A term plan, simply put, is a contingency or backup put in place to protect your family financially in the case of your untimely demise. It’s often referred to as the purest form of life insurance since it provides a simple life cover and the term policy benefits offer extensive life insurance coverage to your loved ones. Usually, when people think of life insurance, a life insurance term plan is what often comes to mind.

Since term plans are meant to secure your nominee and your beneficiaries, your aim should be to get a term plan that is convenient for them. The payouts should be received by them in a mode of their preference, the sum assured should be able to cover all their needs and so on.

Do I Need a Life Insurance Term Plan?

A term insurance plan provides a life cover and a financial safety net for a predetermined and fixed periof. If you are the policyholder, and your family are the beneficiaries, your family will be provided with insurance coverage for the whole policy tenure. This means that in the event of your death (during the policy term), the death benefit will be paid out to them for financial assistance.

Your term insurance nominee should have access to all the policy details because in case of your sudden demise, they should be able to file claim successfully with the insurer.

Benefits Of Getting A Term Policy

Purchasing a term plan has never been easier. If this is your first time, then this section should clarify what term insurance features to look for when browsing through term policies. Moreover, your term plan should be customised in a way that your term insurance nominee can reap the maximum benefits.

• Affordability

Term plans are more affordable than other types of life insurance. The earlier you buy a term plan, the lower premiums you can enjoy. The best term plans can  safeguard your family at a very reasonable cost without you or them having to worry about the budget.

• Easily Available

Life insurance term plans can either be bought in person (offline) or online through the insurer’s official website. A term plan is comparatively easier to purchase when you buy it online.  Buying a term plan online is also more beneficial since it allows you to browse other available plans. Furthermore, online term plans are much cheaper than offline ones.

• Flexible Payment Plans

The term insurance nominee should be able to receive the payouts of the death benefit as per their needs. Hence, as the policyholder, you need to ensure that the payouts are as per your family’s needs. When buying the term plan, select a payout mode – either a lump sum or a monthly payout mode that will best suit your family’s needs.

• Premium Payment Options

Term plans are also convenient as they allow you to choose how you want to pay your premiums. If you want to pay the premium regularly each month, you can do so and keep track of your premiums. Or, you also have the option of making quarterly or annual payments. There are also single pay premiums where a single lump sum premium payment will secure you and your family for the entire policy term.

Moreover, insurance providers like Tata AIA life insurance provide a term insurance calculator on their site to check the premiums on their term plans. This will help you determine what term policy is best for you.

Conclusion

A good term insurance plan will offer most, if not all, of these features to its policyholders. Therefore, it is important to discuss with your insurer what features and exclusions your term plan provides, along with knowing the cost of the premiums. The premiums of the life insurance term plan will also enable you to claim tax deductions each year under Section 80C of the Income Tax Act.