Term life insurance is regarded as an indispensable addition to any portfolio. It is the purest form of life insurance, offering coverage for the policyholder’s life in return for a predetermined premium and for a specified duration. In case of the policyholder’s demise within this period, the insurer will pay out a fixed sum assured or death benefit to his/her nominee as per the insurance agreement. While this is the key benefit of a term life insurance plan, along with tax benefits and other advantages, there are some lesser-known aspects that you should also know about.
Term Life Insurance Plan Benefits You May Not Have Known
Here are some of the benefits of a term life insurance plan that you may not have known about.
- Limited term premium– You can choose the period for which you wish to pay the premium for your term insurance policy, while investing in the same. Hence, you can choose to pay your premium for a limited duration, say up to the age of 60 or even less. Of course, the earlier you start your policy, the higher your flexibility in terms of premium payments.
- Choosing the death benefit frequency and mode– A term life insurance plan gives you the chance to choose the death benefit/sum assured mode. You can choose a lump sum payout for your nominees or monthly payments to ensure regular income for the family. At the same time, you can also select the frequency of the same, i.e. increasing monthly income or fixed income every month.
- Increasing life coverage– With an increase in your income and changing life circumstances, i.e. marriage and childbirth, you may be able to scale up your life coverage. You can not only scale up your coverage, but also integrate various add-ons to make the policy more comprehensive.
- Return of premium– Many term insurance plans come with a return of premium rider that you can opt for. In this rider, the premiums that you pay throughout the policy period are refunded once you survive the policy tenure. You can then use the lump sum amount to take care of varying financial needs.
- Waiver of premium– Term insurance plans give you the option to add several riders to expand coverage in a variety of situations. One of the options is a waiver of premium in case you are diagnosed with a critical illness. This will remove the obligation of paying the premium in any such scenario, thereby benefiting you immensely.
As you can see, there are several lesser-known benefits that a term life insurance plan offers to policyholders. Hence, without delaying any longer, purchase the same to expand your financial safety net and secure your family’s future without any hassles. Compare multiple policies and check their premium amounts before finalising your term insurance plan.
