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FAQ’s Related to Term Life Insurances

1. What is Term Insurance?

Term insurance plans are also referred to by the name of protection plan. The Term Insurance product is a true life insurance product which provides protection for a specific duration or specific “term” of years. If the insured dies within the time period stated in the policy, and the policy is still in force or is in force the death benefit is paid. The policies generally include a specific time frame that is assigned to them, which is often referred to in the “policy term” of the policy. If the person insured passes away during the time period, the nominees who are named on the insurance policy are paid the amount assured by the policy.

The amount assured by the policy is the amount the policyholder is willing to accept when purchasing the policy. It is important to know that term insurance policies don’t have a maturation value. That means that if the policy is deemed to be finished and the life assured alive, no benefits are paid to the person who is named as the nominee. Because of the same reason, term policies are generally the most low-cost life insurance options that are available to consumers. Because term plans are typically the most cost-effective method to ensure the future of yourself and your family members, they are also very popular in India. Yiploo Term Insurance Plans are the best option for you.

2. Types of Term Insurance?

These are some of the most common term insurance plans that are available for customers:

  • Level Term Plans
  • Decreasing Term Plans
  • Increasing Term Plans
  • TROP Plans (Return Of Premium)
  • Term Plans with Riders

Level Term Plans: Level Life insurance Plans pay the same amount, regardless of the time you die, which allows you to create long-term plans. Level Life insurance is a policy with an equal death benefit for the whole time you own it. The beneficiaries will receive the same amount, regardless of whether you die within the third or the 25th year in your 30-year plan. It could also be referred to as the level benefit term life insurance which highlights that the death benefits are an unchanging element of the policy.

Predictability is one of the major benefits of the term life insurance policy. You know the amount you’ll leave to your beneficiaries, regardless of what time you die as in the event that you do not expire the policy. This means you as well as your beneficiaries are able to plan your estate with one value in your mind.

Level term life insurance also permits you to benefit from your health. Since you’ll pay the same amount, and receive the same amount of coverage over the term of the plan, you’ll be able to get 10-20 or longer than thirty years’ protection depending on your current health.

Decreasing Term Plans: Decreasing term insurance is like traditional term insurance, but with one major distinction. In the case of decreasing terms, you will see the amount guaranteed that you have agreed to in the policy reduces each year, at a specific amount. Therefore, in the event for decreasing-term insurance the amount insured at the point of maturity of the policy would be zero. The price on decreasing-term insurance is typically less than traditional term insurance and remains the same throughout the duration of the policy.

This term plan is an excellent option for those seeking to purchase specifically to cover the risk of liabilities. If you’ve taken loans for your home or vehicle, or have any business liability, the strategy will ensure that your family members are not obligated to pay your debts once you’re gone. When you pay off your loans, the amount guaranteed will decrease too.

Increasing Term Plans: An increasing term insurance policy like the name suggests is a term-insurance plan where the amount guaranteed at the time of plan creation increases by a certain amount every year. An increasing term insurance plan assures that the amount you are insured increases by a certain amount every year. In the event that inflation is taken into account in conjunction with the growing requirements for financial assistance that could occur in the future, the amount assured is determined. In this way you are able to increase the amount insured at any time during the time the policy is in force.

In general, increasing term plans will help you achieve your financial goals for yourself and your family over various stages of life. This plan, for instance, lets you raise the amount of insurance coverage following major life circumstances (such as marriage, the birth of a child, etc..). The cost of premiums could or might not be in the same amount throughout the duration of the plan. The amount of coverage offered to the insured by this plan will be dependent on the health status that the person insured is at when they make the purchase.

Return Of Premium Plans: For those who are looking for an insurance policy that provides survival benefits along with death benefits can go for a term insurance policy that offers returns of the premium. The main benefit of a term insurance plan that has return of premium, also known as TROP is that the insured receives all premiums paid during the duration of the policy to be refunded at the policy’s maturity.

In a TROP, nominees receive the amount guaranteed should an insured’s death. If the insured lives to the duration of the policy and is able to pay back the premiums that they have paid throughout the duration of the policy. For instance, you buy the TROP policy that has a value assured of 50 lakhs, a tenure of 10 years, and an annual premium of 5000. If there is an unfortunate event, 50 lakh is paid out to the beneficiary. If the insured is able to survive the term of the policy and the insurer is able to be able to pay Rs. 50000.

Term Plans with Riders: Term insurance is among the most sought-after kinds of insurance that are available to Indians. These plans are typically focused on providing security to your family in the event unexpected and unforeseeable events. It is a suitable alternative for those looking to lead a life of peace with regard towards their families. Incorporating a separate rider into the term of your insurance plan can slightly increase the cost of your insurance. 

The amount will vary based on the kind of rider that is offered by you. The addition of these riders is not tied to the basic insurance policy or any other way. The best method to select these riders is to determine your future financial requirements before settling on the type of rider that meets your needs financially the most. Insurance companies offer a variety of types of riders to meet your financial requirements. The cost for these riders is dependent on your life insurance firm from which you’ve obtained the insurance. Yiploo has the best term plans, you can check them by contacting our advisors or visiting our website.

3. What are the benefits of Term Insurance Policies?

  • They have the affordable rate of premiums
  • Provide financial protection to you and your family
  • They have the high insurance cover with low premium rates
  • You have the option to add riders.
  • Options available for flexible premium payments.
  • Maturity benefits and survival benefits
  • Eligible for tax benefits
  • Stay covered till 85 years of age*
  • Offered safety to dependents for loans and debts
  • You have the financial cover for disabilities
  • Cover hundreds of critical illnesses.

4. How does a Term Insurance Plan Work?

  • A lump sum amount is paid to your family in the event that the policy holder or owner dies under the term of the insurance plan.
  • You may choose to benefit from term insurance as regular monthly income along with lump sum payment based on the choice.
  • Riders may add to the base insurance plan to get better protection in the event of an accident, death or disability, as well as critical illness at a low cost.

5. How to choose the best term insurance policy?

You should consider many factors when you are checking or comparing term insurance policies. These are some point you might consider:

  1. Claim settlement Ratio: It tells you for any particular year, how many plans have been settled.
  2. Solvency Ratio: It shows whether your insurance company is financially able to pay your claim and it should be 1.5 according to IRDAI.
  3. Benefits of RIders: Your company should provide rider benefits like critical illness, permanent disability, accidental death or other.
  4. Product details: You should always go through the terms and conditions page while buying your product to check features and benefits.