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  • Category: Insurance

    What is Term insurance?

    Are you interested in knowing more about term insurance? Looking out for detailed information? On this Ask Expert page check out detailed responses to your query.

    I am interested to know about term insurance. What are the benefits of term insurance? Which company offers term insurance plans?
  • Answers

    5 Answers found.
  • It is a life insurance plan which provides financial coverage to the beneficiary of the insured person.It is for a defined period of time. In case of the death of policyholder during the period of the policy, the beneficiary will get the death benefits from the insurance company.
    The death benefit is payable to the nominee or beneficiary who is usually a family member. We will have an option to choose between a lump-sum amount or a combination of lump-sum and monthly amount as per the requirement. Some insurance companies also cover permanent or partial disability if the policyholder's regular income is disrupted. In case the policyholder survives till the end of the period they may not pay any amount.The buyer has to obtain extended coverage with different payment condition or forgoes the coverage completely.
    Many companies are offering these policies. LIC of India, Kotak, Tata, Bajaj and many other companies are in the business.

    always confident

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    Insurance is an arrangement by which a company or the state undertakes to provide a guarantee of compensation for specified loss, damage, illness, or death in return for payment of a specified premium.This type of arrangement is called the Annual renewable term life insurance and is the cheapest option available. This implies that the death benefit will only be paid by the insurance company only if the insured person dies within the coverage period of that year.

    Term insurance, a type of life insurance, provides coverage for a certain period of time or years. If the insured dies over the policy tenure a death benefit (or sum assured) is paid out. No payout is made if the insured survives the tenure.

    The purpose of taking life insurance is to provide life cover to the policyholder and financial security to his family.

    There are two ways the individual can take life insurance:

    1. By opting for a pure life cover, also known as term insurance

    2. By taking life cover with a savings component built-in,also called endowment insurance

  • In India, term insurance, and Endowment life insurance and ULIP (Unit linked (life) insurance policy) are often used without much knowledge of the difference. Many people are misled with the idea 'that getting something in return at the end of policy is good' and hence 'life insurance is good'. Under this guise, a carrot is dangled in front of the unsuspecting customer who goes for a ULIP or a Life insurance policy and ends up paying a huge amount of premium every year for a return at the end of the policy

    Term Insurance is taken for a term (period) during which time, if the policyholder dies, unfortunately, the nominated member/s get the pre-set amount. If the policyholder outlives the term then nothing is paid out to him or the family.

    The advantages are
    1. lesser premium compared to other part return or ULIP policies
    2. can be taken online
    3. premium fixed amount every year or 6 monthly for the full term taken (20yrs,30 yrs,40 yrs)
    The disadvantages are
    1. apparent absence of any lump sum payment at the end if the policyholder survives.

    Many financial experts advise selecting a term policy as in the end money is save by the policyholder
    1. comparatively lesser premium
    2. premium fixed at the point of entry ( Eg Rs 20,000.00 in 2017 will be the same Rs 20,000.00 in 2037)
    3. ULIPS & Endowment plan promised returns have relatively low value ( Eg 10 lakhs being paid out in 2017 will have a higher purchasing power compared to the same 10 lakhs paid out in 2037). It like what our parents could by for Rs.100.00 and what we can now buy with the same Rs 100.00

    Lastly the key similarities: - all three payouts are given to nominee in the event of death of the policyholder
    The key differences
    Term Insurance: Life is insured, nothing is paid IF the policyholder lives
    ULIP: life is insured, something (depending on the market performance) is paid out at the end of the term if the policy holder lives.
    Endowment Policy: life is insured, a fixed or a guaranteed amount is paid out at the end of the term if the policyholder lives.

    It's worthwhile discussion with a financial advisor and checking the claims-settlement ratio of a particular policy or option you choose

  • Term insurance plans are protection plans for a definite number of years (in insurance sector it is called 'term'). Term Insurance plans are pure protection plan. This type of insurance offers a large cover at a comparatively low cost. Term insurance can be used to cover a large loan like home loan. Some term insurance plans also provide terminal illness benefit. Term insurance plans are most cost effective and are the simplest to understand by common men.

    Term insurance plans can be purchased online in our country. However, it must be remembered that Term Insurance plans don't offer maturity benefits or surrender benefits. It is immensely helpful to the nominee(s) in case of unfortunate death of the policy holder.

    Come on, have a fight. Don't shoot and scoot.

  • Life insurance plans are of two types - one is normal life insurance like LIC of India is giving since long times and other is term insurance which is given by so many companies today.

    In traditional life insurance policies the benefit was even obtained after the period of policy as the maturity amount on survival of policy holder. In case of unfortunate demise of policy holder the benefit was derived by the beneficiary during the period of policy. So it had both the advantages.

    The term insurance on the other hand gives the benefit to the beneficiary only in case of eventuality and not after the completion of policy. That is the reason that term insurance premiums are less in comparison to the traditional ones.

    There are many companies who have designed their term insurance plan in slightly different ways to lure the customers and accordingly their premiums change.

    Knowledge is power.

  • Insurance is a schedule by which community or condition attempt to impart a certification of allowance for particularized accident, damage to property or potential losses ,end of life or death in appearance for payment of a particularized premium. Insurance comapnies proceed by accumulate bit additions from many individuals who are apparent to threats. These significant addition which insurance companies accumulate known as premium.

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