The recent furore over poverty related cut-offs not-withstanding, it would be quite difficult, nigh impossible for someone to sustain themselves on a mere 32 Rupees a day. However, the same amount is enough for someone to be insured for approximately 60 Lakhs. Such is the magic of Term Plans that financial experts and industry professionals unanimously agree that there is seldom a better option when it comes to offering this high an insurance cover for a monthly premium outgo that is as low as a thousand rupees.Term plan are also called as protection plan. In some term plan you can get an option of premium return but in that case your cover will be less. While choosing a term plan one should always focus on security of his family members rather than investment. If you have investment in our mind than fixed deposit in a bank or savings in PPF can give you better returns in future.
Term insurance plans are also known as pure-risk policies, since the premium payable is wholly devoted towards the coverage of risk. In the case of other insurance solutions, the premiums also include an investment component and hence, are correspondingly higher.
Some of the core benefits of a buying a term insurance plan are:
- For every lakh rupees as coverage, the premium payable for a term plan will be cheaper than those for other types of insurance policies.
- The premium payable-to-coverage offered ratio is many times higher in the case of term insurance policies.
- In most instances, there are deep discounts on offer for people that choose to go in for a higher sum assured.
- Coverage is extended even in the event of a payment stoppage of premiums.
- Non-smoking individuals get special discounts when they opt for term policies.
- There are dedicated add-ons that offer protection over and above the standard coverage. These are typically for personal accident benefits, safeguards against dreaded diseases, and so on.
- Tax breaks are available to all term insurance holders as per the provisions of the Indian Taxation Laws. The same are applicable at the time of premium payment as well as at the time of receiving benefits (as the case may be).
- The time period for insurance coverage in the case of term policies typically ranges between 0.5 to 3 decades, with options for renewal at the end of it.
Remember however that inflation can be a big drain on the sum payable and it is important to factor this in. Also, while coverage is available for relatively short duration, it is generally a thumb rule to opt for the longest policy duration available. Thus, Term Life Policies ensure that the ambitions and dreams of your children and loved ones continue to be fulfilled in the smoothest possible way.