4 min read
Updated on Sep 18, 2022
If you know about term plans, you may have heard about the non-linked and non-participating term insurance policies offered by insurance providers. But do you exactly know what they are? Let’s find out!
A term plan is the best way to secure the life of your loved ones with comprehensive protection at a reasonable premium price. There are numerous insurance term plans offered by numerous insurance companies that can be bought by people to cover their family’s needs and liabilities at a time when the head of earning member is not there. One such term insurance plan is the non-linked and non-participating term plan. Do you know what these plans mean and how do they cater to your needs? Let’s find out by starting with what is linked and non linked insurance.
The term plans that are known as non-participating life insurance plans are the ones where the policyholder doesn’t get any added bonus or benefit declared by the insurer as dividend at different time periods of the policy tenure. This plan is also known as a non-par product insurance plan. So, in this case the insured has no share or participation in the profits earned by the insurer. Also, if the insured outlived the plan, they would not get any guaranteed returns at maturity.
Rather, in this case, the insured will simply pay their premiums and the nominee of the insured would receive death benefit (a prefixed amount) if the insured dies during the term of the policy.
As the name suggests, the non-linked term life insurance plans are those that are not related or have no link to the market. Here, whatever be the performance of the insurer in the market, it doesn’t affect the performance of your asset in the form of the insurance policy. Here again, you would pay a particular amount of premium as required by the term of the policy. And despite whatever be the market condition or performance of the insurance plan, your family or the nominee of the plan would get the sum assured in case of your demise during the tenure of the policy.
Read More: What Happens if the nominee of a Term Insurance Plan Dies?
1. They are not dependent on the market conditions
The best thing about non-linked, non-participating life insurance plans is that they are not affected by the market condition or the secondary market situations. These are pure and simple life covers that allow the nominee of the insured guaranteed support in case of demise of the insured, irrespective of the market conditions. Thus, this cover allow the family of the insured to have financial stability in the absence of the insured or the head earning member of the family.
2.They are low risk plans with guaranteed returns
These plans are low risk because they do not depend on the performance of the market conditions. They also do not allows the insured any share of the profit of the insurer or any bonus etc. earned by the insurance company.
3.These plans do not accumulate bonuses
Since these non-linked and non-participating term plans do not depend on the performance of the insurer, they do not allow the insured to earn any bonus or dividend on the plans.
4.These plans allow substantial coverage to the nominee of the insured at a reasonable rate
Another best thing about the non-linked and non-participating plans is that they allow the insured to get maximum coverage to their family at a nominal price.
There are advantages and limitations of almost every term plan be it linked and non linked life insurance. The non-linked and non-participating plans also have their share of limitations. You must check all the pros and cons of different plans before buying the best option as per your requirement and needs. You can even check the difference between linked and non linked insurance plans to understand which one would suit your needs better. There are many reputed insurance companies offering non-linked and non-participating insurance plans at substantial rates. You just need to search for the best one. Buying the best plan would suit your needs in the best possible ways.
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