Term Insurance plan and its uses
Term Insurance plan is a plain Life Insurance policy with no other benefits other than the death benefit. The Life Insurance plans can be divided into two parts. Insurance policy with returns and Term policy. With returns, the Policy is also called an Endowment plan which is a mix of insurance and savings.
Instead of paying the entire funds for insurance only, people prefer to go for Endowment plans, which give the policyholder coverage and returns on the investment with bonus accumulation.
In most cases, a Term plan is a pure life insurance plan with gives life coverage only and no return of premium. Nowadays, there are many kinds of Term plans in the market such as
- Regular Premium paying plans,
- Limited Premium paying term plans,
- Single Premium Term plans and
- Return of Premium plans
There are people who prefer term plans as they think the returns from the Endowment plans are very low. That is sometimes correct also.
What is Term Insurance and its benefits? Is the doubt many people have in their minds. Term plans are required for HNIs, NRIs, Professionals, Sports stars, film stars, and those who are having big obligations.
Buy Term plans when you are you and healthy. When you buy at a younger age the mortality charges would be less.
