Term insurance plans
are protection plans which provide individual financial security during the
demise of the family member. The sum assured is provided to the nominee if the
policyholder dies during the tenure of the policy term. But if the policyholder
outlives the tenure, then no benefit is provided. Term Plan usually offers a higher
sum assured with the lowest premium. This offers more benefits, unlike regular
Life Insurance.
Listed below are lists
of different Term
Insurance Plans available in India:
1)
Level Term Plan:
This
is the most straightforward term plan. Here, the sum assured does not change
during the policy term, and the nominee receives benefits in case of death of
the insured. But if the insured outlives the policy term, then the plan
matures, and there are no benefits given to the nominee.
2)
Return of Premium Plan:
This
is the term plan, the insurance company returns the premiums paid if the policyholder
survives till maturity, but if the policyholder dies during the maturity
period, then the sum assured is given to the nominee.
3)
Increasing Term Plan:
In
this term plan, one can opt for increasing the sum assured annually while their
premiums remain the same. Here the premiums are different than level term
plans.
4)
Decreasing Term Plan:
Decreasing
Term Plan is precisely the opposite of increasing term plan. Here the sum
assured keeps on decreasing to match the decreasing needs of the insured. This
plan is usually for people who have taken a more substantial home loan or
personal loan amount, and they are regularly paying an installment amount or an
EMI. Here the sum assured keeps on decreasing as and when the EMI is paid out,
and gradually the loan amount keeps on decreasing.
5)
Convertible Term Plan:
This
plan, as the name suggests, offers flexibility to change the policy wherein the
term insurance plans can be changed to other plans in the future. Suppose in
the initial stage you liked the level term plan, but after some years you
realize that you are in need whole life insurance plan, and then through this
Convertible Term Plan, you can change the plan.
6)
Term Plans with Riders:
Term
Plans with Riders offers more enormous benefits than the usual term plan.
Through rider plans, one needs to increase the premium by some amount to avail
more benefits in the future. This rider
benefit is provided on top of the base plan.
There
are various riders like Critical Illness Rider which covers major diseases like
cancer, waiver of premium options in which company pays of the premium in case
of death of the insured while the policy still continuous, accidental death
rider which covers insured in case of death due to accidents, income benefit
rider which provides income to the family members after the death of the
insured for 5 to 10 years, accelerated death benefit rider is used when you are
disabled and are unable to work, in that case, insurance companies provide
partial sum assured amount and remaining sum assured is provided after the
insured’s death. The last rider in the list is permanent and partial disability
rider is specifically for people with disability due to accidents wherein partial
amount is provided in case of partial disability and the total amount is
provided in case of total disability.
Choosing
the best Term Insurance Plans is essential. Be careful while purchasing the
Term Insurance Plan. There is also a freelook period usually of 15 days wherein
people could say no to the plan if they found out that policy doesn’t offer
what was promised.
