What is a Term Insurance policy?
Term insurance is a type of life insurance that provides coverage over a fixed period. If the insured person dies during the time period of the policy, his nominees will receive a death benefit.
The premium paid in the policy is less compared to other types as it has no cash value. Term insurance is considered a safe and secure investment as it provides financial stability to the insurer’s family after the death of the policyholder.
Need for term insurance
The future is unpredictable for all of us. Today’s saving can be tomorrow’s earnings. In the absence of the breadwinner, many families would require financial support, and that’s exactly what these term insurances lend. It’s the main reason investment experts suggest term insurance policy very often.
Perfect Why should you buy term insurance online?
- The premium amount is less than the offline insurance purchase.
- The concept of the middleman is avoided in online insurance purchase.
- The additional costs added to the premium amount marking the offline investments are left out in the online platform.
- With Quick buy feature, you can make the term insurance purchase in less than a minute.
- The next second you make the payment; you will receive notification about owning new insurance.
- The online system has a reminder system, that reminds on the renewal, and expiry of the policy
- Online platforms can compare the policies available in the market and get the best of the market.
- The unbiased results provided by Fincover can make you buy the best policy in the market.
Different Types of Term Insurance Policy
Term Return of Premium (TROP)
The policy is beneficial if the policyholder survives even after the end of the policy term. People outliving the insured period will receive maturity benefits.
Convertible Term Insurance Policy
Convertible policy allows the insured person to convert his term policy into a permanent one. For example, you can convert your plan into an endowment plan. Some term insurance policies have built-in conversion options, while some have it as an add-on.
Level Term Plan
It is the simplest of term insurance. According to this policy, the exact assured amount is given to the beneficiary after the death of the policyholder.
Increasing Term Insurance Policy
In this plan, the amount assured will increase every year. This is made to match the inflation over the tenure. The coverage amount depends on the policyholder’s health condition while applying for the policy. The premium rate may or may not change with respect to time.
Decreasing Term Insurance Policy
Decreasing term insurance is renewable term life insurance with the sum assured amount decreasing over the time of policy at a predetermined rate. These are essentially used as mortgage redemption plans. In case of death during the loan tenure, this sum assured in the decreasing term insurance plan can be used to pay off the balance due in the loan.
Documents required to buy a term insurance
Passport size photo.
Identity proofs like Aadhaar card, driving license, PAN Card etc.
Income tax returns filed over the last 3 years or salary slips for the last 3 months.
Form 16 for salaried professional.
Form 16A for self-employed or freelancers.
Term insurance exclusions
Suicide within one year of policy purchase, according to some policies.
Death due to drug/liquor consumption.
Death due to criminal activity.
Complications that arise during pregnancy and childbirth.
Disease or condition that runs over a long period.
War or any nuclear activity.