Term life insurance plans in India are the most basic and effective term insurance plan. These are protection plans that are designed to offer financial protection to your family against unexpected circumstances. A term insurance plan is taken for a particular time period wherein you will have to pay a certain amount as a premium. When it comes to choosing the best term insurance plan, you will come across different types that include:
Level Term Insurance
This is the most basic and commonly purchased insurance plan in the country. The sum insured as well as the premiums, are fixed throughout the tenure of the insurance policy. So the premium that you agreed upon with your insurance while buying the plan will remain the same for the next 10 to 20 years. The younger you take an insurance plan, the lower will be the premium you have to pay.
Increasing Term Insurance
This time of term insurance plan is the one wherein the death benefits continue to rise on an annual basis throughout the policy tenure. While the benefits increase, the premium of the policy remains the same. Additionally, some plans have limitations on the maximum benefit that an insured can avail and the increase in the amount will stop once reached that threshold. However, even if the coverage is not increasing the plan will continue to be active. These plans are designed to help insureds deal with changing circumstances and inflation. And the cost associated with it is typically higher than other term plans.
Decreasing Term Insurance
In this form of a term policy, the assured sum tends to decrease every year. This continues to happen until the entire coverage amount becomes nil. However, the premium payable during the tenure remains the same. Such policies are acquired to cover certain debts. Generally, the assured amount comes down to zero by the end of the insurance period. The premium of this type of insurance plan is lower as opposed to other types of term insurance.
Return of Premium Term Insurance Plan
If you invest in a return of premium term plan, the company will give back the overall amount paid in premium over the course of the policy when the term ends. But you will get the premium only if you manage to survive through the policy period.
Convertible Term Plans
These plans allow you to convert the policy into any other form of plan in the future. For example, initially if you have purchased a term insurance plan for 10 years and after five years you want to convert the policy into a whole life insurance plan, then you can easily do the same.
These are the five types of term insurance plan available for you. Each of these plans come with their distinctive features and serves a unique purpose. Make sure you do thorough research and make well informed decisions with regards to the right type of policy for you. Moreover, you should choose a reputable insurance provider to make sure you get maximum benefits from your investment.