What Is A Term Plan? What Things Should We Consider?

Term Plan

September 24th, 2021   |   Updated on June 28th, 2022

You must give the information of the nominee while buying the insurance. Term plan is the right product for life insurance.

It offers financial security to your family in case of any untoward event. However, in this, the policyholder does not get any amount on the maturity of the plan.

Investment advisors also recommend keeping insurance and investment separate. If you keep insurance and investment separate, then you will get better insurance cover and you will also be able to earn a good return on investment.

In a term plan, the person buying the insurance pays the premium for a predetermined period. If the insured dies during this period, then his family or the nominee gets the sum assured.

Term plans get you cover at very low premiums. Usually, the term plan can be taken for 10, 15, 20, 25, or 30 years.
Now telling what 4 things you should consider before buying a term plan policy?

Term insurance plans are beneficial for any individual. This ensures that your family’s needs for food, clothing, shelter, etc., continue to be met when you are away. Every earning person saves to achieve certain goals. They decide the goal of buying a house.

1. Take Cover As Per Requirement

Financial advisors say that you should buy insurance at least 10 times your annual income. Along with this, keep increasing the insurance cover as your income increases or with the change in life or buy a separate term plan.

Accordingly, if you earn 15 lakh rupees in a year, then you should buy a term plan of at least 1.5 crore rupees.

2. Premium

The premium is dependent on three factors- your age, amount of coverage, and the term of the policy. For the same age, term, and life cover, the insurance company may charge different amounts from different people.

You can compare different features on the online website before buying a term plan policy.

While comparing online websites, you need to see the claim ratio of a company’s plan.

You can consider a company with a close to 95% claim as reliable for buying a term plan.

3. How Many Types Of Plans Are There?

As your age increases, so do your insurance requirements. When you are young, the need for insurance will be something. Insurance cover will have to be increased after marriage.

Similarly, having children will require more cover for you. Many insurance companies sell plans in which you can increase or decrease the sum insured over time.

4. Nomination

It is one of the most important parts of any insurance policy. You take a term plan policy for the financial security of your family.

Nomination ensures that only the one you want gets the sum insured in case of any unforeseen circumstances. You must give the information of the nominee while buying the term plan policy.

The potential for untimely death, accidents, disabilities, and diseases is always there, whether we think about them or not. What will happen to your family members and their dreams in such a situation?

This is a condition that you can control through the right term insurance policy. Get a significant life insurance cover for an affordable premium. Take a term insurance policy at a young age to reduce your premiums even more.

Like our page for regular updates on life insurance policies and term plan policies, if you have any questions regarding this topic, then feel free to comment on your queries in the comment box. We will be glad to hear from you.