7 Things You Most Likely Didn’t Know About Term Insurance Policy

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Term insurance policy is a type of life insurance policy which gives cover for a specified period of time. Most of the people consider term insurance policy as an economical way of getting life insurance because it provides high coverage at low premiums but that shouldn’t be your only basis for selecting a term insurance plan. You may buy a term insurance plan because it’s economical and later find that it’s not suitable for you or might miss some of the benefits of your policy because you didn’t know about it.

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7 Things You Most Likely Didn’t Know About Term Insurance Policy:

7 Things You Most Likely Didn’t Know About Term Insurance Policy

Slide2:

Term insurance policy is a type of life insurance policy which gives cover for a specified period of time. Most of the people consider term insurance policy as an economical way of getting life insurance because it provides high coverage at low premiums but that shouldn’t be your only basis for selecting a term insurance plan. You may buy a term insurance plan because it’s economical and later find that it’s not suitable for you or might miss some of the benefits of your policy because you didn’t know about it. With low premiums, Term insurance plans have many other features which you likely didn’t know. So let’s look at the 7 little known facts about term insurance policy: -

1. The most cost affordable life insurance plan :

Term Insurance is the most cost affordable life insurance plan to fit your budget. The availability of high coverage at the low premium rate makes term insurance plans an economical way to get life insurance. The term insurance plan offers you a lower premium because it is a pure form of life insurance cover as it simply provides cover against death without any saving and investment element. Because the company has limited liability towards the insured person, they offer low premium rate. 1. The most cost affordable life insurance plan

2. Flexibility to choose a policy term :

One of the key benefits of the Term insurance plan is the flexibility to choose your term of the plan. You can choose a term plan of 15, 20 or 30 and pay a premium for the selected policy term. If a person is afraid of paying premiums for his for his whole life and thinks it will go out of his budget, then term insurance policy acts as a relief for those people. This flexible option of a term plan widens its range of availability as life insurance plan. 2. Flexibility to choose a policy term

3. No survival benefit :

Unlike other traditional life insurance plan in which a survival benefit is guaranteed, the term insurance policy doesn’t give you any survival benefit. For example, if a person has taken term insurance plan for 15 years and he survives after the expiry of his policy term (15 years), the insurance company will not provide any survival or maturity benefit to the insured person. 3. No survival benefit

4. Risk management tool against loans and debts :

The main hesitation when going for a loan is the transfer of burden of loan to your loved ones in case of your death. Taking a loan requires responsibility and risk and that risk can be covered through Term insurance policy. A term insurance plan can act as a perfect tool of risk management tool against the loan and debt. If you have taken a home loan for 15 years, you can take a term insurance policy for 15 years, which will act as coverage against the risk of your home loan. 4. Risk management tool against loans and debts

5. No loan benefit :

You can’t get a loan against your term insurance plan. Many people have this misconception that as traditional life insurance plans increases their credibility for getting a loan, Term insurance plans will also serve that purpose, but it is not like that. You can’t get a loan against your term plan. 5. No loan benefit

6. Term Plan with Return of Premium (TROP) :

Term insurance plans with return of premium or what we call TROP is a type of term insurance policy which gives you return of premium upon the survival of the insured person during the policy term. The benefit of TROP over traditional term insurance plans can be seen at the time of maturity because in pure term insurance plans, the premium paid by the insurer is not returned by the insurer while in the case of TROP, the premium is returned to the insured person. 6. Term Plan with Return of Premium (TROP)

7. Regular Monthly income for nominees :

After getting the amount of death claim under a term insurance policy, nominees find it difficult to decide upon how much part of claim amount should I save, how much should I use as monthly expenses because the claim received is always a large sum of money. To deal with such situation, you can opt for receiving the claim amount as monthly income under your term insurance policy at the inception. You have two options in this case, either to receive a part of the claim at once and get the remaining amount on a monthly basis or get the whole claim amount on a monthly basis. 7. Regular Monthly income for nominees

Slide10:

Everything has its own pros and cons and same goes with a term insurance policy. To avoid any bad surprises and to get the maximum benefit from your term insurance, you should know it well. Whether you buy online term insurance policy or through an agent, clear concept about term insurance will enhance your ability to choose the best term insurance plan. Choosing a best term insurance plan is not a rocket science, it just requires some basic knowledge about the policy and your requirements.

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