Yes, term insurance is a pure risk protection plan. When you buy a life insurance policy like endowment Plans, you get maturity and death benefits. A term insurance plan only offers death benefits. There are no survival benefits.
By offering term insurance, insurers cover the risk of untimely death of policyholders. Term insurance is beneficial to both policyholders and insurers. You can get a higher sum assured at affordable premiums. Nominees get the death benefits if the policyholder dies within the policy tenure. If not, nothing is paid.
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See Also: Benefits of Buying Term Insurance Online
If you invest in stocks, bonds, post office schemes and real estate, you could get good returns. The amount of money you earn depends on several factors. There is a possibility that you could incur losses.
Term insurance is not for making a profit. It is for someone willing to offer financial protection to dependents, even in his absence. This is the basic difference between term insurance policies and investment plans. Even people with limited income can avail term life insurance plans.
See Also: What is a Term Insurance Plan?
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