Three reasons why term plan are THE insurance plans for you

Term life insurance is the simplest and also the cheapest form of insurance. In this type of insurance once the policy term is up or in case of the death of the policy holder, whichever’s first the nominee receives a lump sum payment from the insurer. If the policy holder outlives the policy he/she receives no benefit. But on the other hand the premium for term insurance is minimal. Hence opinion about this type of insurance is torn.

Term plans are the most cost effective way of insuring your life. It comes at a low premium and the pay-outs are sizable. It’s the most cost effective type of insurance policy. But the fact that on maturity the policy holder does not receive anything, since there is no investment option in this type of insurance is what holds people back from buying it. But there is a type of term life insurance that take care of that factor as well. These plans are called TROP or Term Return of Premium plans. 

These plans provide income replacement and refunds of the premiums paid at maturity, apart from offering all benefits of a traditional term life insurance plan.  You can also opt for life insurance riders like as Critical Illness and Accidental Death or Disability riders.

If there’s still a doubt in your mind about whether or not term plans are the best fit for you then let us clarify them for you with the following three points. 

1.  Simplicity: Term life insurance plans are straightforward. Unlike other insurance plans this type of insurance is simple and easy to understand even for the layman. This makes it easier for the policy holder to make proper, timely premium payments.

2.  Flexible: Opting out of a term life policy is much easier than getting out of other policies. In term policies if you stop paying premium the risk cover ceases and the policy ends. Nothing is payable to you as there is no savings element in the policy.  

3.  Renewable: Many term life insurance policies are "renewable" and "convertible." Renewability ensures that you can go in for another term policy without a medical exam at the end of the first term policy. Convertibility allows you to convert your term life policy into an endowment policy for the same sum assured with associated increase in premium, should this make sense during the term of the policy.