In the recent times, insurance is looked forward as investment options than their real purpose i.e. protection. However, Term life insurance is still a pure insurance product. It offers no investment benefit rather simple protection for a particular period of time. Therefore, its importance is often overlooked. As a matter of fact, Term Insurance is a low cost alternative to gain a high Coverage for life. It can be very beneficial for those who cannot afford to pay high premiums and yet want to gain adequate life cover.
What is Fixed Term Insurance?
In fixed term insurance, the protection is provided for a fixed period of time and at the end of which the cover expires. During this period, a certain amount of Premium is paid for such cover. If the Policy holder dies before the end of the tenure, a lump sum payment is made to the nominees while no amount is paid if the event of death occurs after the expiry of that period. The length of the coverage may vary from 30 to 35 years.
Benefits of fixed term insurance:
When you pay a premium, you get a host of other benefits along with the cover, for a fixed period of time, as your term plan returns. These are:
1.Term insurance can provide higher protection on a small premium.
2.If the policy holder demise during the tenure, the lump sum amount received is free from tax liability.
3.In the event of death, benefits for children’s education can be provided in terms of financial help for higher education.
4.It provides coverage to pay off mortgages and other debts.
5.Term insurances are also available on a yearly basis.
6.Term plans are highly flexible. These can be renewed, converted to whole life insurance to name a few. However this highly depends on the terms and conditions of the company from which insurance is taken.
7.Some insurers provide benefits in case the policy holder is getting treatment of severe illnesses like cancer.
When to Buy Term Insurance?
You can buy term insurance at any point of time in your life. However, considering the following points will help you get the most reasonable and beneficial deal.
Term life insurance premium calculation is based on the probability of death of a person. Since it gets higher with the growing age, it is advised to buy term insurance
at a younger age.
2.It is always better to get a convertible plan. This is because it will help you when you grow financially and would be ready to pay more for a permanent insurance.
3.You never know where life takes you, so better buy an insurance policy online. Also, it is often seen that online deals are cheaper than buying from an agent.
4.Exercise regularly, eat healthy and maintain a healthy lifestyle. Do not get addicted to things like cigarettes, alcohol etc as they will add more to the amount of premium.
Different companies are coming up with very attractive term plans
which are better versions of the already existing ones. Use the internet and keep browsing for newer and better options.