Term Insurance – Best Term Insurance Plans & Policies

Term Insurance – Best Term Insurance Plans & Policies

Buying a term insurance plan is climacteric in everyone’s life. Therefore, it must be done carefully and with clear thoughts of the future. The question is not just about mere achieving a lump sum amount after gratuity, but to craft your dream or for the person for whom you are planning.

It’s very simple as regular premiums keep your life insured. The basic concept behind life insurance or term insurance is to attain a lump-sum amount from the company, in case of the holder’s unexpected demise. The amount becomes really helpful for the family to retain financial stability and paying off liabilities if left behind. So, this indicates the importance of carefulness when purchasing a term policy. If you are too, impetuous, your family may head to financial hardships in your absence, in spite of giving the best efforts.

So, let’s take a look at some of the best plans and policies before buying term insurance.

What is term insurance?

Term insurance or LIC term plan is a policy that provides fixed coverage to the insured for a particular period as per the term of the policy. The payments released by the company are provided at a fixed rate. If in case, the insurance holder gets the call from the God (unfortunately), while staying within the term of the policy, the insurer pays a pre-decided amount to the nominee either in installments or in full.

In India, there are even some insurance companies that provide full-coverage if the nominee becomes disable or partly-disable. This happens when the incidents tend to disrupt regular income of the holder. If the term of the policy has been survived by the policyholder, he/she is destined to receive the entire amount of premium in the form of single payment or installations along with interests.

Term insurance plans and policies

There are multiple companies in India that provide an array of policies for the customers when they look for buying a term plan. Various companies include various clauses in their policies while keeping the basic norms intact. Now, with a bouquet of plans, how will decide on which to conclude your search? Here are some key parameters that can help you choose the best term insurance plan.

• Settlement ratio: Look for a strong and healthy claim settlement ratio with a minimum of 95 per cent. It is the ratio that depicts the policyholder about the number of claims that have been paid till date with the proportion of overall claims. The higher the ratio is, the better it is.
• Critical illness benefit: Most term life insurance plans cover critical illness policies. It helps to protect your family from financial risks associated with the treatment of critical illnesses like cancer or brain surgeries. The payment is usually obtained immediately with the confirmation of medical documents that indicates the diagnosis.
• Solvency ratio: Solvency ratio is the number that determines the financial ability of the insurer when settling down your claim. As per the standards mentioned by IRDAI, every life insurer must maintain a minimum of 1.5 solvency ratio to get certified and gain a reputation in the industry.
• Waiver of premium for terminal illness: This parameter indicates, if the nominee gets affected by terminal illness, the premiums that are to be paid in the future will not be paid.
• Accidental death benefit: The nominee must have the freedom to include accidental death benefit with the term insurance plan. Under this clause, the family of the nominee will get additional payout in case of accidental death. However, the amount is assigned to a particular sum of money that varies between companies.

So, basically, the best plan will be the one that has the ability to pay money instantly to your family members without facing any hassle. You must ensure, during your absence, they must not suffer while acquiring the sum of the amount designated by the insurance.

Features of terms insurance

After considering the important parameters of term insurance, you must focus on the key features to make yourself aware of different sections and their facts.

• Entry age: A person will be able to file for term insurance between the ages of 18 to 65.
• Sum assured: The assured sum of the plan is the amount that is payable to the nominees after the demise of policyholder.
• Maturity age: Maturity age is when your policy of the term gets matured. Most of the policies mature after 75 years; however, this depends on the policy holder’s choice and term’s plans.
• Age limit of the insurance: Depending on the insurer, the policyholder usually gets life insurance when he/she is in the age of 85. Well, this too, depends on the type of plan chosen by the policyholder.
• Tenure: Tenure is an important part of term insurance plans. It is the duration or period required for depositing the premiums before the plan becomes matured. There are different types of tenure available and most of them vary based on the types of policies.
• Health checks: Some insurers ask the applicant to undergo a certain process of a health checkup to determine the condition of health. This is usually done after crossing a particular age or when in need of high insurance cover.

The best term insurance plan can help you in saving taxes. Under the section 80C from Indian Constitution, a maximum amount of INR 1.5 lakhs per year can be shown as deduction till you are paying the premiums.

Important note

When filing an insurance proposal plan, it is important to mention the nominee name. In most cases, wives, children and close relatives are shown as nominees. You must ensure, under the MWP Act (Married Woman Protection Act) the sum will be passed to the nominee without any hassle. This act allows a married man to protect the insurance policies to provide benefits to the nominee.

Term insurance plans are of course a sensible investment that protects your future with a handsome financial portfolio. Keeping the entire discussion in mind, go ahead and find the best term plan that suits your family’s dream.