Term life insurance or term assurance is life insurance which provides coverage at a fixed rate of payments for a limited period of time. After that period expires, coverage at the previous rate of premiums is no longer guaranteed and the client must either forgo coverage or potentially obtain further coverage with different payments or conditions.
Death benefit is payable to the nominee who is usually a family member. You can choose to get a lumpsum amount or a combination of lumpsum and monthly amount as per your requirement.
Term insurance is the most basic and useful form of life insurance. It provides a large cover at low premiums ensuring that the nominee of the policyholder can live the same lifestyle in case of the policyholder’s death.
Since this is a pure risk cover and no money is kept aside for investment component, term insurance policies provide a high amount of cover at very low premiums. Term insurance is the most important life insurance policy that one should have.Peace of mind
Term insurance plan is the most essential budgetary instrument that one ought to have. It is sadly often ignored as it does not have any maturity benefits. It is strongly recommended that all earning members who have dependents take adequate term insurance and not rely on the one provided by your company.Tax Saving
The premiums paid and the payouts made in case of death are tax free.Why term insurance ?
If your main concern is keeping your initial costs down, go for it . It gives you one year of coverage at a time and you need to renew annually. Annual renewable term usually has the lowest annual premium to start, but the premium rises with your age.
It gives you coverage for specific multiyear period - say 5,10 or 20 years. Level premium term lets you lock in the premium for that period; the annual premium is guaranteed and never subject to a change, from the first year to the last. That can be a smart way to insulate you from any premium increase.
It depends on your age, your health and the size of the death benefit you want. No surprise that the younger and healthier you are, the lower your premium will be.