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Many people find the concept of insurance to be a complicated one. Nonetheless, it still remains an important part of financial planning. This might be the reason why insurance providers came up with something simple, called Term life plan. Benefits you will be availing would depend on the type of plan you choose. Here are some basics of term life plan which you can refer while buying the same.
Acquiring life Coverage has become imperative in a present scenario. This plan provides the coverage which is actually required unlike other permanent life insurance plans that offer protection coverage as well as investment benefits.
Since there is no investment option, premium charges automatically become affordable. This is the reason why the maximum number of people prefers this kind of protection plan.
This plan does not offer coverage for an entire lifetime period, instead Insured specifies a particular time period of his choice to avail the protection.
Opportunity cost is the value or benefit of something that you have to abstain from to acquire something else. Given that an individual has to spend less amount to get term plan coverage, he has to forgo only that much amount which would have made him able to buy something else. The rest of the money saved or the difference which had have been spent on buying permanent plan, can be invested in other profitable schemes.
You do not have to worry about any other costs as you are paying merely for life cover. There are no choices for making investments and no investment fees to be deducted from your premium amount. Neither you have to understand the complicated conditions if you choose to take a loan from your own Policy funds.
Yes, you do not get anything if you live longer than the period you asked your Insurer to provide the coverage to you. Also, in case of surrendering the policy in midway, will Lapse the coverage without getting back the premiums spent on it. It is only in case of unfortunate demise of the insured that the nominee is entitled to the specified sum assured.
In case of not paying the premium on time, your policy coverage will not be seized, instead period of 30 days is provided as grace to make your payment. After the Grace Period is closed, you can put back your policy in terms with your insurer just by providing the proof of your insurability.
Sometimes, it is a necessity to buy life insurance, in that case term plan is the best plan for you. However, it has its own benefits and advantages, buy it only if it is congruent with your requirements and necessities.