Learn About the 5 Crucial Elements of the Best Term Plan

Term Insurance today is an imperative investment that a person has to make in order to protect themselves from financial duress in difficult times. The reasons as to why a person should buy the best term plan lies in the benefits and features offered by insurance providers who have created plans and incentives for those striving to plan ahead.

Expenses are recurrent and constant, from bills to loans one has to maintain their financial obligations and also build their savings for future expenses. In the event of death or sudden illness where the income supporting these expenses is disrupted, one can face great distress and resort to liquidating important assets and savings. Therefore it is important for the primary breadwinner of the family to buy term insurance which ensures such a situation can be mitigated by offering coverage and monetary benefits at the end of one's term tenure; which can be used by the policyholder to fulfil their long-term goals or investments.

What is term insurance?

A term insurance policy is made to effectively cover the needs of the insured and their dependents through an assured death benefit sum in the event of the policyholder's demise. The best term plan in India can be one of the most affordable means of securing one's future where premiums are low and one can customise their coverage, add riders and choose payout patterns according to their needs. A term plan is an asset as well, which can help one to secure or pay off loans in the long run, even in the absence of the primary income earner. It is a resource to be used at times when unavoidable financial expenses have to be met by the surviving beneficiaries in the absence of the policyholder.

To buy term insurance, one should have a clear understanding of what is term insurance as there is an abundance of options and customisations offered by insurance providers today to incentivise planning ahead. Here are the crucial elements you can expect to be featured in the best term plan:

1. Affordable Premiums: The premiums that are paid towards the best term plan can be as low as Rs 600 for a coverage of Rs 1 crore. These prices ensure affordability for the policyholder, and a significant amount for the dependents to avail in the event of the insured person's passing or at the time of maturity. Premiums can easily be added to one's monthly budget as a recurring expense that does not financially strain the policyholder.

2. Additional Coverage: An added benefit of investing in the best term plan is the possibility of helping to secure the future of those who will be dependent on the policyholder. Since a singular term plan cannot be extended out to the dependents, it can however be boosted to add more coverage and an increased payout sum in the event of the policyholder's death.

3. Riders: To buy term insurance with its variations and abundance of options can be an ideal choice for people who wish to have robust financial visibility for all unforeseen situations that may arise in their life. Therefore, term insurance plans offer additional riders and benefits that can help policyholders prepare for situations that are not limited to death.

One can add riders for Income, Waived Premiums, Disability, Accidental Death or even Critical Illness in their existing term insurance plan. The cost of these riders added to the basal premium cost, hence one should buy term insurance riders after adequate deliberation.

4. Payout Choices: The manners in which a policyholder's income is fulfilling their financial obligations is something that should be taken into consideration while choosing a term insurance plan. Since the standard plan is to give a lump sum payment to the nominee of the policy, one can also choose how to avail the sum in case monthly disbursal is more suited to them.

There are options available for prospective term insurance plan policyholders to choose their payout method; as the beneficiary may not find it suitable to receive a large influx of money and manage it as per the needs of the family. They may benefit more from the lump sum being converted into a monthly, quarterly, bi-annual, or annual income as per their requirement.

5. Post-Retirement Security: Retirement can be financially stressful process if an individual does not prepare in advance for the change in income patterns. The best term plan can ease this transition, where a policyholder can choose a shorter premium payment tenure so that they will not have to pay premiums after a certain point; but will be covered by the term insurance plan even in retirement. A whole life plan is one that offers a similar insurance structure.

Therefore, the best term plan can be a useful resource and a lifeboat for families undergoing financial distress in the absence of their primary income earner. It is a crucial financial decision where it is beneficial to start as early as possible.

Author Bio:

Vinod Gill is a writer who specializes in writing content on Insurance and Finance subjects. He is a Digital Marketing Consultant, Blogger, and Co-Founder of Journalreporter.