critical illness like paralysis, stroke, heart-attack etc. The sum assured of this rider shall be payable on the first diagnosis of anyone of the covered critical things.
Accidental and Permanent Disability: It pays a big sum amount to the policyholder if the person becomes disabled due to an accident; as the individual will be unable to continue employment, the payout can be used to maintain daily expense.
Accidental death: Here an extra sum assured is paid to the nominee of the term insurance policy if the life insured passes away for any accident.
Waiver of premium rider: This kind of rider takes care of term insurance premiums when the life assured suffers critical illness or disability for an accident. It keep the premiums of a insurance running while the policyholder become unable to pay.