Insurance

Qualities of a Good Term Insurance

Term insurance is very popular. There are many reasons for this popularity. First and foremost, the term insurance plans are very affordable. They offer a large life insurance cover at a very low rate. This makes it possible for everyone to own a term life insurance cover. The plans are available in various forms and you can attach add-on covers to them as well. These help you to make the plan more flexible and suited to your specific needs.

What is a TROP in term insurance?

Like mentioned above, term insurance is available in different forms. One of the most common types of term insurance is TROP or term insurance with return of premium. Here, you get back the premium you pay if you outlive the policy period. Usually, there is no return component in a term insurance plan. You pay the premium, maintain the plan and if you die, your beneficiaries get the death benefit. If you outlive the policy term, you do not get anything in return. In a TROP however, the last clause is different and there is a return component. Understandably therefore the premium of a TROP is higher than a regular term plan. TROPs are available from many top Indian life insurance providers. Do a quick online comparison on Coverfox.com to find the best TROP for yourself.

Apart from a TROP, the other types of term insurance include:

  • Level term insurance: The level term insurance plans are the standard plans. This is a pure and no-nonsense form of life insurance. You pay the premium and your family stands to receive a sum assured if you die before the policy expires. If you survive the period, you do not get anything back from the insurance provider. A level term plan is very inexpensive and offers a large life cover at a low rate, thereby making life insurance affordable for everyone.
  • Increasing term insurance: Next, we have the increasing term insurance plans. Here, the sum assured keeps increasing from time to time. In other words, your family stands to receive higher sums of money after every few years. If, for example, the sum assured is INR 50 lakhs today, it will jump up to INR 75 lakhs in another 10 years. The increasing term plans have been designed keeping the inflation in mind.
  • Decreasing term insurance: As the name suggests, this is the opposite of an increasing term plan. Here, the sum assured reduces as the policy progresses. A decreasing term plan is most commonly taken to cover a mortgage. As you keep paying off the loan, the value of the sum assured reduces and it finally perishes as the mortgage is cleared off.Related image

These are the types of term insurance that you can choose from. Analyse your requirements and see that kind of a term plan you need.

Riders and term insurance plan

Riders are add-on covers that are available with the term insurance plans. You have to pay an additional premium amount if you opt for a rider along with your basic term plan. Some of the popular term insurance riders include:

  1. Critical illness: Here, you get an additional sum assured if you are diagnosed with any critical illness.
  2. Waiver of premium: With this rider, the premiums of your plan are waived off if you lose your income due to a disability.
  3. Accidental death benefit: If you die due to a road accident, your nominees get an additional death benefit. The sum is pre-decided and helps your family to cope with the loss.
  4. Partial and permanent disability: If, due to a life-altering incident, you become temporarily or permanently disabled, you receive a sum assured which you can use as an income replacement.

These are the most popular and common term insurance riders. Choose the ones you need to make your cover well-rounded and comprehensive.

In conclusion

We can see how beneficial and logical a term insurance cover is. The various forms of term insurance and the options of adding riders make this impressive form of life insurance all the more attractive. So go ahead and choose a good term insurance cover for yourself. You may have different forms of insurance plans, but a term plan is a necessity. And since term insurance is so affordable, you won’t have too many difficulties to maintain the plan either. So what are you waiting for? Do some research and get your ideal term insurance cover right away.

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Mechelle Persaud

Mechelle Persaud

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