Life is uncertain. A term life plan helps prepare for uncertainties in life. Term life plans are one of the most basic life insurance plans; which mitigate risk and can be availed at a nominal premium. Nominees receive a lump sum amount on death of the policyholder, within the term of the plan.
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Listed below are some of the reasons why term insurance is useful:
An unfortunate event leading to the death of the breadwinner of the family; leads to considerable debt and huge financial liabilities for family members. You can secure loved ones financially, and save them from financial burden by availing a term insurance plan.
The sum assured depends on the age at which you purchase the term life insurance. You must purchase a term policy with a sum assured of about 15-20 times annual income.
The right amount of term cover helps your family meet lifestyle requirements as well as pay off debts. Inadequate insurance cover beats the very purpose of availing a term insurance plan. You must plan the insurance tenure carefully; as your family may not get the benefits of insurance cover; on a policy lapse.
The term life insurance is a mandatory policy for all earning people. The advantage of term insurance is that it conveniently fits your pocket. So, term insurance offers complete risk cover at a pocket-friendly price. Therefore, term insurance is the most effective way to secure family finances and enjoy a financial safety net for dependents.
Life insurers generally do not reject claims for a term life policy; which is in force for 10 years or more. The claims are easily settled with proper verification of documents.
The insurance company carries out a thorough verification for insurance claims which arise a few years after the purchase of the term life policy. However, the insured must remember that while purchasing a term life plan; you must give authentic details on current health status, lifestyle habits, finances and liabilities.
In this way; you can ensure the family does not face a claim rejection. The IRDA recently stated that the insurance companies cannot reject claims; stating non-disclosure of facts two years after the policy comes in force.
The term life insurance comes with a plethora of additional riders. The riders are additional benefits offered by insurance companies; to suit customer needs.
The term insurance riders can be availed at nominal premium and can be added to the base policy. Some of the most common riders availed by policyholders are critical illness rider, accidental death benefit rider and permanent disability rider. Some other rider options are waiver of premium and income benefit riders, and accelerated death benefit rider.
There are no rules on how to avail riders. Any policyholder can add these riders to the base policy and boost it according to needs. The premium rates on the riders vary across insurers and you must only avail riders you need.
The term life insurance is useful when it comes to flexibility. You can avail a term life insurance plan; either online or offline.
The term insurance also allows you to choose the tenure of your policy. So, you can choose term insurance tenure of 5 years to a maximum of 40 years.
You can choose a term insurance policy to cover any major liabilities like home loan, car loan and so on. An insured can also customize the policy to enjoy additional coverage.
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