A life insurance policy will take care of the financial needs of your family in the event of your death. You may argue that you do not have a family who is financially dependent on you, but think of this, what if you have debts to pay and you suffer an untimely death? In such a case, your parents will need to carry the burden of your liabilities which you obviously do not want.
Life insurance will ensure that the future of your family is secured in your absence, but you should also know that life insurance premiums are not cheap. If you feel that you may not be able to afford the high premiums but would still like to safeguard your family’s future, term insurance is your best bet. In this article, we will talk about what term insurance is, what its benefits are, and which are the best term insurance plans in India.
What is Term Insurance?
A life insurance policy where the policyholder is insured for a ‘specified time period’ or ‘term’ is known as term insurance. The sum assured or death benefit will be paid out to the nominees if the policyholder dies during the policy tenure. Needless to say, there will be no payout made in case the policyholder survives the policy tenure. Term insurance is the best way to get maximum life coverage for the lowest premiums during the policy period.
What are the Benefits of Term Life Insurance?
When you buy term insurance, you are opting for a pure life cover which means that it is neither a savings scheme nor does it carry any profit component. This translates to you being able to enjoy higher life cover at a lower premium than you would if you opt for an endowment plan. Some of the other benefits offered by term insurance have been listed below:
- Unlike endowment insurance plans, term insurance plans are easier to understand as they do not carry any savings or profit components. All you need to know is, you pay the premium and you get covered for a fixed period. It’s that simple.
- Term insurance plans are competitively priced.
- Term insurance plans come with the flexibility of opting out whenever you like. The policy ends the moment you stop paying the premiums, which is when the risk cover will also cease.
- Though the premium you pay for a term insurance plan is low, you will still be able to reap the tax benefits under Section 80C of the Income Tax Act.
Best Term Insurance for Singles in India
Term insurance is ideal for individuals up to the age of 30 as the premiums are quite affordable and it comes with various other benefits that we have already discussed above. If you are already convinced that you should buy a term insurance plan despite being single, here are the top 5 term insurance plans offered by leading insurance providers in India.
- SBI Smart Shield – Offered by the State Bank of India (SBI), this term insurance plan offers comprehensive coverage with three rider options, rewards for maintaining a healthy lifestyle, and a minimum sum assured of Rs.25 lakh. The three rider options offered are – Accidental Death Benefit Rider, Accidental Total and Permanent Disability Benefit Rider, and Criti Care 13 Non-Linked Rider.
- ICICI Prudential iProtect Smart – The unique feature about this plan is that it offers claim payout when the policyholder is first diagnosed with any of the listed critical illnesses. It also offers four payout options in the form of – lump sum, income, increasing income, and lump sum plus income. Under this scheme, life coverage up to 99 years of age can be availed.
- LIC e-Term Insurance Plan – This is an online term insurance policy offered by Life Insurance Corporation of India (LIC). The policy can be purchased online without the involvement of any intermediaries. The premium rates under this plan can be categorised into two – aggregate lives and non-smoker lives. The non-smoker category can enjoy differential premium rates if the sum assured is above Rs.50 lakh.
- Max Online Term Plan Plus – This term plan offers coverage against death, disability, and disease. The plan comes with an option to choose regular income payout and add optional benefits such as premium waiver, critical illness cover, and accidental death and dismemberment. The premiums for this plan can be paid annually, half-yearly, quarterly, and monthly.
- PNB Metlife Mera Term Plan – This is a pure protection term plan that comes with an array of additional coverage options and at affordable costs. If you are a non-smoker, you will be entitled to receive preferred rates. The plans can be customised according to your changing needs and coverage can be availed for up to 99 years.
Buying a term insurance plan is a prudent financial decision when you are single as it will make you ready for the future and at the same time will help you not burden your parents with your liabilities when you are gone. Even if you survive the term of the plan, you will have cultivated a healthy habit of managing your finances which will go a long way when you decide to start a family. Now that you have all the knowledge about term insurance at your fingertips, all you need to do is go ahead and get one for yourself.