Term life insurance is one of the most basic financial security tools available for an individual to accumulate money to safeguard their family’s future in the event of any unfortunate event. It’s a pure protection plan that offers life coverage in return for premiums paid over a given period.
These plans can help the insured to prepare for any unprecedented eventualities that may arise if the primary breadwinner of the family passes away due to accident, illness, or unforeseen death. It differs in several ways from a whole life insurance plan.
While term plans carry no cash value, they certainly fit the bill in many cases. Oftentimes, you may find term plans making more sense than standard whole life insurance, depending on your financial capabilities and future requirements.
When Does it Make Sense to Purchase a Term Plan?
Whole life insurance provides you with lifelong coverage and also provides additional corpus to support your retirement. On the other hand, term life insurance covers you for a short period, but it is generally cheaper and much simpler to understand.
In the event of your unfortunate death, either of these policies can help your family cover the funeral costs, mortgage payments, and other expenses. Let’s take a look at when it’s better to choose a term plan instead of a whole life insurance policy:
You Need Cover for Only a Limited Time
If you need an insurance policy only to replace your income for a certain period after your demise, like for your child’s education or paying off a debt, then choosing a term plan is more beneficial as it is intended to provide your family with a limited time.
You’re Looking for Affordable Coverage
As you may already know, term plans are the most basic type of life insurance that makes them much affordable as compared to standard plans. Moreover, you can get it at even more affordable rates if you choose to purchase online.
You Have Other Investment Avenues for Financial Growth
If you believe that you can invest your money better in other instruments based on your experience, you can purchase a term plan for your family’s security and invest your excess money to accumulate wealth through other instruments, which will be effectively more profitable than the whole life insurance.
Features of Term Life Insurance Plans
As compared to money back plans, whole life plans, and even Unit Linked Insurance Plans, purchasing a term plan is much affordable as it’s much simpler and consists of only a single benefit paid in form of the death benefit to your nominee.
Purchasing term life insurance is also easier than buying other insurance plans as they’re not only available online but contain a very less learning curve as well. Moreover, there are numerous different plans available to help you choose an ideal investment avenue that matches your requirements.
As a policyholder, you can choose a preferred premium payment term for your term plans. You can choose from options like annual, quarterly, half-yearly, or monthly payments as per your convenience. These plans are highly flexible and can be personalized as per your will.
Almost every term plan allows you to add riders to extend the coverage of your policy. You can choose from several riders like accidental death benefit, critical illness benefit, and many more at affordable charges and make your plan even more beneficial.
5 Best Term Plans Available in India
Canara HSBC Oriental Bank Of Commerce – iSelect Star Term Plan
The iSelect Star Term Plan is affordable pure risk term life insurance that allows you to choose from various options of premium payments, coverage, and benefits payouts according to your needs. Moreover, you can also choose to get a cover for the entire lifetime and add your spouse to the same policy at discounted rates. The plan also offers great flexibility by offering multiple premium payment options, including single payment for the entire term, which makes it one of the best term life insurance plans available in the market.
SBI Life eShield
SBI Life eShield is a non-participating and non-linked insurance plan that assures high coverage at affordable premiums. The plan also provides additional discounts to non-smokers and allows you to choose from two different plan options namely level cover and increasing cover. You can also enhance your coverage through additional riders like accidental death benefits and accidental total & permanent disability.
Max Life Smart Term Plan
Max Life Smart Term plan covers the policyholder against 40 different critical illnesses, including cancer, kidney failure, and heart attack to keep your family financially protected in the event of any unfortunate circumstances. You can also choose from seven different variants of death benefits as per the monetary requirements of your family.
Aditya Birla Sun Life Shield
Aditya Birla Sun Life Shield term plan ensures the complete safety of your family’s future by offering eight different plan options tailored as per the varying requirements of individuals. The plan also features an inbuilt terminal illness benefit and over five different riders, in addition, to choose from. There’s also a joint-life protection feature in the plan that allows you to cover your spouse under the same policy at affordable rates.
ICICI Prudential iProtect Smart Term Plan
ICICI Prudential iProtect Smart term plan is one of the best term life insurance policies in India that provides comprehensive coverage. The plan features four different payout options – lump-sum, income, increasing-income, and lump-sum plus income. Moreover, female policyholders also get additional coverage for breast and cervical cancer.
A term life insurance is a great way to safeguard your family’s future financially without breaking the bank. As stated above, there are certain instances when it’s better to choose a term plan than a whole life insurance policy. Therefore, you should properly assess your requirements and determine whether it makes sense for you or not.
Hey, this is Johny Sehgal. I am the owner and caretaker at Finance Jungle. I completed my education in BSC and now heading towards the digital marketing industry. I usually have interests in reading, playing games and watching movies. I also love to write content based on quality information. The main motive of mine is to provide the top and best quality information to my readers. Finance Jungle is the blog for the same.