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

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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. T&C apply.

What Are The Advantages of Surviving Through A Term Plan?

As its name suggests, a life insurance plan is a financial product that offers you a life cover. However, there are several variants of life insurance plans that include an element of savings benefits in the long term.

 

You may be aware that, by default, a term plan does not provide a maturity benefit. If you are wondering what benefits you can get in case you survive through the tenure of a term plan, here is a detailed discussion on the subject.

 

Before we discuss the survival benefits of a term plan, let us understand what a term plan means.

 

What Is A Term Insurance Plan?

Term insurance is a pure life insurance plan that provides a life cover to assure a death benefit for your family in case of your demise during the policy term. In addition to this, it provides more sum assured than most other life insurance policies and at an affordable premium.

 

At Tata AIA, we offer a range of flexible features to enable you to modify a term plan as per your needs.

 

Here Are The Benefits Of Surviving The Tenure of Your Term Plan

 

 

let us now understand the survival benefits available under a term policy.

  1. Return of premium2 - Tata AIA offers a return of premium option with a term plan, depending on the type of term insurance plan that has been chosen. It is important that the policy has not been terminated at any stage throughout its tenure. This benefit is contingent upon you honouring your premium payment obligations across the plan's term.

  2. Regular income payout - If you have chosen a policy for receiving regular income, you must mention the age for starting the payouts. On attaining the income start age, you will start receiving the regular income. This payout shall continue until your death or the end of the policy term based on the terms and conditions specified therein. When you buy term insurance online, you can peruse the different available plans and compare them in order to select the one most suited to your financial needs.

  3. Financial assistance - The return of premium2 and the regular income are added advantages apart from the life insurance cover of a term plan. Therefore, a term plan can be considered an alternate source of income or financial assistance to help you fulfil your financial goals in an efficient manner. Here are a few instances of how a term plan can lend you financial assistance:

    • To pay off debts - The funds received under the survival benefit of a term plan can be used to repay your liabilities such as home loans, car loans etc. It can help you reduce the financial burden on your family in case of your unexpected demise at a later stage in life.

    • Vacation - If you have planned a family vacation to explore the world after your retirement, funding the expenses for the trip can certainly be an issue. You will have to save your retirement corpus to pay for your medical bills, routine expenses, etc. Therefore, the funds received at the maturity of a term plan can help you plan a leisure trip with your family without having to delve into your savings.

    • Retirement - Retirement requires a long-term financial plan. However, many of us fail to make the necessary investments in time for creating a substantial retirement corpus. It can be due to high family commitments or a lack of knowledge on how to go about retirement planning.

      However, if you decide to purchase a term plan, the return of premium option can be selected as a part of your term insurance benefits to assist you during your post-retirement life.
    • Investments - Many of you might have focused on investment avenues with very less-risk profiles to safeguard your money and for managing your financial commitments to your family. However, if you wish to invest in a plan with market-linked returns3 to earn morereturn, you can choose to invest the survival benefit from your term plan into an appropriate market-linked scheme.

    • Starting a new business – If you plan to start a new business post-retirement, it is quite uncertain that you will get a regular income from the business. You may find it difficult to face the consequent financial challenges and sustain the business. The income received from your life insurance term plan can serve as financial support until your business stabilises.

  4. Life insurance riders# - Riders# are one of the most important features of a term insurance policy. The rider# benefits, along with your survival benefit, can help you tackle the most difficult challenges with ease. For instance, suppose you have chosen the critical illness rider# as a part of your term policy and have subsequently been diagnosed with cancer during your policy term, you will get the sum insured for paying for your treatment during the policy term, and you can use the return of premium2 on maturity option to continue the treatment for complete recovery.
     

We have discussed some of the most prominent survival benefits of a term plan. You can use a term plan as an investment option by investing in it early, allocating a larger proportion of your income towards it, and staying invested in it for the longer term. 


Conclusion
 

Term insurance coverage can be considered one of the best ways to financially secure your family in your absence. However, there are several survival benefits of term plans in the form of the return of premium2 and regular income that can be used for various personal and family commitments.
 

In addition to the above, the add-on riders# available with term plans can help you handle a range of unfavourable events. Therefore, if you are planning to purchase a term plan, try to invest in it as early as possible for a lower premium and a longer policy term with a return of premium option and survival benefits. Such an approach can help you get the maximum protection and benefits from your term insurance plan. 

 

L&C/Advt/2023/Jan/0313

 

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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 the 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.
  • #Rider is not mandatory and is available for a nominal extra cost. For more details on benefits, premiums, and exclusions under the Rider, please contact Tata AIA Life's Insurance Advisor/ branch.
  • 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
  • 3Market-linked returns are subject to market risks and terms & conditions of the product. The assumed rate of returns or illustrated amount may not be guaranteed and depends on market fluctuations.