4 Points to Look for While Finding the Best Term Life Insurance

A term insurance plan is a very useful tool in times of need. So, you must purchase one only after thorough research and examination. It will help you avoid any errors in the policy and during the claim approval. There are several things in term life insurance that you must ensure. Read on to know more about these crucial things.

4 Major Features of a Term Life Insurance

There are several components in a term insurance plan, such as premium amount, policy term, policy payment term, covers, customization, tax deductions, return of investment, capital growth, and flexible pay-outs on maturity. Knowing and understanding what specific benefits each feature provides will help you plan the premium amount. It will also allow you to maximize the returns from the same plan with minor or no changes in the premium amount. Among all the things that you must look for in term insurance plans, there are four major things. Given below is a brief discussion of those four important features of term life insurance.

Lifetime Coverage

Lifetime coverage is a great facility that several major insurers provide these days. The policy coverage term of most term insurance plans end with the policy payment term. So, you only have life coverage when you are paying for the policy. And at the end of the policy, you won’t have a cover. This can be a matter of worry, especially for retired people who don’t have sources of income to pay for the premium.

Most insurance companies provide lifetime coverage or coverage until the age of 100 years, even after the policy payment term. This helps people as they don’t have to look for new insurance policies when their existing policy ends. Their existing policy can provide life coverage even after the end of the policy.

Return of Premium

Guaranteed return of premium or invested capital is a point of attraction for several insurance policyholders. It makes a term insurance plan a suitable substitute or long-term investment. The insurance company already provides hefty death benefits to the nominee in case of the sad demise of the policyholder. But in case the policyholder survives the term, they return the entire premium payments in the form of survival benefits. And these maturity and survival benefits are free of any income tax deductions. So, you or the nominee will get the entire sum. However, this is not a feature of a pure term plan- only TROP.

Some insurance providers even have an interest rate on the premium payments, which is usually higher than inflation rates. So, providing guaranteed interest returns as well other than premium returns. Term insurance plans linked with market-dependent bonds like ULIP (Unit-Linked Insurance Plan) can provide interest rates as high as 15 to 20%. These interest rates are dependent on the performance of the usually risky bonds, so they can decrease or increase further.

Family/Joint Term Insurance Plan

A family or joint plan allows you to add family members or spouse to your existing term insurance plan. It is financially beneficial as you can substantially reduce your total premium amount. It also protects you from the hassle of purchasing and managing different insurance policies for the members of the same family.

Critical Illness/Accidental Death Coverage

By adding critical illness or accidental death coverage to your term life insurance, you integrate health insurance benefits into your plan. So, if you suffer from any unexpected critical illness that requires a huge amount of money for treatment, the returns from a policy will take care of that. It also provides you with the benefits of two types of insurance under the same policy and without much extra premium surcharge.

These major components of term life insurance will financially help during an emotionally wrecked phase. Not only do these assure protection upon maturity, but they also ensure the financial safety of the payer. Which in turn allows you to continue enjoying life without compromises on lifestyle due to an expensive premium.

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