Term Insurance Features

Term Insurance

While stories like Ravi and Reema’s can be scary, they often come with a lesson. Life will be unpredictable, and the only way forward is to be prepared. Term insurance is one way to ensure that even if something happens to you, your loved ones will be financially safeguarded. The death of the primary earner would not leave the dependents in a financial lurch!

Term Insurance Features

To understand what term insurance is and how it can secure the future of your loved ones, take a look at its features.

Term insurance offers you pure coverage.

Term insurance works in a simple way. You, the insured, buy a term plan with a specified tenure for which you need coverage. The period can easily range from 5 to 50 years (sometimes even up to the age of 99 years). In the event that something happens to you during this period, the appointed nominee will receive the coverage amount, known as the death benefit. In Ravi and Reema’s case, Reema was the nominee. In case you outlive the tenure, the policy comes to an end, and there’s no payout.

Want a maturity benefit with a term plan? You can opt for a TROP. In a Return of Premium option, the premiums paid throughout the tenure are returned if the insured survives the policy.

Term Insurance: The Most Affordable Form of Life Insurance

A term plan provides pure protection. There are no savings or investment components. And that’s exactly what makes it affordable. You only pay for coverage for a specific period; therefore, term plans turn out to be extremely cost-effective. You can easily be eligible for high coverage, that too at a low cost.

That’s not all. The premiums in a term plan can be paid at a frequency that suits you. You can choose to pay the premiums monthly, semiannually, or annually, without disrupting your budget.

Did you know that the younger and healthier you are, the more affordable your term plan may be?

There are Multiple Payout Options

Term plans also offer you the freedom to choose how your family will receive the death benefit payout. You can choose any of the following three ways in which the sum assured is paid to your nominee:

• Lump sum: The entire sum assured amount is paid at once.

• Monthly income: The amount is distributed in monthly instalments.

Combination: A portion is given upfront, and the remainder is paid out in monthly instalments. This flexibility ensures your family receives the money in the way that suits them best.

Depending on your nominee’s financial literacy and their financial needs, you can ensure your family receives the money in the way that suits them best.

You can Add-on Riders for Extra Protection.

As you progress in life, your responsibilities may also increase. You may need additional coverage. In such a situation, you can either opt for a different term plan or enhance your existing policy with riders. Riders are optional benefits that you can add to your base policy for a small additional premium. Some common ones include:

Accidental Death Benefit, where an extra payout is made if death occurs due to an accident.

A lump sum amount is paid if you opt for the Critical Illness Rider and are diagnosed with any of the covered illnesses, such as cancer, etc.

If you become permanently disabled or critically ill, the Waiver of Premium allows future premiums to be waived, while the policy remains in effect.

With the Income Benefit Rider, the nominee receives a regular income that can help them manage their everyday expenses.

Term Insurance Comes with Tax Benefits

Tax savings are another attractive feature of term insurance. The premiums you pay can get you tax deductions of up to ₹1.5 lakh per year, under Section 80C of the Income Tax Act. Additionally, the sum assured paid to your nominee is completely tax-free under Section 10(10D).

Term Insurance is Easy to Buy

Buying a term plan is probably the easiest. All you need to do is first figure out the coverage/ sum assured you want. There are multiple ways and thumb rules to calculate the sum assured; you should opt for the one that suits you best. The most common one suggests that your death benefit should be around 10 to 15 times your annual expenses. The amount of the course should be higher if you have loans and liabilities and are the primary earner in the family.

Did you know, Jio Insurance Broking brings you the best term plans from the best life insurance companies? You can take your time to compare different policies, their features, their claim settlement process, etc. What's more, you can also get discounts on the plans when you buy from the Jio Insurance Broking platform.

Over To You

Ultimately, the primary feature of term insurance is that it offers you peace of mind. You can rest assured that even if life throws a curveball, your family won’t be left scrambling for support. Remember, a term insurance policy is not about expecting the worst; rather, it is all about being prepared for it. It’s like a safety blanket for the people you love. When you buy a term plan, you enable them to continue life with dignity and stability if you’re not around.