Life is unpredictable, and on the other hand, it’s short too. We always think of something that would make our family financially secure in our absence. Here is where a term insurance comes into the picture. The plan lets you mitigate the financial risks in the most cost-effective manner, and allows the nominee and his family continue living life without compromising their lifestyle. In this article, we look at providing inputs as to why you should buy a term insurance policy.
Term Insurance is a type of life insurance that offers financial cover to the beneficiaries with more significant financial cover at lower premiums rates. There are certain terms of this policy whereby the death benefit payout has to be paid to beneficiaries as soon as the claim is raised. But, if the life insured survives the tenure, he or his family will not receive anything at maturity as term plans do not have any maturity benefits. Recently, a few insurance companies have started paying ‘Return on Premium’ with an extra cost to the premium, which offers a lump-sum amount to the policyholder at maturity. This can be taken as a rider which comes at an additional price due to which the premium may go up slightly.
Following are the key reasons to buy a term insurance policy-
Financial Security- An unfortunate demise of the breadwinner can impact his family, especially when the liabilities are left behind for them. Be it any liability or education or your child; you always wish your family’s financial independence behind you. A Term Insurance Plan would help take care of the financial needs of your family.
Low Premium- Term Insurance Plans offer no cash value on the investment at the end of/within the maturity period. Hence premium for Term Insurance comes at lower rates when compared to any other life insurance policy. If one taps on the calculation, the premiums charged to get a life cover would not be more than 2% of your annual income.
Flexibility- One of the key features of any term insurance plan is that they offer the flexibility of upgrading your current Term Plan into the Whole Life Policy, without undergoing any additional medical check-up. Similarly, you can choose an Online Term Insurance Plan. Buying an Online Term Insurance Plan is simple and extremely convenient.
Riders- With any offline or online Term Insurance Plan, you can opt for an add-on rider which gives you the chance to increase the number of benefits. Riders are optional, offered to suit your requirements, and come with a nominal cost. You can choose the best-suited rider for critical illness, death due to accidents, partial or permanent disability etc.
Claim Rejection Ratio- The ratio of claims being rejected is very low in case of Term Insurance Policies. The Insurance Regulatory and Development Authority of India has made it mandatory to pay the death benefits to the beneficiary in case of demise of the life insured. No insurance company can reject the claim due to non-disclosure of facts after two years from the commencement of the policy.
The critical reasons enlisted above should convince you enough to opt for a term insurance policy. With the help of advantages you get, you can secure your family’s financial future. This will help your family maintain a similar lifestyle. So, make the right choice and buy an online term insurance plan.
