Types of Term Insurance Plans

Insurance Plan

Your life is precious, and you need to take every possible measure to secure it. There are plenty of uncertainties that can impact your life, and you need to follow all the essential measures to ensure that you and your family remain secure all through the uncertainties of Insurance Plan.

There are plenty of mechanisms that can ensure the safety and security of life. One of the main approaches towards a safe life is insurance plans. Yes, insurance plans are the best security for your life; it not only covers your financial needs but also ensures that your loved ones are not troubled in your absence. 

There are plenty of insurance plans designed for different purposes, and you need to pick one that best suits your purposes. This article will talk about one such important insurance plan that you must take to plan your financial needs. Term life insurance plans are the most basic and imperative plans for individuals and families. 

Let’s talk more about this insurance and learn its different types. 

What is Term Insurance Plan?

As the name suggests, term insurance is a plan made for a specific time period. It is generally taken to fulfill a specific financial need. Even if the person dies before the plan’s maturity, the beneficiaries will get the total amount. 

If the insured person survives the maturity period, the plan will be matured. However, the insured has the option to extend the policy period and avail of the rewards. There are also plenty of add-ons that go hand-in-hand with the policy and add value to it. Today, you can easily acquire a term plan online and fulfill all the necessary formalities without the need to visit an agent of an insurance office. 

It is an ideal type of insurance that works great for people with specific financial needs, like higher education, retirement, and other specific objectives. It will rightly cover your needs and also provide death coverage. 

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Types of Term Insurance Plans

There are different types of term insurance plans that work differently and serve different purposes. It is your responsibility to filter these plans and find the best pick for you as an individual. Here are a few best term insurance plans that you should know about.

Level Term Plans

If you talk about the simplest term insurance plan, you will get to know about level term plans. It is a plan where the sum assured is not changed throughout the tenure. All the benefits are paid to the nominee in case of death of the insured. It is the most basic type of plan that doesn’t involve any intricacies. 

Return of Premium Plans

Some individuals would like to have some benefits on their plans; it is the right insurance plan for them. Unlike the level term plans, the return of premium plans come with maturity benefits. At the time of maturity, premiums are returned to the insured in case he/she survives till the maturity. It is the most preferred term plan by individuals as there will be benefits in the case of plan maturity.

Increasing Term Plans

It is quite evident with the name that it is a plan that will allow you to increase the sum assured. Yes, with increasing term plans, you can increase the sum assured annually where the premium remains the same. However, the premiums will be different than the level term plans, but you can keep it constant and change the sum assured at regular intervals according to your requirements. It is largely preferred by those looking to enhance their maturity benefits and increase the sum assured to maximize profits.

Decreasing Term Plans

It is the exact opposite of the increasing term plans. Evidently, the sum assured will keep on decreasing every year to match the needs of the insured. This plan is generally taken by people who already have huge loans and paying monthly installments. The sum assured is decreased at a frequency chosen by the insured according to their EMI payments needs. 

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Convertible Term Plans

As the name suggests, this plan gives you the option to convert your term insurance into any other plan in the future. It comes in handy for people who have changing financial needs. For instance, if you have taken term insurance for 20 years, you have the option to convert it to whole life insurance or endowment plan in just 5 years. For this, you need to clear it at the time of application that you want to go for the convertible plan. 

Term Plans With Riders

Riders are simply the add-ons that add worth to your insurance plan. With these plans, you can choose your choice of riders like accidental death cover, disability cover, critical illness cover, etc. Another benefit that you can reap here is that when you pick a rider and choose the premium waiver feature as well, you need not pay future premiums. It is the best type of plan that offers comprehensive coverage.

The Bottom Line

When it comes to securing your life, insurance plans and policies remain at the forefront of all the best protection. There are different types of insurance plans that fulfill the different needs of the people. One of the imperative and purposeful insurance plans that you can avail yourself of is term insurance plans. It is basically meant for people who have specific financial needs. 

You can easily avail yourself of term insurance online without engaging with any agent. But it is important to understand the benefits of this insurance plan and then make the most of it. In this article, we have covered all the essential information regarding term insurance plans and their types. You must understand which plan would be suitable in your situation and pick the ideal one. 

Term insurance has become the need of the hour; all you need to do is find the best type of plan and go forward with it. Do your independent research and learn more about these plans to get a clear idea.