Terms insurance policies are ‘protection oriented policies’ that provide a risk cover on the life of the insured. These policies do not accumulate any cash value, but provide life insurance for a specified period of time for a set amount of premium. There are no survival benefits associated with a Term insurance policy. In other words, the insured amount associated with a Term insurance policy is paid out to the nominees only in the event of policyholder’s death but nothing is payable to the policyholder if he survives the duration of the policy.
Since these policies cover only the risk element and provide no savings or wealth accumulation benefits, Term plans are amongst the cheapest form of insurance and should be actively considered to provide adequate financial protection to your family when you are not around.
It is advisable that when choosing how much insurance or risk cover to purchase, one should ensure that one’s needs for financial protection are adequately met. Please click here to see how to decide the right insurance amount for yourself.
Some of the variants of Terms plans that are available in the market are Level Term Plan, Mortgage Term Plan and Term Return of Premium Plan