A term insurance plan can be defined as a life insurance plan that offers financial protection to the insured’s family in case of any unfortunate happening. This plan can be bought for a particular time period. Since, term insurance does not offer maturity benefit, the premium rate is lower as compared to the other life insurance policies. The term insurance plan offers death benefit to the nominee of the policy in the event of death of the insurance holder during the tenure of the policy. So, this plan is a type of life cover that offers coverage for defined period of time, and if the insured dies during the term of the policy then death benefit is payable to nominee.
The preimums charged for a Term Insurance Policy is very low because there is no investment component and the complete premium goes for covering the risk. Generally, no survival or maturity benefit is provided under this plan once the policy term expires. However, there may be few term plans that may offer to return the premiums paid by the policy holder if he survives.
To To choose best term plan one should look at various factors and compare the benefits/features of plans being offered by insurance companies. You must also understand and decide that how much cover you need and also check the claim settlement ratio. One can also take suggestions from their insurance advisor or financial planner as they have extensive knowledge and can suggest the best as needs.
Life Insurance protection plans ensure that your loved ones are never short in terms of financial resources to live the life of their dreams. While we cannot foresee our future, we can definitely make plans to ensure that the dreams of our loved ones are never compromised, thereby providing a strong 'foundation' of financial security for them.
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