Today, everyone knows the importance of life insurance plans. Yet, when it comes to details about the different options, there are some doubts everyone seems to have. For example, the benefits of term insurance are plenty but some people may not still know how this policy works. Simply put, term insurance is a life insurance cover. When you buy term insurance, you get life insurance cover for a certain number of years. If the policyholder dies before the tenure of the policy ends then the sum assured is paid to his or her beneficiary. If the policyholder survives the policy tenure then no money is paid.
If you buy term insurance, you financially secure the lives of your loved ones after you are no more. The choices are plenty when it comes to selecting the right policy for you. You should check out the term insurance benefits before making any decision.
Benefits of term insurance
As term insurance is a pure life cover, it does not come with any savings option. This is why the term cover is cheaper to get and provides you with the security of a larger cover. There are four-term insurance benefits, which you must know about.
1. A larger cover
The term cover is cheaper because it does not come with any other benefits apart from life cover. No payouts are made if the policyholder survives the length of the term. For this reason, the term insurance requires you to pay lower premiums when compared to the other categories of life insurance. If you are currently a 30-year old policyholder then you can buy term insurance with a tenure of 30 years and ensure that your family gets a cover of INR 1 crore. This will not cause you to cut your savings into half every year while paying the premium.
2. Adding riders
In terms of policies, a rider is an add-on that you can attach with your term insurance. When you buy term insurance, you can include a critical illness rider and enhance the policy. If you add the critical illness rider then you will receive the sum assured if you are ever diagnosed with the illness. This comes in addition to the death cover the policy already has. However, this is not the only rider you can add. There are the disability, unemployment, and other riders too. You can add a rider that you think benefits you the most and get the benefits during the tenure of the policy.
The term insurance cover can be enhanced during the tenure. With time, as your income grows and you can afford higher premiums, you can opt for enhancing the cover to make the future of your family even more secure. You can enhance the cover when your family grows too. Once you get married, you have the opportunity to enhance your policy by 50% and when you have children, you can enhance your existing life cover by 25% by paying higher premiums.
4. Special features
It is very common to have innovative features added to life insurance policies. When you buy term insurance, you will have the benefits of some great features too. One of the best features you can get on top of term insurance benefits is the discounted premiums if you are a non-smoker and do not consume alcohol. This surely makes it more profitable for you when you buy term insurance.
Finding the right term insurance to meet your needs is important. Many insurance providers offer such policies but do not just settle for the cheapest one. Take your time to compare before deciding.