What is term insurance?
Term insurance is a type of life insurance policy that provides some financial coverage for the policyholder only for a specified period. Insurance companies can only compensate life term insurance policyholders if death occurs within the policy term period.
That means no benefit is paid to the beneficiaries if the insured individual dies after expiry of the term plan.
It is crucial to understand all the critical aspects of term insurance before you can go for it. Here we look at the features of term plan that make it the best option for you. Stay put into finding out more about life term insurance.
The Key Features of Term Insurance
1. It is Cost-effective
Life term insurance is one of the most affordable and cost-effective insurance policies you can find. It has a lower premium because it doesn’t come with a considerable investment component.
Given that this type of policy covers your family in case of your unfortunate or untimely death, you can say that it’s more cost-effective than most insurance policies.
2. Very Easy to Buy
The ease of buying term insurance is another feature that makes term insurance one of the most sought insurance policies. Like buying other financial instruments, you can identify an insurance provider and purchase your policy online or offline.
You don’t have to be bothered with where the insurance company will invest your money because the premiums for most term plans are lower. Most insurance providers use variables such as your standard of living, financial objectives, and financial debts to decide on the appropriate sum assured.
Use the online insurance calculators to determine how much premium you will pay when you opt for term insurance.
3. It allows you to Increase Insurance Cover
Your financial responsibilities, assets, and liabilities grow as you age. You are also likely to go through significant life stages like marriage, getting a child, and buying a home.
When you opt for term insurance, you can always upgrade your cover without going through a series of medical appointments and documentation.
However, you must confirm that the insurer is a trusted brand in the industry when selecting a life-term insurance plan. Find out the company’s claim settlement ratio and financial background before agreeing to choose their plan. A lifetime insurance cover is supposed to protect your life and your family, which means you should only buy it from a trusted brand.
4. Flexibility in Premium Payment
Term plans give you more flexible options for paying your premiums. You can either pay annually, semi-annually, quarterly or even monthly. Always choose which premium payment plan is most appropriate for you based on your income, budget, and convenience.
Term insurance is one of the best insurance policies that anyone can have. The plan comes with many features and benefits, making it the most suitable option for individuals operating on a tight budget or low income. You can always buy a term plan at a younger age and live free for the rest of your life.