Throwing A Little Light On Term Insurance

Arjun is a happily settled man with a beautiful family to look after. His kids are brilliant and talented. Arjun is blessed to have a very supportive wife who was there for Arjun throughout his endeavours. Arjun has got the family which people see in movies. You must be thinking about what possibly can disrupt this beautiful household. But one tragic morning, Arjun dies of a sudden cardiac arrest. After his sudden demise, his children and wife faced many hardships as the emergency funds Arjun saved weren’t enough. 

Well, Arjun’s story didn’t have a happy ending, but your story can. Arjun made the mistake of not getting Term Insurance which made his family suffer. If you are wondering what Term Insurance is, continue reading the blog to understand what exactly Term Insurance is.

What is Term Insurance?

Term Insurance is a life insurance policy that provides coverage for a certain period or a specified “term” of years. Term insurance insures a person. If the insurance holder passes away unforeseen, then the insured amount is paid to the nominee. The nominee is usually a relative or closes one of the insurers. They are also the direct dependents of the policyholder. The insured amount or death benefit can be collected in either a lump sum or monthly instalments for a specific period. 

For example, for a sum insured amount of Rs. 25 lakhs, the beneficiary can opt for a lump sum payout or monthly instalments for 10 or 15 years.

Types of Term Insurance

To choose the best Term Insurance for you according to your needs, it is crucial to know different term plans. Commonly there are five kinds of Term Insurance plans, they are:

• Convertible Term

A convertible Term Insurance plan is a policy that can be converted into another type of insurance plan at a later stage. If you expect your financial priorities to change in the coming years, you can opt for this type of term plan. The primary benefit of convertible insurance is that the policyholder doesn’t have to submit to a medical exam when the term policy converts to permanent insurance.

• Level Term

In this type of plan, the sum assured selected at the beginning of the policy remains constant throughout the policy term. The younger you are while buying a level term plan, the lower will be the premium. It is the most common type of Term Insurance.

• Increasing Term

This plan offers you to increase your promised sum at specific points in the policy term. The rate of the increase is fixed. This plan is an excellent choice for keeping up with inflation and ensuring that your family has enough funds to sustain after. An increasing term policy is best suited for you if you have a considerable rise in your financial liabilities in the future. The tenure for this kind of term plan is usually more than that of other types of Term Insurance.

• Decreasing Term

Opposite to increasing term insurance, the sum assured decreases at a fixed rate as your age increases. It works on the idea that as your age increases, your liabilities might decrease. Hence, the need for a higher sum assured too might decrease. If you have taken a loan or a mortgage and expect to pay it off shortly, this is best for you.

• Annual Renewable Term

Annual renewable term life insurance provides one year of life insurance coverage, with the option to renew after 12 months for another year of coverage without having to take a medical exam or provide evidence of insurability. 

Conclusion 

A Term Insurance is very beneficial and comes in handy in case of the unpredicted demise of the primary provider of the family. Getting Term Insurance will ensure that your future liabilities like your child’s education, the daily expense of your family, and loaned debts are all taken care of in case you leave. The sudden passing away of a closed one is already a heavy emotional suitcase to carry, by getting suitable life insurance, your family at least doesn’t need to go through financial suffering. Choose a Term Insurance plan today to secure your and your family’s future.