In today’s world, where the role of insurance has been growing for all good reasons, term insurances have also become quite popular, all thanks to the various benefits they bring in. People in the 21st century are accepting the positive aspects of term insurance, and are being quite proactive by investing in the plan based on situations in life.
Term Insurance – defined
As one can understand from the name, it is a type of insurance that one can opt, for a certain period of time. The minimum number of years ranges from 10 to 30 years, the latter being the maximum term of this insurance.
When a person opts for a term insurance, he/she (policyholder) is insuring his/her life. In case the policyholder suffers an unfortunate death, the insured amount, which is nothing but the agreed sum assured is paid to the nominee.
The role of a term insurance plan
A term insurance covers the biggest risk of your life – it covers you for an unfortunate death. This is the most unforeseen situation in one’s life, which is exactly when the role of a term insurance comes into the play. A term insurance gives you the assurance that your family members have an immediate financial security in case of an adversity.
What are the benefits offered by the best term insurance plans?
Wondering what the benefits of a term insurance are in your life? Well, read on. Here are some top reasons as to why you must invest in a term insurance during your lifetime:
Cost effective: In one word – it is affordable. When you compare this insurance product with the other options available in the financial market, you realize that the best term insurance plan offered by a company is actually quite affordable. All you have to do is, pay the premiums that were pre-decided by you, and the insurance company will take care of the death benefits based on the premium paid.
They make it easily available to you: The best term insurance plans are always easy to sign up for. This is in terms of opting for it; preparing the paperwork etc. where the best plans ensure that the pre-work before the insurance plan is hassle-free. As a matter of fact, this is one of the reasons as to why a term insurance is considered to be the most people-friendly insurance plan as well.
Tax benefits come along: Yes, you are reading it right! All term insurances bring along the benefit of tax. The premiums paid are eligible for tax deductions and benefits received are tax-free.
Covers big risk of life: The basic reason to opt for a term insurance is to insure your life. A term insurance comes into play when death occurs. The best term insurance plans ensure that they are securing the immediate financial condition of your family in case of your death.
The best term insurance plans have affordable premiums: Several insurance companies, these days, are offering the policyholders a chance to decide the premium amount that they want to pay. In short, the plan allows you to opt for low premiums which you can afford.
The best plans bring out timely payouts at the time of maturity: In situations where the term insurance matures, the insurance company that offers the best term insurance will make sure that the nominees are being paid out on time.
Are there any drawbacks to buying a term insurance plan?
Well, just like a coin has two sides, every aspect of life has its own advantages and disadvantages. A term insurance plan is no different. While it has several benefits as a whole, it also has few drawbacks that are stated below:
Age: A term insurance plan cannot be opted for by anyone; it has a maximum age limit. People above that maximum age cannot opt for term insurances, while as a matter of fact, they are the people who need it the most. Generally, the maximum age to opt for the best term insurance plans is 65-70 years.
It does not provide leverage over inflation prices: Not all insurance companies take the factor of inflation into consideration during the payouts. This becomes a major drawback, as the money rate is always changing.
You cannot opt for loans against term insurance, unlike other insurance plans that act like a security for your other loans through banks.