Term insurance is one of the most important parts of your personal finance. Life is uncertain. While you focus on living your life to the fullest, you need to be prepared for uncertainties. If you are the sole earning member in your family, then it is a must that you financially protect your family. This is to ensure that they can live their life even in your absence. This is what a term insurance plan ensures. What is term insurance? How can you get one for yourself? Find out here!
What is Term Insurance?
Term insurance is a type of life insurance policy. In it, the insured person pays a premium for a certain period. The term insurance plan provides a life cover to the insured for a period as per the terms of the policy. In case of unfortunate demise, the family of the insured is paid the assured sum amount.
How Is Term Insurance Different from Other Life Insurance?
Term insurance is a pure form of a life insurance policy. Most life insurance policies provide insurance and investment. In simple words, the premium paid by you not only provides insurance benefits but is also invested by the insurance company. When the policy matures, or the insured event happens, the family of the insured person is paid the sum assured amount as well as investment value. They act as twin instruments of investment and insurance.
But in the case of a term insurance plan, you are only provided insurance benefits. There is no investment element in term life insurance. Some policies may allow a refund of the premium after maturity. This is also the reason why its premium is much lower. Lower premiums allow a large section of society to benefit from life insurance.
How to Get Term Insurance?
Getting term life insurance is very simple. You can buy a term life insurance policy from any insurance company or bank. Many people prefer buying term insurance from a bank. Banks have an insurance arm that provides insurance facilities.
Which Banks Provide the Best Term Insurance Plans?
If you are looking to buy term plans from a bank, then below is a table of some of the best banks for the same:
|Name of the Bank||Claim Settlement Ratio|
Why Term Insurance?
When you create your portfolio, insurance is the first thing you start with. Before flying, it is important that you prepare a safety net. Following are some of the most important reasons for having term insurance:
As stated earlier, term plans have a lower premium than other life insurance policies. This is because it is a pure form of an insurance policy. You just need to pay a small portion of your income to get term insurance.
Security for the family
Term insurance provides much-needed security to your family. In case of your untimely death, your family will have adequate financial resources to make it through life. This is one of the best gifts you can provide to your family. It is a symbol of how much you care for your family.
Term insurance plans are flexible. You can customise the plans as per your needs. There are multiple options available with respect to tenure, mode of paying a premium, and frequency of paying the premium. You can either pay premiums monthly, quarterly, half-yearly or even annually.
Refund of premium
There are multiple term plans that offer a refund of the premium. After the policy matures, you will receive a refund of the premium paid over the tenure of the policy. This creates a win-win situation for you. If the insured event occurs, you receive the sum assured. If the insured event does not happen, then you receive a refund of the premium paid by you.
Low claim rejection
The chances of a claim getting rejected are low in the case of term life insurance. Term life insurance mostly covers all the scenarios in which you receive your sum assured. You can observe the same in the claim settlement ratio table above. Most of the banks have a claim settlement ratio between 96% – 98%. This shows that they approve 96% to 98% of the claims received by them.
This is one of the significant benefits of term life insurance. If you feel that the base cover is not enough, you can go for riders. Adding riders allows you to extend your coverage. You can cover exceptional cases through riders as well. You will just have to pay a little extra premium. But it is always beneficial to include riders if you need to.
Banks present some of the best term plans for your portfolio. As per your needs, you can select any one of the plans. You can also secure other members of your family through term life insurance. Further, you can easily get term life insurance from any bank without visiting the same. You just need to visit the bank’s website and go through their plans. Buying your term insurance plan online has its own benefits.
It allows you to compare different insurers and insurance policies. This helps in the selection of the best plan for your needs. Further, it is a convenient way of buying insurance. You can select the plan, make the payment, and activate your insurance plan anytime, anywhere. Buying your term insurance online also helps you save a lot on commission costs. Insurance companies pay commissions to the agents if we purchase an insurance plan from them. This commission forms part of the premium that we pay on the plan. For more such useful information, visit Piramal Finance now. This is a one-stop platform for accurate information on financial and banking services. Make sure your financial knowledge is up to date on essential services and products, such as personal loans and insurance coverage, by reading the informative blogs on their website.