How to Choose a beneficial Term Insurance Plan

About Term Plans

Let’s understand the basics of term insurance for the less finance-savvy readers – a term plan is the most basic kind of life insurance wherein if the policyholder dies during the policy period then his family member (nominated person) gets a certain amount (sum assured). This is called the death benefit. But if the policy period is over and the policyholder is still alive then the insurance company does not remit any money back. Thus, there is no benefit on maturity of the policy. However, the most important feature of a term plan is that you will get a very high sum assured for a really low premium amount. For example, a Rs.50 lakh cover for a 35-year-old male will cost him approximately Rs.5000/- per annum.

Who Needs Term Plans?

If you are pondering over whether you need a term plan or not, then the answer is simple – Yes! Everyone who earns and has dependent(s) needs a term plan. It is a life long pursuit for each of us to earn, save, and look after our parents, spouse, children(s), other family members and last but not least- ourselves! But what if life is not long enough? Plan A should always be our income and savings, but Plan B, i.e., an adequate term insurance cover, should also be in place.

We keep getting many questions on how to choose the best term insurance plan or which is the best term plan or which is the cheapest one. So let’s go deep to understand more about it. Let’s begin with understanding the importance of it & later we will see 3 criteria to choose best term plan.