Advantages of Term Life Insurance : Meaning, Features, Types and Benefits Of Choosing A Term Insurance At Younger Stage Of Life

In life we prioritize things depending on the aims and aspirations that we want to achieve. However, not always we can expect life to move as per our desire. There are many times when we have to change plans and act according to the need of the hour. Financial matters also work in the same way. We plan to save a certain amount for a particular task, but have to change it at the last moment if any other priority expense crops up or in case of any urgency.

Thus, having a financial security in the form of an insurance plan is a must. By getting a term insurance plan early on in life you can secure the life of your family in a better way. Though, there is no term insurance age limit, but buying a term plan early is better as it gives you an edge, and allows you to pay low premiums and enjoy greater coverage.

Also Read: Best 1 Crore Term Insurance Plans In India  

In this write-up, we will discuss about term life insurance in detail to make you understand the need of buying a term insurance at a younger stage to avail the benefits.

What do you know about Term Insurance?

Term insurance is a type of life insurance plan that provide coverage for your life. In term insurance, if the owner of the policy dies during the tenure of the plan, the beneficiary receives death benefit in the form of sum assured. However, it requires the term plan to remain active at the time of the death of the policy holder.

Though term plan can’t cover for the loss of the insured person, but it ensures that the family members of the policy owner doesn’t suffer because of financial burdens or stay deprive of the basic requirements of life.

Also, advantages of some term plans are not limited to death benefits but go beyond that. Such plans also cover the insured against any disability, including partial and permanent disability, caused by illness etc.

Though, there is no set rule on life insurance age limit, there are many benefits of buying a term plan early on in life. Let us now consider the various types of term plans that are available in the market.

Types of Term Insurance Plans?

Term plans are efficient plans crafted to ensure financial protection to people. These plans are divided into different categories to suit the need of consumer.

Level Term – This plan is the most basic one, where the sum assured doesn’t change. In the event of policy holder’s demise, the nominee receives the entire payment of death benefit.

Premium Return – This plan offers better maturity advantages. Thus, in this case if the policy owner survives the duration of the plan, he/she gets the premium refunded by the insurance provider.

Increasing Term –  As the name suggests, this plan allow the policy holder to increase the sum assured of the policy annually, though the premium rate of the plan stays the same.

Decreasing Term – In this plan, the policy owner can reduce the sum assured amount of the insurance with the passing of years. As such, with age the needs of people decreases, so this plan allow individuals to decrease the amount of sum assured.

Convertible Term – The benefit of convertible plan is that it allow consumers to change to another policy during the tenure of the plan. So, with convertible plan, you can choose to switch from term policies to whole insurance policies.  However, you have to wait till the term reaches its fifth year to do so.

Term with Rider –  Some term plans offer rider benefits to cover you for any critical illness, death due to accidents, or cover against disability etc. These add-ons can be enjoyed in a single term plan by paying extra premium.

Key features of Term Insurance

• You are entitled for tax benefits under term plans.

• The range of term period can be from 5 to 20 years.

• The minimum term plan age limit for entry is 18 years, while the maximum age for term insurance can go up to 65 years

• The average maturity might be at around 65-70 years, depending on the plan

• Survival benefits is offered in return of premium plans
• Add-on benefits also available with rider facility

Benefits of buying Term Insurance at a young age?

Below are the factors why you must buy a term plan early on in life:

• Lower premiums – At young age you do not suffer from many diseases, so you can pay lower premium amount. So, term plans are more cost-effective if purchased at young age.
• Financial security – It can reduce the burden of debts on a family in the event of death of the key earning member. Thus, it allow financial security to nominees of the policy holder.
• Tax- benefits – As per the income tax act of Section 80C, term plans allow tax benefits to everyone.
• For a life free of stress – With a term insurance in hand, one can think of living a life free of stress.

Some of the best term insurance plans in India are:

Some of the best Term Insurance plans in India are:

HDFC Life Click2 Protect Plus Term Plan

Feature: 

• Affordable with 97.62 percent premium rate
• Offer life coverage plus accidental benefit
• Tax benefits
• Monthly income option available for 15 years

ICICI Prudential – iProtect Smart Plan

Features:

• Affordable premium
• 96.66 percent claim rate
• Offer three compensation options
• Premium waiver option

LIC’s e-Term

Features:

• Traditional plan
• 98.31 percent claim rate
• Available for up to 35 years of tenure
• Annual premium payment
• Tax benefits

Max Life Online Term Plan

Features:

• Offers 97.81 percent claim rate
• Allow policy owner to avail loan on this plan
• Annual premium payment
• Tax benefits and rider benefits available

Tata AIA iRaksha Supreme

Features:

• Affordable Plan with 96.1 percent claim rate
• Available with 3 modes of premium paying facility
• Low rates for females and non-smokers
• Tax benefits

Also Read: How To Compare The Best Online Term Insurance Plan? | Know about Term Insurance Riders: How Do They Work? | What are the Things One Can Do When Their Term Insurance Policy Expires?

Conclusion 

So with all the above details, you now know the benefits of buying a plan at a younger age. Moreover, the above details will also help you to easily pick a term plan to suit you appropriately. There is no age limit for life insurance in India and there is nothing to worry about while planning to buy a term plan. All you need is to compare and read the policy conditions. Buying online might help you in this regard.