What Is Term Insurance?
Term insurance is a life insurance policy that provides financial protection to your family for a specified period of time or "term" of years. A death benefit is paid out to the nominee if the insured dies during the term of the policy. Term insurance plan gives you a high life cover at affordable premium rates.
Getting Started with Term Insurance
Due to a plethora of insurance options available in the market, a majority of customers tend to overlook the simplest type of insurance. Being the simplest form of insurance, term insurance provides life cover to the policyholder and offers financial security to his/her family. The idea behind term insurance is the protection of the policyholder and his/her family as it ensures that the family is sound and secure, even in the policyholder’s absence
Before purchasing term insurance, understanding the basics of term insurance policies is a must. Knowing the benefits and the working of term insurance makes sure that you make informed decisions at the time of purchase. Hence, go through the working of term insurance mentioned below:
How Does Term Insurance Plan Work?
Amongst other life insurance policies, a term plan is the most affordable means for the long term security of your family. When one opts for a term policy, the nominees are eligible for a death benefit in case of an unfortunate event of death of the policyholder. This death benefit can help them lead a stable lifestyle even without the presence of the policyholder. For instance, let’s suppose that a policyholder has a term insurance cover of Rs. 1 crore, for a policy term of 35 years. If the policyholder dies within these 35 years, the insurance company will pay out the entire sum of Rs. 1 crore to the beneficiary/ nominee of the policyholder, subject to policy terms & conditions.
In case, he/she survives the policy term, the plan will expire, and no benefit will be given out either to the policyholder or his/her dependants.
Once you learn the basics about this policy, you’ll be able to figure the type of term insurance you want to opt for. Let’s look at these benefits of investing in a term plan mentioned below: