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Reasons Why One Must Buy Term Insurance

There are several types of life insurance plans available in the market, each varying in the benefits it provides and how much it costs. Term life insurance is a particular type of insurance which is popular for being one of the most affordable plans that provides protection to your loved ones, especially in times of an unforeseen event. The defining feature of term insurance policies is that they offer coverage for a specified number of years. In case the insured passes away before the expiry of the tenure of a term insurance plan, then his nominees/beneficiaries will be provided with a Death Benefit or sum assured. However, if the insured survives the policy term, then no payout is made.

Term insurance policies have a number of benefits, which make them an ideal insurance option. Read on to find out more about how a term insurance policy can benefit you.

Competitive Pricing:

When it comes to term insurance policies, they are easily comparable, primarily on the basis of price. In terms of their structure and operation, term insurance policies are essentially similar, which allows one to compare between different policies with greater ease. This simple basis of distinguishing policies, along with the ease of understanding, has led to the competitive pricing of term insurance policies, which are fast attaining the status of a commodity. There are far lesser issues in terms of information for term policies, which has further helped in the competitive pricing of these policies.

Simple To Understand:

While other insurance plans such as Endowment policies may be a little complicated to understand, term insurance plans are far simpler to comprehend. While there are several aspects involved in insurance plans such as the saving component, calculation of risk, size of cash value savings, death benefit, policy loan repayments, etc. As compared to all this, term life insurance is very simple as it only asks you the term for which you wish to be covered, for which you are asked to pay the premium. That’s is all that is involved.

Option To Renew:

This is a very helpful option included in term insurance policies which allows policy holders to continue their insurance cover. If your policy is renewable, then you do not have to undergo or submit a medical test at the end of the first complete term of your policy.

Flexibility:

As compared to a cash value policy, it is far easier to opt out of a term insurance policy. It is quite simple for term policies where once the insured stops the payment of premium, the risk cover provided by the policy also ceases and the policy is no longer applicable. Considering that there is no savings component in term insurance policies, you will not receive any payout. On the other hand, under cash value policies, you will only receive the complete promised survival benefit if you have continued the policy till it reached the end of its term. If you have ceased the premium payment of your cash value policy before the end of its term, it will be a greater loss since you won’t be able to recover the savings you have earned under the policy without deductions.

Option to Convert:

Another important feature often offered under term insurance plans is the option to convert. Policy holders are allowed to convert their term insurance policy into another policy such as an endowment policy, depending on the change in conditions. Conversion of a term insurance policy will be done considering restrictions such as time duration, cost of conversion, amount to be converted, etc.

Affordable Coverage:

As already mentioned above, term insurance plans are considered to be one of the most affordable types of insurance plans available. Premiums for term insurance policies are considerably lower than those charged by cash value policies. Not only are term insurance plans simple to understand, they are also one of the most affordable plans which offer premium returns. Policy holders can fix the amount of monthly premium which they an pay based on their budget and the insurer will calculate the death benefit based on the premium. For instance, a 30 year old individual can currently purchase a term insurance policy for a duration of 20 years for a sum assured amount of Rs 10 lakh by making an annual premium payment of Rs 3000. Compare the same with an endowment policy which does not provide any profit and offers the same amount of sum assure, the annual premium for which will not be below Rs 30,000 or Rs 50,000 in case it is an endowment policy with profits.

Tax Benefit:

Like several other insurance plans, term insurance plans also offer tax related benefits on the death benefit which is payable to the nominees appointed by the insured. The logic behind this arrangement is that a policy holder pays the policy premiums with money which has already been taxed by the government. Therefore, the benefit amount which you receive is not taxable. Premium payments made under term insurance policies are eligible for tax benefits under Section 80C of the Income Tax Act.

No Mystery Surrounding Returns:

Another reason why investing in a term insurance plan is beneficial is that there is no mystery surrounding the returns that you will receive. Once you have begun investing in a term insurance plan, you can easily determine the exact amount of returns that you will receive, due to which, the risk factor is considerably lowered. It is because of this reason that term life insurance remains to be one of the most popular type of investment in India.

Timely Payouts:

If you compare between the several types of life insurance plans that are currently sold in India, term insurance plans are the ones which provide the fastest payouts among all others. This is one of the most important benefits which have made term insurance plans so popular, mainly because of the simple terms of the policy. When a claim is made, the insurer will be obliged to make the payment as soon as possible without much debate.

Additional Benefits:

A majority of life insurance policies offer living benefits, in addition to the Death Benefit. Usually available in the form of a rider, living benefits have considerable weightage on the returns paid by term life insurance policies.

