Any individual would want to make sure that their family will be safe and financially secured in the event of their untimely death. The primary purpose of a term insurance plan is just that. A term insurance plan is the most affordable life insurance product available in the market. The policy provides a lump sum benefit to the beneficiaries if the policyholder dies during the tenure.
However, a basic term insurance plan is known to offer death benefits only. But to enhance the scope of the policy, insurers in India provide different variants of the term plan. Let us take a look at each variant in elaborate details and see which one you should buy.
Types of Term Insurance Plans in India
- Level Term Insurance Plan
A level term insurance plan is very much like the basic term insurance policy. The only difference is that in level term plans the sum assured amount remains constant throughout the tenure. The amount is pre-determined and is given to the beneficiaries if the insured dies during the policy tenure.
- Term Return of Premium Plan (TROP)
For those looking for maturity benefits on their term insurance plan should opt for Term Return of Premium Plan (TROP). TROP is a unique facility offered by insurers on basic term insurance plans.
With this feature, the insurer is liable to repay the premiums paid towards the policy in case the insured outlives the tenure. This amount acts as maturity benefits on the term insurance plan. However, know that the beneficiaries will not receive any benefits if the insured survives the policy term.
- Increasing Term Insurance Plan
As the name suggests, the increasing term insurance plan allows the insured to increase the sum assured amount on an annual basis throughout the policy term. However, note that you will have to pay additional premiums every time you decide to increase your term insurance coverage.
- Decreasing Term Insurance Plan
As opposed to increasing term insurance plans, in decreasing term insurance, the sum assured amount decreases every year. This term insurance plan comes in handy when you (the insured) have financial liabilities to repay.
Moreover, as the sum assured amount in the decreasing term insurance plan reduces, so will the premiums you pay. So, if you want to make sure that your financial liabilities do not overburden your family after your death, this term plan is your go-to choice.
- Convertible Term Insurance Plan
The convertible term insurance plan allows you to transform your policy into another type of life insurance product at a set future date. For instance, if your term insurance policy tenure is 20 years, and the plan allows you to convert the policy into an endowment plan in seven years, you have the liberty to do so.
- Term Insurance with Riders
To enhance the scope of the term insurance plans, insurers in India offer rider benefits. Some of the worthy rider benefits that you can consider opting are as follows –
- Critical illness benefit
- Accidental death benefit
- The return of premium benefit
- Waiver of premium benefit
- Income benefit
Know that the term insurance premiums will increase with each rider benefit you opt. You can use the term insurance calculator to determine the premiums charged on your chosen coverage and rider benefits before buying the policy.
- Group Term Insurance Plan
Group term insurance plans are designed for communities, businesses, and organisations. The policy provides coverage to all the eligible members of the group. It tends to have similar benefits as that of individual term insurance plans, except for the fact that the overall coverage might include other customisable factors that are not involved in individual term plans.
Whether you want to buy a term insurance plan for yourself or a group of people, make sure to look at the coverage, features and benefits, exclusions, premiums, etc. of the policy. Consider taking a look at Bajaj term insurance plans at Finserv MARKETS, as you might stumble upon a plan that fulfils yours and your family’s needs.