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Need assistance in choosing the right insurance plan? Get a call from our Expert.

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Types of Term Insurance Plans and How to Choose the Right One for You

With the COVID-19 pandemic spread across the entire world, many individuals have understood how important it is to be cautious and take extra measures to ensure the safety of their loved ones. One of the easiest ways to stay ahead of the virus is by taking the required steps provided by health organisations. Along with these precautionary measures, it is also important that individuals take measures to ensure their family's safety if something unfortunate happens to them. One of the insurance policies that fit perfectly here is the term life insurance plan.  
 

What is a term insurance plan? How does it work?
 

Term plans are life insurance plans that provide coverage to the policyholder for a pre-determined tenure. In a term insurance policy, the policyholder has to pay a specific premium amount decided at the time of policy purchase. Making the premium payments will uphold the policy and will ensure the beneficiaries get the death benefit from the plan. If the policyholder passes away during the policy's tenure, the lump sum amount is provided to the beneficiary as the death benefit. However, if they survive the policy's term, no benefits are paid to the policyholder or their beneficiaries. Among the different insurance plans available in the market, term plans provide an extensive sum assured for reasonable premiums.
 

Term plans also allow the policyholder to decide the policy's payout method in the event of a death benefit. Beneficiaries can opt for either a lump sum or getting the sum assured in portions at regular intervals. In recent times, many term plans have come with a renewal feature that will allow a policyholder to extend its term. 
 

With all the companies moving to the internet, purchasing a term plan has never been easier. Individuals can directly visit the insurer's official website and purchase the plan. Buying the plan online can be beneficial as individuals get access to different features like the insurance calculator. These calculators will help the customer make an informed decision. 
 

Benefits of a term insurance plan:
 
  • Term insurance are pure protection plans that offer extensive cover at affordable premiums.

  • The payout from a term plan secures your family’s financial future and enables them to live a dignified life even in your absence.

  • Term life plans can offer life cover up to 100 years of age.

  • You can enhance the cover of your term plan with attractive riders@ like Waiver of Premium or Accidental Death Benefit.

  • You can also get coverage against a host of critical illnesses with lump-sum payouts on the diagnosis.
     

If you're looking for a term plan, you must learn about the different types available in the market and how to choose a term insurance plan that will benefit you. 
 

Types of term insurance plans and who should opt for each:
 
  1. Standard term plans: These are simple and basic term insurance plans where the sum assured provided by the insurance company is fixed for the entire policy tenure, and the benefits are paid to the beneficiary when the policyholder passes away. It is optimal for individuals who are looking for pure insurance plans. 
     

  2. TROP plans: The Term with Return of Premium# plans is just like standard term plans with one distinctive feature. If the policyholder survives the policy's term in TROP plans, they get the entire premium amount paid towards the policy as a maturity benefit. These plans are suitable for individuals who wish to get term insurance coverage along with assured returns. 

  3. Increasing term plans: In an increasing term plan, the insurance coverage provided to the policyholder increases during the plan's tenure. The insurance policy will calculate the risk based on the cost rise during the policy tenure and provide appropriate compensation. The coverage will keep increasing until the policy is 1.5 times greater than the initial policy coverage. They are suitable for individuals who wish to upgrade their insurance policy as they go through different life stages.

  4. Decreasing term plans: In decreasing term plans, the premium rate and coverage will decrease at a specific rate during the policy's tenure. Decreasing term plans are suitable for people looking for low life insurance coverage since their financial responsibilities may decrease with time.
     

  5. Convertible term plans: Convertible term insurance plans are similar to traditional term plans, where a shorter policy term can be converted into a whole life life insurance policy. A big advantage of these plans is the policyholder can convert these plans into whole life plans without providing any medical proof to the insurer. They are beneficial for individuals who wish to get affordable term coverage, to begin with, and enhance the coverage once their liabilities start to grow. 

  6. Term plans with riders@: These term plans provide the policyholder to extend the insurance coverage they get from the plans with the help of riders. A rider@ is an add-on that can be included in the policy, which provides coverage for specific situations like critical illness diagnosis, accidental death, etc. For instance, if an individual gets the premium waiver rider, then if they are ever in a situation where they cannot keep up with the premium payments, their rider@ would become active and uphold the plan. These plans are suitable for individuals who wish to get coverage on specific instances with their policies.  
     

Maha Raksha Supreme from Tata AIA Life Insurance
 

The Tata AIA Life Insurance Maha Raksha Supreme Plan – A Non-Linked Non-Participating, Individual Life Insurance Pure Risk Premium Product (UIN: 110N102V04), is a comprehensive and customisable term plan cover that offers a range of benefits, including:
 

  1. An extensive Whole Life Coverage (till 100 years).

  2. An ‘Inbuilt Payout Accelerator’ benefit that provides 50% of the basic sum assured if the policyholder is diagnosed with a critical ailment.

  3. The Life Stage Plus option can also increase the cover at different stages of your life.

  4. With this Tata AIA term plan, choose from multiple premium payment modes - Single Pay, Limited Pay or pay premiums throughout the entire policy.


Further, the Tata AIA Life Insurance Maha Raksha Supreme - Non-Linked Non-Participating, Individual Life Insurance Pure Risk Premium Product (UIN: 110N102V04), offers very affordable premium rates for women policyholders and non-smokers.

 

Summing up
 

Term insurance plans are extraordinary plans that provide individuals with pure insurance coverage at affordable premiums. Nowadays, insurers provide various types of term plans that offer unique features, giving the policyholder the benefit of choice. However, individuals must analyse their requirements to select the apt term insurance. 

 

L&C/Advt/2023/Mar/0987

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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.
  • @Riders are not mandatory and are available for a nominal extra cost. For more details on the benefits, premiums and exclusions under the riders please refer to the Rider Brochure or contact our Insurance Advisor or visit our nearest branch office.
  • #Return 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.