Easy Access To Information & Quotes:

With the term insurance sector going increasingly competitive, more and more players are entering the industry with affordable plans. This has helped make information regarding term insurance easily available to individuals with greater ease. Also, it many insurance providers are providing prospective policy takers with quotes in term insurance plans to encourage them to make a purchase.

Customer Reviews

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  • Bajaj Allianz Life Life Insurance
    "Safe plan for future"
    0.5 5.0/5 "Blown Away!"
    I have life insurance with Bajaj Allianz, I used to pay Rs. 12,000 for one year policy, it has the tenure of 40 years, Its a totally term plan for the value of 1 crore, they give lump sump amount to the nominees, the claim ratio is good and also terminal waiver on premium.
    Was this review helpful? 0
    , pune
    Reviewed on Dec 14, 2018
  • SBI Life Life Insurance
    "Best ULIP Policy"
    0.5 5.0/5 "Blown Away!"
    I have purchased a market based policy 2 years ago. I have chosen SBI LIFE because it was suggested by my friend. I pay the premium amount of Rs. 10000. I make the premium through online. The growth was pretty good and tenure period of the policy is 10 years.
    Was this review helpful? 0
    , bangalore
    Reviewed on Dec 14, 2018
  • LIC Life Insurance
    "Best policy in LIC"
    0.5 5.0/5 "Blown Away!"
    My money back policy was taken with LIFE INSURANCE OF INDIA. I pay the premium amount of Rs. 5000 in a month. I have selected LIC because of the returns. I make the premium through ECS. Total tenure period of the policy is 25 years. My friend has referred me about this policy
    Was this review helpful? 0
    , bangalore
    Reviewed on Dec 14, 2018
  • LIC Life Insurance
    "Good LIC policy"
    0.5 5.0/5 "Blown Away!"
    I'm just paying the premium and i have never get the sum assured amount and i will get it after 25 years of tenure period. I'm making the premium through ECS. I pay the premium amount of Rs. 5000 every month. I will get a coverage value of Rs. 1.27 Cr.
    Was this review helpful? 0
    , bangalore
    Reviewed on Dec 14, 2018
  • Bharti Axa Life Life Insurance
    "Best Policy"
    0.5 5.0/5 "Blown Away!"
    I have taken life insurance from the Bharti Axa life as it has good returns i make the payment through on-line banking annually . This policy covers accidental and critical illness benefits with the tenure period of 15 years . Overall am satisfied with my policy .
    Was this review helpful? 0
    , faridabad
    Reviewed on Dec 14, 2018
  • LIC Life Insurance
    "Useful policy"
    0.5 4.0/5 "Great!"
    In the month of February, i have purchased a money back policy from Life Insurance corporation of India. I pay the premium amount of Rs. 15000. Last time i have paid the payment through cheque and in future i make through online. One of sister who is working as a LIC agent has referred this policy.
    Was this review helpful? 0
    , bangalore
    Reviewed on Dec 14, 2018
  • LIC Life Insurance
    "Useful policy"
    0.5 4.0/5 "Great!"
    I have purchased a term insurance policy 1.5 years back. There is no particular reason for choosing the LIC. I pay the premium amount of Rs. 26000 and i have chosen the annual payment mode. Sum assured amount was Rs. 70 lakhs. Total tenure period of the policy upto 70 years of my age.
    Was this review helpful? 0
    , bangalore
    Reviewed on Dec 14, 2018
  • LIC Life Insurance
    "Average Policy"
    0.5 3.0/5 "Satisfactory"
    I have a life insurance policy with LIC from last 4 years and it is a long term policy. I pay my premium once in 6 months through direct payment and i am convenient with the payment options. Tenure period for this policy is 18-20 years. The returns and benefits are good in this policy.
    Was this review helpful? 0
    , ghaziabad
    Reviewed on Dec 14, 2018
  • LIC Life Insurance
    "GOOD SERVICE"
    0.5 5.0/5 "Blown Away!"
    I have purchased the life insurance policy with the LIFE INSURANCE CORPORATION OF INDIA where the name of the policy is ENDOWMENT PLAN and i am using it from past 10 years. The maturity period of this policy is till 67 years of my age. This gives the policy coverage of 4 lakhs.
    Was this review helpful? 0
    , bangalore
    Reviewed on Dec 14, 2018
  • LIC Life Insurance
    "Good Policy with Life Coverage"
    0.5 5.0/5 "Blown Away!"
    I have agent who coordinate with me for my life insurance, they are responding well, the customer support is good, they have different payment options. The policy name called Jeevan labh its for 15 years I get the benefits as lump sum amount with life cover.
    Was this review helpful? 0
