Life insurance products can be a complete package. It can offer death benefits to your loved ones as well as protect you from uncertainties such as loss of income, critical illness, and so forth in the future. To safeguard you from the eventualities, life insurance product can offer extensive coverage. Due to the provision of relatively high coverage, you might assume that life insurance products are expensive.
There are numerous life insurance products such as endowment policies, term plans, and so forth in the market that can aim to protect the needs of your family with their coverage. While selecting an insurance policy for you, you might think an endowment policy is better than a term plan. While an endowment policy can allow you to accumulate wealth, term insurance can offer a relatively high coverage at a cheaper rate.
Before you finalize an insurance policy for you, let’s understand what a term plan is in detail:
When term plans were initially introduced in the market, many insurance companies would only offer death benefits. Since the primary aim of term plans was family protection, it provided a death benefit for the betterment of your loved ones in your absence. However, term plans have become a complete package that is a combination of death benefits as well as survival benefits under the same plan today. The new-age term plans can offer comprehensive coverage to match your evolving needs at an affordable rate.
Under a term plan, you can receive maximum benefits at an affordable rate. However, the term insurance benefits can vary from one insurer to the other. Therefore, let’s go through the top three most common benefits offered by many insurance companies:
- Joint cover
As a married individual, you might jointly share the financial responsibilities with your partner. However, if anything happens to you in the future, your spouse might have to bear the financial burden individually. Therefore, you should cover your partner under the same term plan that you purchase for you. That way, your partner would receive the financial payout after your demise to maintain their current lifestyle.
- Financial aid
The primary aim of a term plan is to offer financial support to your loved ones. Terms plans are pure protection plans, which can offer a payout called death benefit to your family members. With the death payout, your family members can fulfil their financial requirements in your absence. The death payout can be provided to your family based on their decision to obtain it. Typically, your family can choose to receive the payout every month or every year.
- Coverage extension
As you cross the various milestones in your life, your coverage needs can increase. For instance, you might require more coverage when you get married or when you have kids. Under such a scenario, you should increase the term coverage to protect every life stage. When you increase the coverage amount, you can stay prepared financially while you begin a new life with your loved ones.
To conclude, term insurance can be the cheapest form of insurance amongst other insurance products. Since it charges low premiums, term insurance plans can be affordable. Apart from low premiums, you can also reduce your tax liability with the help of term plans. However, choose a credible insurance company and avoid being fooled by the low premium. Calculate the premiums on a term insurance calculator and compare various options to understand the premium value of every plan before purchasing a term policy.