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Term insurance is an insurance plan with a defined time frame. The Insured pays a fixed Premium for the duration of the policy. There is no monetary benefit at the end of the insurance period other than the high Risk cover that the Term Policy offers.
Term plan has gained more and more popularity over the years due to several reasons. The important reasons are:
Term policy is a recommended choice for individuals who want to get insured with minimum investment. The insurance premium amount is lesser than that of whole life insurance policies, while the risk protection is high. The income tax rules provide for tax exemption when Death Benefit is claimed and a Tax Benefit by deducting insurance payment amount from gross income. It is the preferred choice for people with limited income who look for an insurance policy with minimal investment and good coverage.
A term plan can be chosen from 5 to 35 year duration depending on the person’s needs and income. Instead of choosing a whole life cover, the person can time the insurance cover in such a way that it will serve the purpose when he needs it the most. Minimum age for buying Term Insurance is 18 years and maximum is 65 years.
It is fairly easy to buy a term plan. All one needs to do is to log on to a reliable online insurance portal to buy one. The different term plan options are explained in detail online and are easy to understand. With options that enable you to compare insurance, there is no need for an Insurance Agent or broker to act as an intermediary in order to explain the plan.
With rising inflation, it is a definite advantage or an indirect return on investment when the insurance premium payments remain constant for a high Risk Cover amount. The insurance cover amount is of higher value in comparison to the amount of premium paid for a term cover.
One can supplement their term cover with additional benefit Riders like accidental disability, critical illness, child cover, dismemberment and so on. With riders, term insurance can be modified to suit specific needs.
If the insured survives the insured period as per term policy then the premium paid for Coverage is refunded back to the insured up to 100 percent. This is especially applicable for policies where high rate of cover is preferred.
With so many advantages and attractive features, term plans are the trending financial products in today’s insurance industry.