Insurance

What Are the Different Term Insurance Plans Available in India?

10:22 PM RAWAT 0 Comments


Term insurance plans are protection plans which provide individual financial security during the demise of the family member. The sum assured is provided to the nominee if the policyholder dies during the tenure of the policy term. But if the policyholder outlives the tenure, then no benefit is provided. Term Plan usually offers a higher sum assured with the lowest premium. This offers more benefits, unlike regular Life Insurance.


Listed below are lists of different Term Insurance Plans available in India:

1)      Level Term Plan:

This is the most straightforward term plan. Here, the sum assured does not change during the policy term, and the nominee receives benefits in case of death of the insured. But if the insured outlives the policy term, then the plan matures, and there are no benefits given to the nominee.

2)      Return of Premium Plan:

This is the term plan, the insurance company returns the premiums paid if the policyholder survives till maturity, but if the policyholder dies during the maturity period, then the sum assured is given to the nominee.

3)      Increasing Term Plan:

In this term plan, one can opt for increasing the sum assured annually while their premiums remain the same. Here the premiums are different than level term plans.

4)      Decreasing Term Plan:

Decreasing Term Plan is precisely the opposite of increasing term plan. Here the sum assured keeps on decreasing to match the decreasing needs of the insured. This plan is usually for people who have taken a more substantial home loan or personal loan amount, and they are regularly paying an installment amount or an EMI. Here the sum assured keeps on decreasing as and when the EMI is paid out, and gradually the loan amount keeps on decreasing. 

5)      Convertible Term Plan:

This plan, as the name suggests, offers flexibility to change the policy wherein the term insurance plans can be changed to other plans in the future. Suppose in the initial stage you liked the level term plan, but after some years you realize that you are in need whole life insurance plan, and then through this Convertible Term Plan, you can change the plan.

6)      Term Plans with Riders:

Term Plans with Riders offers more enormous benefits than the usual term plan. Through rider plans, one needs to increase the premium by some amount to avail more benefits in the future.  This rider benefit is provided on top of the base plan.

There are various riders like Critical Illness Rider which covers major diseases like cancer, waiver of premium options in which company pays of the premium in case of death of the insured while the policy still continuous, accidental death rider which covers insured in case of death due to accidents, income benefit rider which provides income to the family members after the death of the insured for 5 to 10 years, accelerated death benefit rider is used when you are disabled and are unable to work, in that case, insurance companies provide partial sum assured amount and remaining sum assured is provided after the insured’s death. The last rider in the list is permanent and partial disability rider is specifically for people with disability due to accidents wherein partial amount is provided in case of partial disability and the total amount is provided in case of total disability.

Choosing the best Term Insurance Plans is essential. Be careful while purchasing the Term Insurance Plan. There is also a freelook period usually of 15 days wherein people could say no to the plan if they found out that policy doesn’t offer what was promised.

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