Term insurance is the most basic life insurance plan that offers coverage for a fixed period against the payment of a fixed premium. Most people are aware of a term insurance plan but lack information on all the benefits of term plans.

Buying a term plan that does not cater to your requirement defeats the purpose of purchasing life insurance to create a safety net for your family. Hence, if you are thinking of buying one, then make sure that you understand the Term Insurance advantages and disadvantages before signing the dotted line. 

Facts About Term Insurance That Everyone Should Know

Here are some term insurance hidden facts for your quick reference.

• A suitable sum assured at a lower price
  The life insurance segment has seen the launch of different types of plans like endowment plans, unit-linked insurance plans, money-back plans, etc. Most of these plans are saving-type of insurance plans. Usually, the sum assured and death benefit are different amounts. It is important to note that these plans do not offer a comprehensive cover like a term plan.
  
  Also, a term plan allows you to choose the term insurance sum assured and the policy term. Further, the premium amount is lesser than other saving-type insurance plans.
  
  
• Better coverage
  The term insurance coverage is usually more than other life insurance plans. Also, most insurance companies offer flexibility allowing you to increase the coverage by agreeing to pay more premium amount. Hence, you can get the amount of coverage you need to ensure the protection of your loved ones.
  
  
• Boost the sum assured of an active policy
  Most people are unaware of the fact that they can increase the sum assured of an active term insurance policy. Instead, they surrender the policy and purchase a new one with a higher sum assured.
  
  Tata AIA Life Insurance allows policyholders to boost the sum assured of some of the active policies at certain milestones in life. However, remember that increasing the sum assured can result in an increase in the premium amount.
  
  
• Insurance up to 100 can be possible
  One of the most interesting term life insurance facts is that some providers offer term plans to people up to 100 years of age! Hence, make sure that you shop for term insurance online and observe insurance companies and plans carefully to choose the best option for your needs.
  
  
• Hiding facts can impact term insurance claims
  Many people provide incorrect information while applying for a term insurance. This can be counterproductive as any such wrong information could result in the claim being rejected by the insurance provider.
  
  Hence, make sure that you disclose all information about yourself to avoid facing claim rejections in the future. Share information about any history of family diseases or habits like smoking or chewing tobacco with the insurer before buying the policy.
  
  
• Term insurance is a simple contract
  
  
  A term insurance policy is a basic contract between you and the insurance provider where you agree to pay the premium throughout the policy term. In return, the insurance provider promises to pay a pre-decided amount to your family after you are gone. If you survive the policy term, then you don’t get money.
  
  
• Types of term insurance
  Insurance companies offer a wide range of term insurance plans to cater to the different needs of people. Hence, make sure that you go through the different types of term plans offered and compare the features and benefits with your requirements to choose the perfect plan.
  
  
• Anyone can purchase a term insurance plan
  Until some years ago, it was believed that term insurance plans were only for the breadwinners of the family. However, there are no such restrictions. Anyone can buy a term insurance plan by paying the agreed premium regularly.
  
  
  

Conclusion

Since term life insurance plans do not offer any kind of money back, the premium paid is a pure expense to the policyholder. Therefore, many people had started opting for life insurance plans that offered some form of money back if the policyholder survived the policy term.  However, term insurance plans are pure life insurance plans with no riff-raff. 

L&C/Advt/2022/Aug/1997