What Happens When I Outlive My Term Insurance Plan?

What is a Term Life Insurance Plan?

As the name of the life insurance explains, a term insurance life is for a certain period, unlike a life insurance policy. This means, that if the policyholder dies within the tenure of the policy, the family of the insured gets the coverage and other benefits. As compared to all the other life insurance policy types, term insurance offers the highest coverage with very less premiums. You can in fact find some term insurance policies that provide coverage for partial or permanent disabilities of the policyholder.

4 Things You Can Do When You Outlive Your Term Insurance Plan

Many wonder about what may happen if they survive through the life insurance term plan tenure. Well, the simple answer to this question is that you get nothing. The coverage is offered only if you pass away within the tenure of the term insurance plan. Nevertheless, what you can do in one such situation is mentioned herein below:

1. Converting a term plan into a permanent policy

There are term life insurance plans that will let you convert it into a permanent policy. However, the process of conversion may differ from one insurance company to the other. If you can afford the premiums further, converting the term insurance plan can be the best option for you. Nevertheless, you must check the conversion option while buying a term insurance policy.

2. Term plan with Return of Premium option

While buying a term insurance plan, you can look for a term life insurance policy that comes with the Return of Premium option. This will let you get all the premiums that you paid, provided you outlive the policy tenure. You need to know that the premiums of such term plans are much higher than the regular term insurance policies.

3. Purchasing new policy

If you are in a good health and you can afford the premiums, you can buy a new term insurance policy. It will cost you lesser than converting a term plan into a permanent policy. Nevertheless, you would be required to undergo a medical test and provide all those documents that you had to submit while buying your previous policy.

4. Drop off the term plan

If you have saved enough for your family and they can manage well even when you are not there, you can just drop off the term insurance plan.

6 Reasons Why Buying a Term Insurance Plan Make Sense?

Many people may argue that purchasing a term insurance plan is of no good since you are not getting anything out of it if you survive through the tenure of the term plan. Well, looking on the other side of the coin, it does come with several benefits. Let us discuss some of them.

1. Easily understandable than other policies

When you are in the process of buying a term insurance plan is much easier as compared to purchasing some other insurance policy. You will not find complicated clauses or terms and conditions that can confuse you. The only thing that you need to do without fail is pay the premiums regularly on time.

2. Premiums are low

If we compare term plans with the other types of insurance plans, the premiums charged for them are lower; thus much more affordable.

3. Better sum assured

You can get higher coverage by paying a very minimal premium. The kind of coverage your family members will get after your demise is nowhere close to the premiums you pay.

4. Financial security

When you are not there in your family’s life all of a sudden, and if you are the only earning member of your family, it can be very challenging for the members. However, as they get the coverage, it can bring financial stability to their life.

5. Can be customized

You can customize your plan in terms of premium payment options. You can choose whether you want to pay premiums monthly, quarterly, half-yearly, or annually.

6. Rider benefits

Apart from the usual coverage, your family gets from the term plan, multiple benefits can be availed of on buying riders. There are various types of riders such as Income Benefit Add-On, Accelerated Death Benefit Add-On, Critical Illness Benefit Add-On, Waiver of Premium Add-on, etc.

If you want to buy the best term insurance plan in India, you must compare and find the one that suits your needs. And for this, you can visit a website that offers term insurance policies from various insurance companies. You can even use the term insurance plan calculator to get an idea of the premiums that you would be required to pay in the future.