Purchasing the best term plan in India best suited to a person’s insurance needs can be a daunting process for those new to insurance instruments. Hence in order to ease the hindrances in understanding the differences between the abundance of term plans available in India, one must pay close attention to the features and benefits of each so as to identify the best term plan in India, which also serves their investment and insurance requirements.
Term Life Insurance Meaning
A term insurance plan is made to cover the needs of the insured and their dependents through an assured benefit sum in the event of the policyholder’s demise. The best term plan in India is one that successfully combines an affordable means of securing one’s future where premiums are low and where one can customize their coverage and pay-out methods as per their convenience.
A term plan is an asset as well, which can help one to secure or pay off loans in the long run, even in the absence of the primary income earner. It is a resource to be used at times when unavoidable financial expenses have to be met by the surviving beneficiaries in the absence of the policyholder.
Now that the fundamentals of a term plan are established, let us read through the features that are to be expected in the best term plan in India in detail:
1. Premiums: A feature that is recurrent in most life insurance and term plans in India, it is the nominal payment that is paid to the insurance provider by the policyholder on a regular basis throughout the policy tenure. This payment maintains the coverage provided by the insurance provider and adds to the payout that is assured to the beneficiary at the end of the policy term.
2. Policy Tenure: it is the tenure of coverage determined and decided upon by the policyholder after consultation with the insurance provider. The policy tenure for a term plan is usually longer than most standard insurance plans. The duration for the best term plan in India may range somewhere between 25-30 years. The plan reaches maturity once the tenure is completed.
3. Death Benefit Sum Assured: It is the promised payout amount promised to the beneficiary of the policy in the event of the insured person’s passing. This amount is usually a financial resource for the beneficiary to maintain their financial obligations after a disturbance in the income patterns.
4. Policyholder: The person who signs the insurance documents and maintains the recurrent premium payments and any additional policy costs is the policyholder.
5. Insured: The individual whose life is insured under the term plan is called the insured. It is in the event of this person that the insurance provider is liable to process the assured payout amount to their dependent beneficiaries.
6. Beneficiary/Nominee: The individual who is designated as the person to receive the assured sum pay-out in the event of the insured person’s passing is called the beneficiary or nominee. These are usually spouses, children, or other family members who may be financially dependent on the insured.
The features of term plans are standard blocks upon which most insurance plans are built; let us look into the benefits one can expect to avail from the best term plan in India:
1. Affordable Premiums: The more complex a plan is, the higher the premiums for them are. Even the best term plan in India is one that is simple and accessible to people across all income strata. Hence, those who are starting out in their professional careers with limited finances can choose a term insurance plan as they are one of the most affordable plans available in India.
2. Death Benefit Pay-Out: The amount that is paid out to the beneficiaries as denoted by the policyholder is one that is assured and handed over to the beneficiaries of the policy at the time of the insured person’s passing. This pay-out can be customized into a staggered monthly income instead of a lump sum if deemed fit for the beneficiaries.
3. Rider Benefits: One can add riders for income, waived premiums, disability, accidental death, or even critical illness in their existing term insurance plan. While you may think you don’t need such riders, think again. At present, cancer claims close to 10 million lives worldwide each year, which is why it is best to be prepared rather than suffer insurmountable debt later. However, the cost of these riders added to the basal premium cost, so one should choose after adequate deliberation.
4. Tax Benefits: The premiums paid for a term insurance plan and the pay-out sum thus received from the same at the time of maturity is exempted from taxation under Section 80C and 10(10D) of the Income Tax Act 1961.
5. Return of Premium: Since a standard term insurance plan does not offer any maturity benefits, one can avail return of premiums in the event the insured lives beyond the policy tenure. After policy completion, one can receive their premiums except for the taxes and additional rider costs.
6. Corpus Building: The best term plan in India term insurance plan can be expected to be optimal insurance that has its own investment benefits as well. One is able to build a supplementary financial resource for their dependents in the future, which is exempted from taxation and market risks.
The pursuit of identifying the best term plan in India can be completed by weighing one’s needs against the features and benefits offered by the same. In order to further explore options of the best term plans in India, one can check plans offered by Max Life Insurance which offer a blend of these benefits along with close guidance by their adept financial advisors.