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5 Lesser Known Benefits of Term Insurance Plan

04-06-2022 |

There is no such thing as certainty in life and quite often, our most well-thought plans can fail. However, one thing that is certain in life is death. Therefore, it is necessary to make plans to secure the future of your family in the event of your passing. In this context, one of the easiest ways to achieve the above objective is buying a term plan.

What is a Term Insurance Policy?

A term insurance policy is a contract between an insurance company and a policyholder under which the former agrees to pay the nominee of the policyholder an assured sum in the event of their death before the expiration of the policy’s term. The insurance provider charges a premium amount from the policyholder as a consideration for the provision of the above service. The term plan you choose has to be aligned to various personal factors, such as age, number of dependents, your lifestyle, income and financial obligations for your family.

You can purchase a term life policy online by following a few easy steps. Firstly, you have to select an insurance company and visit their website. Secondly, you must choose a term plan that suits your financial goals and budget. Thirdly, you must add the features you want to include in the term plan and proceed with the purchase of the plan.

Tata AIA Life Insurance Company offers a range of term life insurance coverage options to suit varied needs. You can purchase a TATA AIA term insurance policy after computing the premium amount on the online premium calculator available on our website.

Not-so-Popular Benefits of a Term Insurance Plan 


You may be aware of the many benefits of a term insurance policy, including financial protection for one's family, tax* relief, low premium for a high insurance cover, and the option to include add-on features. However, in addition to the aforementioned popular benefits of a term life policy, there are several other advantages of a term plan that are relatively lesser known.

Some of the lesser known benefits of a term insurance plan are as follows.

  1. The option to pay the premium for a limited term

    Investing in a term insurance policy provides you the option to select the period during which you want to pay the policy premium. Therefore, you can select to pay the premium till the age of 40, 50, or 60 and enjoy a lower burden on your finances in the latter stages of your life.

    It is important to note that the sooner you start your investment in a term plan, the higher the flexibility of the period to make the premium payments is. Hence it is advisable to buy a term plan at an early age so that you do not have to bear the financial strain of paying insurance premiums post-retirement.

  2. The flexibility to choose the mode and frequency of the death benefit payout

    A term life policy also offers you the opportunity to select the mode and frequency of the payout of the death benefit to your nominee. Although the aforementioned payment is usually made in a lump sum mode, you can opt for monthly payments to ensure a regular stream of income for your loved ones. People who are the sole breadwinners of their respective households often opt for the aforementioned mode of payout to ensure constant financial support for their families.

    Furthermore, you can choose from two types of monthly income plans which have been listed below.

    • Fixed monthly income plan

    • Increasing monthly income plan

  3. The opportunity to increase your life cover as your earnings grow

    As you advance in your professional life, your financial capabilities get enhanced. Furthermore, your financial goals may also change with the passing of time. Therefore, most term plans have the option of enhancement of the life cover at a subsequent stage in the policy tenure. This feature enables you to increase your life cover and add more add-on benefits to your term insurance policy, thereby making it more comprehensive.

    It is common for people to start with a basic term plan and keep making modifications to it as their financial strength increases. Furthermore, if you happen to develop a medical condition after buying a term plan, you must enhance your life cover to include a cover for said condition. It is important to inform your insurance provider about any medical condition or illness and failure to do so may lead to your term life insurance policy being nullified and your insurance claim being rejected.

  4. Substantial benefit at a low cost and risk

    By purchasing a term insurance plan, you select an investment avenue that carries low risk as well as low cost. Although the 'no return of premium if the policyholder survives the term life policy tenure' clause is considered a limitation of a term plan, there is a way to ensure return of premium on term plan. You can add a 'return on premium2' feature to your term plan. This feature is one of the hidden facts of term insurance.

  5. The feature to avail waiver of the premium obligation

    Another term life insurance fact that is not popularly known is that you can choose to be free of your obligation to pay the policy premium in case you have a critical illness. However, you can opt for the aforementioned waiver of premium only if you have added said add-on feature in your term life policy.

Conclusion

There are many benefits of buying a term insurance policy, some of which are less widely known than others. Therefore, you must conduct thorough research before purchasing a term plan and ensure that it provides adequate financial security to yourself and your family.

L&C/Advt/2022/Jun/1118

***

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Need more information?

Let us help you

TATA AIA Life Insurance Co. Ltd will send you updates on your policy, new products & services, insurance solutions or related information. Select here to opt-in.

Looking to get a new plan? 

Connect with us now

+91

TATA AIA Life Insurance Co. Ltd will send you updates on your policy, new products & services, insurance solutions or related information. Select here to opt-in.

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Tata AIA Life Insurance

A joint venture between Tata Sons Pvt. Ltd. and AIA Group Ltd. (AIA), Tata AIA Life Insurance is one of the leading life insurance providers in India. We post everything you need to know about life insurance, tax savings and a variety of lateral topics such as savings and investments in this space. You can access and read a host of different blogs, articles and pages at the Tata AIA Life Insurance Knowledge Center or get in touch with us with any queries or questions!

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Disclaimer
  • Insurance cover is available under the product.
  • The products are underwritten by Tata AIA Life Insurance Company Ltd.
  • The plans are not a guaranteed issuance plan, and it will be subject to Company’s underwriting and acceptance.
  • For more details on risk factors, terms and conditions please read sales brochure carefully before concluding a sale.
  • This blog is for information and illustrative purposes only and does not purport to any financial or investment services and do not offer or form part of any offer or recommendation. The information is not and should not be regarded as investment advice or as a recommendation regarding any particular security or course of action.
  • Please know the associated risks and the applicable charges, from your Insurance agent or the Intermediary or policy document issued by the insurance company.
  • Every effort is made to ensure that all information contained in this blog is accurate at the date of publication, however, the Tata AIA Life shall not have any liability for any damages of any kind (including but not limited to errors and omissions) whatsoever relating to this material.
  • *Income Tax benefits would be available as per the prevailing income tax laws, subject to fulfilment of conditions stipulated therein. Income Tax laws are subject to change from time to time. Tata AIA Life Insurance Company Ltd. does not assume responsibility on tax implications mentioned anywhere in this document. Please consult your own tax consultant to know the tax benefits available to you.
  • 2Return of premium shall be the return of Total Premiums Paid (excluding loading for modal premiums and discount) by the policyholder at the end of the Income Period.

Need more information?

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TATA AIA Life Insurance Co. Ltd will send you updates on your policy, new products & services, insurance solutions or related information. Select here to opt-in.

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TATA AIA Life Insurance Co. Ltd will send you updates on your policy, new products & services, insurance solutions or related information. Select here to opt-in.