The greatest gift you can give someone is something that adds value to their life. For instance, when it comes to gifting our loved ones, we often strive to find a perfect gift that helps them in times of dire need. If you are unable to get your hands on the perfect gift, consider an insurance plan – most precious gift you can ever gift to your loved ones.An insurance plan aids to secure the future of not only your children but your entire family.
Life is ambiguous and inflation is inescapable. Hence, for this very reason, term insurance plans are recommended by financial experts as they are most suitable for creating a legacy 15 to 20 times of a family’s annual household expenses, financial goals, and liabilities without having to pay hefty premiums.
But, what exactly is a term insurance plan?
A term insurance plan is just like a life insurance policy except that it provides coverage for only a certain period or specific term of years. Under this plan, in case of the untimely demise of the insured within the specified period, a death benefit is paid to the nominee or the family of the insured. Unlike traditional insurance policies or endowment plans, a term plan does not have any investment component. Thus, the insurer pays the nominee or beneficiary only if the insured person dies within the tenure of the insurance policy.
An insurance holder can check various online term plans with varying features or components to achieve different financial goals. Following are a few types of term plans:
- Decreasing term insurance plan
The cover amount in such plans keeps decreasing with time at a predetermined rate. Additionally, the premium charged for such plans iscomparatively lower than that charged for a level or standard insurance plan.
- Level term insurance plan
Level term insurance plans are also known as plain-vanilla term insurance. Under this policy, the coverage amount, the policy tenure, and the periodic premium amount are fixed at the time of registration.
- Increasing term insurance plan
Quite the opposite to decreasing term insurance plan, the cover amount in such plans keep increasing with time at a predetermined rate. The primary function of these insurance plans is to account for inflation to ensure that the policyholder isn’t underinsured. Hence, the premium rates are generally higher than the plans mentioned above.
- Term insurance plans with riders
Basically, riders are extra coverage or features such as critical diseases cover, coverage against hereditary ailments, or accidental death which can be integrated with the general plan. These rider plans are optional and can be added to the standard term insurance plan by paying an additional premium if the insured person wishes to.
While choosing a term plan, ensure that you have input correct information, check the claim settlement ratio of the insurer, compare premium rates rendered by various service providers and choose a relevant type of term plan to ensure your family’s financial security in case you are not there to look after them.
Start planning wisely for your family’s future and safeguard their dreams. All you need to do is to buy a plan that best suits your individual life insurance needs and pay the premiums accordingly. You can also use a term insurance calculator to gauge the required monthly premium to get your desired sum for your family.