Mr. Naresh bought a pure term insurance plan with a cover of ₹50 lakhs. He had his investments planned but when it came to life insurance, he went for a term plan, knowing fully well that the extensive coverage it would provide in an emergency would keep his loved ones safe! By choosing a suitable policy term, he ensured he could afford the premiums.
On the other hand, Mr. Rakesh bought a life insurance savings plan with a sum assured of ₹50 lakhs, he had a goal of saving his money and also providing life insurance cover to his family. He chose a life insurance plan that enabled him to combine the benefit of long-term savings as well as a life cover.
Are all Life Insurance Plans the Same?
Every life insurance plan is designed to suit the varying needs of different policyholders. While one may only be looking to secure their family’s future with a pure life cover, someone else may want to enjoy the benefit of being able to save their money through their life insurance plan.
Hence, if you need comprehensive life insurance coverage, you can choose to buy a term insurance policy. Alternatively, there are also term plans with a return of premium if someone wants to enjoy maturity benefits on a term life insurance plan.
But if you are looking beyond a simple term insurance coverage, for instance, saving up for your retirement or future goals, a savings plan, a retirement pension plan or a Unit-Linked Insurance Plan will serve your purpose.
However, here are some of the advantages of term insurance that can help you understand why one may want to opt for it.
Benefits of Term Plans
Here are the benefits of a term plans:
No matter how high the sum assured of your term plan, the premiums will always be more affordable than other forms of life insurance. This not only helps you pay the premiums regularly but also lets you plan your other expenses. And if you decide to buy your term insurance policy at a younger age, you can lock in lower premiums for the entire policy term for higher coverage.
Extensive life insurance.
The term plan coverage you get is exclusively dedicated to providing life insurance protection to you and your family. There are no other components or clauses under pure term insurance like there is under a savings plan or a Unit-Linked Insurance Plan. The advantages of term insurance will immensely benefit your family someday when you are not around to care for them.
Flexible policy terms.
You can choose the policy term for as long as you want life insurance coverage for your family. Depending on your insurance needs, you can opt for a short term like 10 years or a longer one for up to 40 years without worrying about their security. This enables you to pay your premium as per the sum assured so that the premiums do not become a financial burden for you. The minimum and maximum policy term that you can opt for depends upon the policyholder that you choose.
Complete financial security.
Term plans are low risk since your premiums are strictly invested in offering a life cover to your loved ones. In the event of your untimely demise during the policy term, you need not risk leaving behind the burden of unfulfilled financial obligations and unpaid debts since the sum assured is adequate enough to handle your family’s essential expenses and any other financial emergencies!
Term plan benefits are not just limited to the sum assured of the policy. You can choose from optional riders that enhance your term plan with additional coverage protecting you against critical illnesses, hospitalisation expenses, accidental death, and more! Or you can opt for comprehensive protection for health, accidental death and disability, etc., along with term insurance coverage with a plan like the Tata AIA term insurance policy.
While you can avail of these term plan benefits with a suitable term insurance policy, you can also opt for other types of life insurance policies for different types of coverage. For example, an annuity plan with a life cover can be a good choice for retirement planning while a ULIP can help you earn market-linked returns and also offer life cover protection.
Now that you are aware of how the various life insurance plans are designed to meet the unique needs of policyholders, you can understand how a term policy is not necessarily more important or better than any other life insurance policy. You can always select any life insurance plan, as long as it meets your insurance needs and fits your budget so that you are able to pay timely premiums.