Do You Know Why Term Insurance Plans Are Popular?

term insurance policy is one of the most popular life covers available in India. This policy offers a significant cover to the nominees of a policyholder in his or her absence. A term plan provides many benefits that help you ensure the monetary stability of your loved ones.

Here, we explain the reasons for the popularity of term policies. Read on to learn more.

  1. Best type of policy

If you are the only earner in your family, there indeed are many responsibilities that you have to carry on your shoulders every day. From the household expenses and loans to your children’s education, you have to build a robust financial plan to maintain your family’s happiness and prosperity. However, this also means that your family is entirely dependent on you, both financially and emotionally. What happens if you cannot be there for them due to an unfortunate event? This is when a term policy comes in handy.

If something untoward happens to you during the plan’s tenure, the insurance company pays a large sum assured to your nominees. This makes the plan a great investment option. Additionally, a term insurance policy offers no maturity or surrender benefit. For this reason, you can purchase this plan at an economical cost. 

  1. More affordable when you are young

Apart from being a cost-effective policy, you can save more money on a term plan by purchasing it when you are young. The term insurance age limit is in the age range of 18-65. If you are a young person, you will be healthier. So, insurance companies treat you as a less risky candidate and offer a lower price.

When you are in your early 30s, it is possible to get a life cover of INR 1 crore for a yearly price of approximately INR 7,000. The same cover’s annual premium will rise to over INR 10,000 when you are in your 40s. Hence, a term plan is a suitable investment avenue for younger policyholders.

  1. Riders add extra value 

Term policy is a pure life insurance plan; it only pays the benefit if a tragic event results in the policyholder’s absence. So, you may wonder why policyholders look forward to investing in term plans. It is because you can easily make the policy more comprehensive with riders. 

A rider is an additional cover that you can purchase with your existing term policy by paying a higher premium. With appropriate riders, you ensure other policy benefits along with the death cover. For example, if you have an accidental disability rider, the insurance provider will pay a hefty benefit if you lose your regular income due to disability caused by any accident. Another benefiting rider is the critical illness cover. If you have this rider, the insurer will pay the sum assured if you are ever diagnosed with any severe disease. You can use the money for treatment and running the household.

  1. Flexible options

When purchasing an online term insurance policy, you will notice that it comes with many choices that make the plan more customer-oriented. Some of these include:

  • Limited pay: This option allows you to pay the premium for a limited period, which is shorter than the policy tenure. This way, you can complete the payment cycle early and enjoy the cover completely worry-free. Another similar option permits you to pay the premium until your retirement, and your family can file a claim in case of any unforeseen circumstance occurring even after this duration. 
  • Cover till the age of 99: Some insurance companies offer a term policy that stays active until you reach the age of 99 as long as you continue to pay the premium. This increases the possibility of your nominees receiving the pay-out.

Now that you know why the online term insurance policies are so noteworthy in India, it is time to purchase one for your family. Make sure to compare multiple term plans to find the right one for yourself.