Term insurance is a crucial element of financial planning. Term insurance is a pure and basic form of insurance that provides your family an adequate financial protection even when you are not around. These pure life insurance plans with high amount of coverage can be availed for a specific period of time (term) at relatively lower cost of premium. However, it’s important to buy the right term plan at the right age with the right coverage.
There are currently 24 life insurance companies operating in India. Every insurer offers various term plans to fit into various customer needs. With plenty of similar offerings, it’s quite challenging to choose the best term plan that suits your individual need. Along with various number of plans, there are various ways to get the term insurance plan. However, the online platform has been gaining huge popularity with the ease, convenience and cost efficiency that it offers.
Coverfox is an online insurance portal that is super user-friendly platform which helps you compare tonnes of term plans available in the market on a side-by-side basis. Plans from multiple life insurers can be compared on the basis of quotes, coverage, benefits, additional riders and claim settlement ratio and on various other parameters. With all the information being available on a single platform, it helps you make an informed and unbiased decision.
Risks of Term Insurance Plan
A pure term insurance plan is designed to provide coverage against life risk. That means only the loss of life is covered under pure term plans. And the coverage offered by such plans are usually higher at a lesser rate of premium. Term plans provide financial protection to dependant family member or nominee of the policy holder in the event of his/her death during the specified policy term. Lump sum death benefit received can give adequate financial stability to family of the deceased. Amount received can be used to pay off debts, for children education and marriage and also can be saved for earning monthly income out of it. If the policy holder survives the term, nothing will be paid on maturity of the policy. However, there are plenty of plans today that comes with various added benefits in the form of riders like accidental cover, disablement cover and critical illness cover etc. There are also an option to claim death benefits in monthly instalment as a way of income replacement.
Amidst all these amazing set of benefits and features, term plans do come with certain limitations. Here are few of them.
- Cost of term plans increases with the increasing age. Buying them at later age comes with lot of exclusions also. Hence, it’s difficult to get a comprehensive plan as you age.
- Term plans do not come with investment component. Although these are the only plans that can give complete protection to your family against life’s uncertainties during the term, but are not exclusively to meet life goals like children education and retirement needs etc.
- You will get nothing if you surrender a policy during the policy term.
- Term plans with return of premium options are available. But, these plans are not meant for exclusive investment purposes as they do not provide any hedge against inflation.
- Term plans are exclusively for life protection not for wealth creation.
With knowing risks of term plan, it’s clear that term insurance plans are an essential cost to any breadwinner having dependents. But, it’s equally essential to avail them at the right age to avoid extra cost.
Best Term Insurance Plans of the Year
To make the search process easy for you, here are few best term insurance plans of the year.
Max Life Term Insurance Plan Plus
- Plan offers you coverage up to Rs.100 crores with a maximum maturity age of 70 years.
- Coverage can be availed in three ways –basic life cover, basic life cover along with monthly cover or basic cover along with increasing monthly cover.
- Accidental benefit rider can be availed at an added cost.
- Comparatively lower in cost with high claim settlement ratio of FY 2016-17 is 97.8%.
LIC e-Term Insurance Plan
- Plan from pioneer in insurance industry with highest claim settlement ratio of 98%
- There is no limit on sum assured with maximum maturity of 75 years
- Flexible policy tenure from 10 to 35 years with no rider option
AEGON Religare iTerm Insurance Plan
- A plan that offers excellent features at low rate of premium
- There is no limit on maximum coverage that can be availed.
- Policy tenure can vary from 5 years to 40 years with maximum maturity age of 75 years
- There are two types of option to avail coverage – simple lump sum death benefit or 50% death benefit as lump sum + 3% of sum assured every month for 5 years.
- A good claim settlement ratio of 97.1% for the FY 2016-17.
ICICI iProtect Smart Term Insurance Plan
- Policy comes with an amazing feature of critical illness as an optional rider- around 34 critical illnesses are covered.
- Plan comes in four variants – life, life plus, life and health, all in one cover
- Plan comes with no limit on maximum sum assured with maximum maturity age of 75 years.
- Claim settlement ratio of 96.6% for the FY 2016-17.
In a nutshell, term insurance is the only inexpensive way to ensure complete financial protection to your family in the event of uncertainties. However, to avail inexpensive extensive coverage, it’s important to buy the best policy at the right age on a right platform. Now, you can compare and avail the best term plan suitable to your need instantly on Coverfox.