The Covid-19 pandemic situation has brought dramatic changes in the perception of life insurance by common people. Many have realized the importance of adequate financial resources when there is a medical emergency. They have also felt the extent of family suffering when the only earning member passes away.

Demographic aspects like the growing middle class, rising insurable population beginning coverage, and the sudden increase in the awareness of the need for financial protection have increased the growth aspects of insurance in India.

Term Insurance is the simplest and purest form of life insurance that will suffice the basic needs for overall financial security. At present, insurers offer an online term plan that ensures easy and quick availability. It is extremely cost-effective as well. Let us discuss the different aspects about a term insurance plan in detail here.

 Term Insurance

Term Insurance is a basic life insurance plan wherein the insurance company and the person seeking coverage enter into a contract. The insurance company agrees to pay a lump sum amount, that is, the sum assured to the family members if the person meets with an unexpected death during the policy term. This amount is provided against the monthly premium amounts paid by the person for the set policy duration.

To understand the best term insurance plan for you in India, you should consider the different types of term insurance plans and the basic features that will serve the purpose best. Let us understand them in detail.

What are the different types of Term Insurance plans in India?

Based on the sum assured and the pattern of premium payments, the term policy is classified into four different types.  It can be utilized by people based on their income and requirements.

1. Level Term Insurance: A level term insurance plan is a basic plan where the premium amount and the sum assured remain the same throughout the policy term. The premium amount and the sum assured are stated in the policy agreement at the beginning of the policy. It is suitable for people with a regular income and many financial commitments who are unsure about the expenses.
   
   
2. Increasing Term Insurance: In an increasing term plan life insurance, the premium remains the same throughout the policy term. However, the sum assured keeps increasing every year on account of the changes in inflation. There will be a threshold limit up to which the sum assured will increase and can be paid. The cost of increasing term insurance is slightly higher in comparison. It is suitable for people having a sophisticated and rich lifestyle.
   
   
3. Decreasing Term Insurance: In decreasing term insurance policy, the sum assured keeps decreasing while the premium amount remains constant. It is preferred by people who choose the sum assured to repay a loan which might keep decreasing over the policy duration. It is also useful to those whose children have started earning and taking up financial commitments and responsibilities.
   
   
4. Term plan with Return of Premium (TROP): A Term plan with Return of Premium (TROP) will refund the premium amount paid on maturity if the policyholder outlives the policy term. If he meets with an unexpected death, the nominee will receive the sum assured.
   
   

Features that define the Best Term Insurance

Having discussed the different types of term life insurance policies, we must discuss the basic features that term insurance policies should offer. The quality of these features, their usability and accessibility are important.

• Flexibility:
  
  

  There must be flexibility in the premium payment mode and frequency that allows for monthly, quarterly or half-yearly payments. After deciding on the frequency of payments, you can use a premium calculator to compare the amount with different companies and choose an affordable term insurance solution. You can buy term plan online and pay the premium regularly.
  
  

• Riders^#:
  
  

  To extend the benefits of term insurance, the insurers provide add-on rider options. The commonly provided riders are accidental death rider, terminal illness rider, critical illness rider and disability rider and hospitalization benefit rider.
  
  

  The terminal illness and the critical illness riders will make the sum assured payable when the illness is first diagnosed. There is a list of critical illness disorders that are covered.
  
  

  With the disability rider, the sum assured becomes payable when the policyholder gets permanently disabled due to an accident. With the accidental death rider, the sum assured is paid if the insured person dies due to an accident as against natural death.
  
  

• Payout options:
  
  

  It is preferable if multiple payout options like a lump sum amount or a regular monthly income or a combination of a lump sum and a regular income for a set period are provided.
  
  

• Customer service:
  
  

  Understanding the financial commitments and choosing the right plan requires a lot of effort. We must get expert guidance and the right support to understand the terminologies for the right policy. Good customer service can help in this regard.
  
  

  Tata AIA Term Plan offers a dedicated team of insurance experts to provide efficient and quick customer support, digitally and otherwise.
  
  

Conclusion

We have discussed the importance of term insurance, the different types of plans and the necessary features required from a plan. Now, it is time to evaluate your financial commitments, the budget for premium and long-term goals to zero in on the right plan for you. Consider the type of insurance based on your needs. It is different and definite for every individual! The exact term insurance that satisfies your need and provides all the essential features will be the Best term insurance for you in India.

L&C/Advt/2021/Aug/1445