What Is A Term Insurance Plan And Which One Is The Best In India?

A term insurance policy is a type of protection plan with a set period and level of coverage. If the policyholder dies during the plan's term, the chosen amount assures that the death benefit is paid to the departed's family by the insurance company. This total reward helps the family cope with their financial loss. Term insurance policies come in a variety of options, each of which guarantees something different. In India, there are several different types of term insurance plans.

Different Types of Term Insurance Plans

Here are some of the different types of term insurance plans.

• Level Term Insurance Plans

  Level term plans are ones in which the amount insured remains constant throughout the policy period. If the policyholder dies, the specified sum assured is paid. The most basic term insurance policies available on the market are level term plans.

• Increasing Term Insurance Plans

  Increasing term insurance plans increase the preferred sum insured by a fixed amount each year. The payable sum assured in the year of death is paid in the case of death.

• Decreasing Term Insurance Plans

  Decreased term insurance policies are the inverse of rising term insurance policies. Every year, the amount guaranteed under these plans decreases. Decreasing term insurance policies are typically issued as credit recovery plans, with the amount assured being reduced to match the decreasing balance of the outstanding loans. If the policyholder dies, the nominee gets paid the reduced amount assured available in the year of expiration. The goal of reducing term insurance policies is to pay off the loan's remaining sum if the borrower dies before the loan is paid off.

• Term Insurance Plans with Return of Premium

  These term insurance plans, also known as return of premium plans or TROP, differ from other types of term insurance plans in that they have a maturity advantage. The sum assured is paid if the individual insured dies during the plan's term. If the insured person lives to the end of the plan's term, the instalments are refunded. This plan is known as the premium term insurance plan's return since the premium payments are returned on maturity. This policy is suitable for those looking for financial security as well as a benefit based on policy maturity.

• Group Term Insurance Plans

  A group term insurance plan is another term insurance policy option. Members of registered groups can purchase group plans. Banks and their account holders, trade unions and their members, employer-employee groupings, clubs and their members, and other organisations are eligible for a one-year license. A single master policy covers all of the members. If a member dies during this one-year period, the family of that person receives an equivalent sum promised. Coverage for other members, on the other hand, continues. Every year, the policy must be re-evaluated. Premiums might be paid in a specific percentage by the organisation, its affiliates, or its members.

Best Term Insurance Plans In India

Here are some of the best term insurance plans that are found in India. 

• Edelweiss Tokio Life Zindagi Plus

  It's a type of life insurance that safeguards your loved ones. It not only meets your immediate demands, but it also gives you the freedom to adapt to changing circumstances and raise your living costs. It also assures that the family is well protected, even if the primary breadwinner is absent. With the Top-Up benefit option, this plan enhances your life cover year after year to meet your changing needs. You can opt to raise your life cover at different phases of your life with the Life-Stage benefit. Furthermore, Zindagi Plus includes a Waiver of Premium benefit option, which assures coverage against 35 essential illnesses.

• Canara iSelect Star Term Plan

  It's a Canara HSBC OBC Life Insurance Company term plan that's a pure term insurance plan with a variety of alternatives to make the coverage more complete. It is reasonably priced, has a lot of wonderful features, and gives the policyholder a lot of flexibility. This is a comprehensive plan that provides the policyholder with a lot of options.  Optional covers that are built-in are quite useful. The pay-till-60 option is especially appealing to salaried workers who wish to finish paying off premiums while still working and have peace of mind. 

• Aegon Life iTerm

  It is a pure term insurance policy that pays a lump sum payment or regular income to the life assured's family if he/she dies. The policy provides coverage until the age of 80, as well as an inbuilt Terminal Illness benefit, the possibility to enhance your life coverage as your needs change, cheaper premium rates for females and non-smokers, and a variety of riders against accidental death, critical illness, and disability.

Take Away

The term insurance policy provides excellent coverage for a cheap price, allowing you to select the greatest amount of coverage. This comprehensive coverage ensures that your family's financial requirements are met after your demise. No other investment plan can provide the same level of financial protection as a term insurance plan, so it is a must-have for everyone.

Also read: Why New Parents Should Buy Term Life Insurance?

How To Select The Perfect Term Insurance Plan For Your Protection Needs?

Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.