    , bangalore
    Reviewed on Dec 13, 2018
  • LIC Life Insurance
    "Good service"
    0.5 4.0/5 "Great!"
    I have been using my life insurance with Life insurance corporation of India,the agent had clearly explain me about the policy coverage, plan benefits etc, there premium amount they have charged me was nominal,they charged in quarterly basis,overall service is good.
    Was this review helpful? 0
    , hyderabad
    Reviewed on Dec 13, 2018
  • HDFC Life Life Insurance
    "Fine policy for emergency purpose"
    0.5 5.0/5 "Blown Away!"
    Along with my personal loan they have provided me a life insurance policy from HDFC LIFE. I have to pay the premium amount of Rs. 6000 in a year. I used to pay the premium through online. Total tenure period of the policy is 4 years. I'm getting a sum assured amount of Rs. 3 lakhs.
    Was this review helpful? 0
    , gurgaon
    Reviewed on Dec 13, 2018
  • SBI Life Life Insurance
    "Best Policy"
    0.5 5.0/5 "Blown Away!"
    I took this Life insurance from Sbi life mainly because of the good returns. The payment am doing through online every year through online payments . The best about the policy is it covers accidental coverage and critical illness There customer service and customer response is also good.
    Was this review helpful? 0
    , bangalore
    Reviewed on Dec 13, 2018
  • LIC Life Insurance
    "Best Policy"
    0.5 5.0/5 "Blown Away!"
    Based on the benefits and returns i have chosen this life insurance corporation of India . I am satisfied with the amount which am making for the policy . Am making the payment yearly through online . This policy cover accidental benefits . Overall am happy with it.
    Was this review helpful? 0
    , faridabad
    Reviewed on Dec 13, 2018
  • LIC Life Insurance
    "Good policy"
    0.5 4.0/5 "Great!"
    I have purchased a life insurance policy in my wife's name. 5 years back i have bought the Jeevan saral policy with Life Insurance Corporation of India. Since its a better company, i have selected the LIC. I pay the premium amount of Rs. 5400. Its a long term policy. I have selected the annual payment mode.
    Was this review helpful? 0
    , mumbai
    Reviewed on Dec 13, 2018
  • LIC Life Insurance
    "Best Service"
    0.5 5.0/5 "Blown Away!"
    I am using LIC using thee policies same policies life insurance coverage and two more different policies i am never contact customer Service for everything contact with agent only Responsiveness very good , Promised Interest Rate is less in LIC but trust worthy , Fees & Charges is use to pay by agent only. Hence i can give rating 5 for best service
    Was this review helpful? 0
    , ahmedabad
    Reviewed on Dec 13, 2018
  • IDBI Federal Life Insurance
    "Very Good"
    0.5 4.5/5 "Excellent!"
    IDBI Life cover policy for my children there is more benefits in this policy i have to pay 30k every year after his age of 16 partially amount will received for his education after few years for marriage and in risk factor also amount will provide once terms will complete total Amount will be received in 3 terms for this policy.
    Was this review helpful? 0
    , hyderabad
    Reviewed on Dec 13, 2018
  • LIC Life Insurance
    "Very good"
    0.5 4.5/5 "Excellent!"
    I am using Life Insurance policy and need payment in six month once i am happy with LIC insurance policy . Since long time i am using Life cover policy so i am only trust to LIC for Life insurance payment is made in cheque and sometimes in cash which one collected by agent for service i can give rating 4.5 very good service.
    Was this review helpful? 0
    , hyderabad
    Reviewed on Dec 13, 2018
  • HDFC Life Life Insurance
    "Every salary holder must taken this policy"
    0.5 4.0/5 "Great!"
    I have purchased the HDFC accidental policy nearly 4 years before. I have been paying the premium amount of Rs. 80000. I used to make the premium through my credit card and i covert into EMI basis. This is annual payment mode policy. This policy has coverage value of Rs. 15 lakhs and all my member covered in this policy
    Was this review helpful? 0
    , kolkata
    Reviewed on Dec 13, 2018
  • LIC Life Insurance
    "Good policy in LIC"
    0.5 4.5/5 "Excellent!"
    Since its a Government undertaken i have selected Life Insurance corporation of India for my life insurance policy. One of my agent who referred me about the Jeevan Anand policy. I had purchased this policy in 2013. I used to make the premium amount of Rs. 30000 and i have selected the yearly payment mode. The policy will get over by 2033.
    Was this review helpful? 0
    , kolkata
    Reviewed on Dec 13, 2018
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