There are various features and elements that make term life insurance policy a suitable choice for individuals in their 20s and 30s. Some of them have been mentioned below:
Insurance Policy are favourably affordable :
Term plans are often referred to as ‘pure protection plans’ as they provide the element of protection, in contrast to traditional life insurance policies. This makes them cost-effective and reasonable. Since there is no maturity amount included in a term plan, it is simple to understand and is light on the wallet. This makes them a popular choice among young adults.
The premium that you are required to pay towards a term plan will be cheaper than a conventional life insurance policy like a money back policy.
Term insurance policy with return of premiums:
If you are hesitant about purchasing a term insurance policy since there is no maturity benefit involved, you can look at a term plan variant that provides you with a certain maturity value at the end of the policy term. This maturity value is equal to the return of all paid premiums. However, this variant will only be beneficial if you survive the policy term. In comparison with vanilla term insurance plans, TROP plans are slightly more expensive as they provide two kinds of benefits – maturity benefit and death benefit.
Term insurance policies are easy to purchase:
The terms and conditions surrounding a typical term insurance policy are very simple to understand. They can be purchased online as well as offline. The framework of a typical term insurance policy is easy to comprehend. You do not have to bother about the element of investment or wonder what kind of returns you will receive. It is a simple plan in which you will only be required to determine the total sum assured amount based on your financial requirements and objectives, financial debts, standard of living, and so on.
Term plans offer a staggered claims payout choice:
Term insurance policies provide a lump-sum amount (death benefit) to the family of the policyholder in case of his/her untimely death to help the family tide over financial losses. In certain cases, a lump-sum amount may not be what the family is looking for. They might need a steady flow of income over the period of time. To answer all these problems, there are certain term plans in which a part of the lump-sum amount is given to the family of the policyholder and the remaining amount is paid out in the form of monthly/annual income. With the partial lump-sum amount, the family of the deceased can take care of their immediate financial needs. The remaining amount provided in the form of monthly income can be used to handle monthly expenses.
Riders can be purchased alongside term insurance policies :
- Add-on covers, or riders basically enhance the coverage of the base policy by offering extra cover to the policyholder. Some of the most common term insurance riders have been mentioned below:
- Waiver of premium rider : With this rider, the policyholder will not be required to pay any further premiums in case he/she is diagnosed with a critical illness or becomes physically disabled.
- Accidental death benefit rider : The payout in a term insurance policy is substantially increased in case the policyholder passes away in an accident.
- Critical illness rider : As the name suggests, the policyholder receives a lump-sum payment in case he/she gets diagnosed with a critical illness (as specified in the policy).
- Term insurance policies offer rebate – Life insurance firms typically offer rebates in case a higher sum assured amount is opted for in a term insurance policy. For female lives and non-smokers, life insurance companies often provide a discounted premium rate.
Conclusion
Reading the terms and conditions of the policy brochure is thoroughly important while purchasing a life insurance policy.
