Term-Insurance-Plans
By Okbima 16 Jan 2023 47

What is Term Insurance? - Benefits & Types

 

Term insurance is a type of life insurance that provides financial protection to your loved ones in the event of your untimely death. It is the most basic and affordable type of life insurance, and it is a good option for people who want to protect their loved ones without breaking the bank.

It offers coverage for a specified period, during which if the policyholder passes away, a tax-free death benefit is paid to the beneficiaries. The benefits of term insurance include affordability, customizability, and the assurance of financial security for your family. 

There are various types of term insurance, such as level term, decreasing term, convertible term, and renewable term, each catering to specific needs and preferences. In this blog, we’ve mentioned all the details that you should know to buy term insurance.

 

Types of Term Insurance Plans

There are different types of term insurance plans available, each with its own unique features and benefits. Some of the most common types of term insurance plans include:

1. Level term insurance

Level term insurance is the most basic and straightforward type of term insurance. In this plan, the sum assured or death benefit remains constant throughout the policy term. It offers a fixed payout to the nominee in case of the policyholder's demise, ensuring financial stability.

2. Increasing term insurance

In an increasing term insurance plan, the sum assured increases at regular intervals during the policy term. This increase can be a fixed percentage or linked to inflation. This type of plan is designed to counter the effect of inflation, ensuring that the coverage amount maintains its value over time.

3. Decreasing term insurance

Decreasing term insurance is often used to cover specific financial liabilities with decreasing outstanding balances, such as home loans or other debts. In this plan, the sum assured decreases over the policy term, aligning with the decreasing financial obligations. It's a cost-effective way to ensure that these debts are paid off in case of the policyholder's demise.

4. Return-of-premium (ROP) term insurance

ROP term insurance is a unique variant that offers a refund of the total premiums paid if the policyholder survives the policy term. Upon the policyholder's passing, the designated beneficiary receives the assured sum. While it provides the advantage of premium return, ROP plans typically have higher premiums compared to standard term plans.

5. Convertible Term Insurance

Convertible term insurance provides the flexibility to convert the policy into a permanent life insurance plan, such as whole life or endowment insurance, without the need for a medical examination. This allows policyholders to adapt to changing financial circumstances and long-term goals.

 

Confused about term insurance? Ask our experts today!

 

Benefits of Term Insurance Plans

There are so many benefits to buying a term insurance plan. So, let's get into the details of the mentioned points:

1. High Coverage Amount

Term insurance plans offer a significant coverage amount, also known as the sum assured. This means that in the unfortunate event of the policyholder's demise during the policy term, the beneficiaries will receive a substantial lump sum payout. 

This amount can range from several lakhs to crores, ensuring that your family's financial needs are met comprehensively. High coverage offers peace of mind, knowing that your loved ones will be well protected.

2. Customizable Options

Term insurance plans are highly customizable to suit individual needs. You can select the coverage amount, and policy term, and even add riders to enhance the coverage. These riders can include critical illness riders, accidental death riders, or disability riders, providing additional protection based on your specific requirements. This customization ensures that the policy aligns perfectly with your financial goals and circumstances.

3. Accessibility

Term insurance is easily accessible. It is available through various insurance providers, both traditional and online. The application process is straightforward, and many insurance companies offer the option to purchase term insurance online. This accessibility and convenience make it a popular choice for individuals looking to secure their family's financial future.

4. Low Waiting Period

Term insurance plans typically have a low waiting period before they become effective. This means that shortly after purchasing the policy, your coverage is active. This feature ensures that your loved ones are protected without unnecessary delays, providing immediate financial security.

5. Wealth Preservation

One of the crucial benefits of term insurance is wealth preservation. In the event of the policyholder's demise, the death benefit provided to the beneficiaries can help preserve the wealth and assets accumulated over the years. It prevents the need to liquidate investments or assets to meet financial obligations and allows your family to maintain their financial stability.

 

How to Buy Term Insurance Online?

Buying term insurance online is a quick and easy process. You can compare different plans and quotes from multiple insurers online, and then purchase the plan that best meets your needs. To buy term insurance online, you will need to follow the below steps:

1. Research and Choose the Right Plan

• Start by researching different insurance providers and their term insurance plans. Look for reputable insurers with a strong track record of claim settlement and good customer service.

• Compare various plans based on factors like premium rates, policy features, and additional riders.

• Determine the coverage amount (sum assured) and policy term that align with your financial needs and goals.

2. Online Application and Documentation

• Visit the chosen insurer's official website to initiate the online application process.

• Fill out the application form and be honest in disclosing your medical history and lifestyle habits.

• Use the insurer's online premium calculator to estimate the premium amount based on your chosen coverage and personal information.

3. Premium Payment and Policy Issuance

• Once you've completed the application and reviewed the policy terms and conditions, proceed to make the premium payment and you will receive the policy document via email. 

• Nominate beneficiaries who will receive the policy benefits in the event of your demise. Ensure that the nominee details are accurate and up to date.

 

Buy Term Insurance from Okbima

Okbima is a leading online insurance marketplace that offers a wide range of term insurance plans from top insurers. We make it easy to compare different plans and quotes so that you can find the best plan for your needs. To buy term insurance from Okbima is a simple process that can be completed in three easy steps:

Step 1: Visit the Okbima Website and compare different term insurance plans.

Step 2: Choose a plan and complete your application process.

Step 3: Complete your payment. Once the payment is confirmed, you’ll receive a term insurance policy on your email ID.

 

Secure your family's future today – Get a free quote!

 

Conclusion:

In conclusion, term insurance stands as a fundamental pillar of financial security and future planning. It offers individuals and their families protection against life's uncertainties. By opting for term insurance, you ensure that your loved ones are safe from the financial burdens that may arise in your absence. 

The affordability and simplicity of term insurance plans make them accessible to a broad individuals. It is a cost-effective means to provide your family with the protection and stability they need. So, whether you are in the early stages of your career or enjoying retirement, term insurance remains an essential tool for securing your family's well-being and financial future. Buy Term Insurance from Okbima today and secure your family's future!

 

FAQs

What Happens if I Miss a Premium Payment?

Missing premium payments can result in a policy lapse or termination. However, many insurance companies offer a grace period during which you can make the payment without losing coverage. It's essential to understand your policy's specific grace period and terms.
 

Is Term Insurance Suitable for Everyone?

Term insurance is generally suitable for individuals who want straightforward life insurance coverage for a specific period. However, it may not be the best choice for those seeking investment or savings components in their insurance policy.

 

Do I Need a Medical Exam for Term Insurance?

Whether a medical exam is required depends on the insurance company and the coverage amount. Higher coverage amounts may necessitate a medical exam to assess your health and determine the premium rate.


 

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