A term insurance plan is a type of life insurance plan that is meant to cover an individual for a specific amount of time. The term insurance is meant to provide financial support to any customer who is insured at the time if a medical emergency. There are several differences between a term insurance plan and a normal insurance plan in terms of coverage, the period of the plan and all the other features.

A term insurance plan confirms a sum assured to the policyholder at all times. The plan itself has a nominee policy where the entire sum assured to the insured is paid to the nominee in case of accidental death of the customer. A term insurance plan is not only meant to cover a single individual i.e. The policyholder, it also provides support to the entire family of the individual.

Why to Buy a Term Insurance Plan?

Buying a term insurance plan is the biggest security step that anyone can take in making sure that there are no financial problems at the time when the insured has medical problems. A term insurance plan is a health insurance plan where the majority of the plan is decided by the individual who is going to buy the insurance plan.

A guaranteed amount of money is assured to everyone who is insured under a term insurance plan. The plan is meant to cover the person through all medical problems that they may face. The sum assured is paid to the nominee of the individual in case of accidental death of the insured. A term insurance plan makes sure that the family of the insured and the insured always have enough money to sustain themselves in case the insured can no longer earn.

Unlike a normal health insurance plan, a term insurance plan covers a wide range of diseases and illnesses that a normal health insurance plan may not cover. Several different types of critical illnesses are covered in such a plan. A term insurance plan also has lesser waiting time when it comes to the waiting period for pre-existing diseases.

Anyone who owns a term insurance plan is exempted from paying the Government a certain amount of money in the form of tax. This is in accordance to Section 80C of the Income Tax Act.

The premium for a term insurance plan is dependent on the customer itself. The premium can be paid by the customer when he/she wants to play the term insurance plan. The premium for a term insurance plan can either be paid on an annual, half-yearly or even a quarterly basis. There are also options for paying the premium online on a one-time basis or a regular basis.

Comparing Features of a Term Insurance Plan

For anyone who is looking to buy a term insurance plan in order to secure themselves and their families for the rest of their lives, there are a number of factors that need to be compared and kept in mind for the same. Buying a term insurance plan among the many plans that are offered in the Indian market can be a tedious task. For this reason, it is important for everyone to compare the different features of the plan itself before checking the premium of the plan. Some of the common features that are common to all term insurance plans include:

• Anyone who owns a term insurance plan is entitled to save a certain amount of money when it comes to filling out tax forms at the end of a financial year. Due to Section 80C of the Income Tax Act of 1961, a certain amount of money is exempted from being paid as tax money to the Government.
• Anyone who owns a term insurance plan is free to choose the type of plan that suits them the best. There are special customizes plans that are present in the market for customers whose lifestyle demands it. This is not the case for a life insurance plan.
• The policy term for a life insurance plan is a minimum of 5 years while the maximum tenure of the plan can last throughout the lifetime of a person provided that they pay the premium of the plan and keep it active on a regular basis.
• Anyone who is within the age of 18 years and 65 years is eligible to opt for any form of term insurance plan for themselves and for their immediate family members as well. The premium for a term insurance plan keeps on increasing as the insured individual ages through the years.
• The maturity age of a term insurance plan is more compared to a normal health insurance plan. Though the life risks for maturing a plan are more, the term insurance plan charges a higher rate of premium for elderly in order to tackle the medical diseases that come along with old age.
• On the occasion of the death of the insured, the entire sum assured from the term insurance policy is paid to the nominee of the individual or the family of the insured. This helps the family financially for years altogether.
• In the case of the insured being disabled and not receiving their income due to an accident or disability, the term insurance plan makes sure for the lifestyle expenses of the individual.
• There are alot of extra covers that can all be added to a term insurance plan free of charge according to the wishes of the insured like critical illness cover, accidental death benefit cover, hospital cash cover etc.