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What is Term Insurance? Definition and Meaning of Term Plan

What is Term Insurance? It is the most affordable form of life insurance, remaining effective for a specific period. Term plans are easy to understand and ensure your financial security.

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What is Term Insurance? Definition and Meaning of Term Plan

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  1. What is Term Insurance

  2. What is Term Insurance? Definition & Meaning What is Term Insurance? Term insurance serves as a life insurance product that furnishes financial coverage to the policyholder over a specified duration. In the event of the insured individual's demise during the policy term, the company disburses the death benefit to the beneficiary. It is essential to understand the key features of term insurance and the reasons to opt for it before making a purchase. The primary objective of life insurance is to supply life coverage to the policyholder, ensuring financial security for their family. Individuals can acquire life insurance through two avenues: selecting pure life cover, commonly known as term insurance, or choosing life cover with an integrated savings component, referred to as endowment insurance.

  3. Why Term Insurance is better? Term plans provide pure life cover. This means there is no savings / profits component. They are basic plans which make life insurance more affordable vis-à-vis other options. It is possible for the policyholder to opt for a larger life cover at a lower premium when compared to a similar endowment plan.

  4. Who should buy Term Insurance plans? Term insurance plans are for everybody. They provide life cover at affordable premiums for everyone, be it a business person or a salaried employee. They are an excellent hedge against the uncertainties of life at any age. For those in their 20s, it is a prudent move to start with a plan that gives high cover for a low premium, while for those in their 30s with growing families and increasing liabilities, it is a good protection from financial uncertainties. For those in their late 40s and 50s too, term insurance can give adequate coverage for responsibilities like children's education and weddings, while allowing them to plan for their retirement.

  5. Thank You

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