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Pure term plan is the actual and ideal form of life insurance offering only death benefit. There is no element of saving or investment under a pure term plan. Pure term plan is also known as “level term plan” because the sum assured and the premium under the plan remains the same throughout the policy term and does not vary.
Following are the key benefits of a Pure Term Plan
Following are the key features of a Pure term plan:
The pure protection term plan offers only death benefit therefore the insurance company charges only mortality cost (cost of providing death benefit at an age) and nominal policy administration cost.
There is no element of saving or investment in a term plan. That is why there are no maturity benefits under a pure term plan.
The cost of a term plan on a per day basis could be as low as equal to a cup of coffee. Wondering how?
Let us have a look at the Premiums from different Life Insurance Companies for an:
|Insurance Company||Term Plan||Premium (Per day)||Premium (Monthly)||Premium (Annually)|
|Max Life Insurance Co.||Online Term Plan Plus||Rs 20.77||Rs 623||Rs 7080|
|HDFC Life||Click to Protect 3D Plus||Rs 23.93||Rs 718||Rs 8344|
|Aegon Life||I Term||Rs 18.9||Rs 567||Rs 6521|
Lesser the age, cheaper is the premium because at early ages there is lesser risk for a person to die and get death benefit from an insurance company.
With online term plans fitting into the Indian insurance landscape, anyone to have an internet connection and a device like a laptop, smartphone, etc. to buy a pure term plan. There are no hassles of meeting different agents and getting confused about which one to buy. Now anyone can buy a pure term plan easily by comparing the term plans offered by different insurance companies online. The premium payment can be made through multiple payment options like credit card, debit card, net banking, cheque, payment wallets, etc. easily.
Level Term plans offer premium payment options such as:
Term plans offer a rebate or special discount to people opting higher sum assured or risk cover under their term plan as higher sum assured means lower servicing cost per unit of sum assured for the insurance company. Also, insurance companies offer the rebate to the female lives as the mortality data or statistics show that females tend to live longer than males. So, the insurance companies offer special premium rates to females buying term insurance plans.
The premiums paid towards a term insurance policy offers tax benefit under section 80 C up to Rs 1.5 L of the Income tax act. It also offers tax rebate under section 10 (10 D) which allows death benefit as a tax-free amount.
Pure term plan pays for the untimely death of the person insured. On submission of all claim documents by the nominee, the insurance company processes the death claim. There are various options for disbursing the death claim under a pure term policy which are:
The claim pay-out option is given to the person insured while filling the proposal form and is decided at the policy inception only.
Riders are additional benefits which can be added to the pure term plan by paying a nominal extra premium. Following riders or add on’s could be added to get a complete coverage against sudden accidental death, disability, and disease.
(There could be other riders which can be bought and are available on a plan to plan or company to company basis).
Pure term plan can be bought through an online or offline mode based on your feasibility and convenience.
(In a nutshell, the Pure Term Plan is an ideal life insurance plan which should be in the kitty of all earning people to safeguard the standard of living and provide monetary support and income flow to their family members.