What is term insurance?

Life insurance plans gradually evolving their guidelines every day in order to serve the primary needs of a person like investment, risk coverage,and savings. There are numerous options and different plans for multiple purposes are now getting introduced in the market. There are many plans that provide a complete life cover with a money back guaranteed plan which can be a good way to keep all the commitments made to a family. One can avail the benefits of the pension plan and other plans which are market-based.

The term insurance plans are the policy that offers insurance or fixed coverage to the person for a fixed period of a lifetime on a fixed rate of payments. If the person is not alive while paying the premium of the policy, then the nominee will get the pre-decided amount of money either in full or in half by the insurer. There are many insurance companies who cover the cost in case of full-disability or partial-disability and the regular income of the person is disrupted.

Understanding the Term Life Insurance Plans

The term insurance plans are comprised of very simple policies which provide coverage for a fixed period of time and for a very particular amount. The amount to be paid as a premium is decided on the basis of calculation carried out based on age while purchasing a policy, policy term and the amount of sum insured. The most basic benefit of the term covers the risk covered against the death of the bearer. In case the person survives the tenure of the policy term, the policy gets matured. Hence, it is suggested that a person should choose the term insurance plans that provide life cover up to the age of 80 years.

The term insurance is considered to be a very pocket-friendly product. The insurance plan covers the death risk and it provides an assurance to provide the benefit of the lump sum amount at the time of death to the nominee. If any mishap occurs to the holder, then the family members will get the financial help from the insured sum received from the insurance company. In such insurance plans, there is no investment, only mortality cover is provided. The assured sum remains fixed and there is an exemption in tax. As compared, the term insurance cover is less expensive.

term insurance

Terminologies Associated with Term Insurance

It is very important that before you make up your mind to purchase the term insurance product, you should take a lookat the key features of the plan.

Assured Sum:

The assured sum in the plan is considered to be the amount which is paid to the nominee only after the demise of the holder. The money is provided by the insurance company.

Age Limit:

The eligible age of the person should be in the bracket of 18 to 65 to buy the term insurance plan.

Maturity Age:

The age at which policy get matured is termed as maturity age. In general, most policies have the maturity age of 75 years and that may go up to 80 to 85 years.