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A specific kind of life insurance coverage is a term plan. When you buy a term plan, you will be covered for a predetermined amount of time or a specific “term”. The nominee of the life insurance policy is eligible to receive a death benefit from the insurance company equal to the sum assured if the insured person passes away within the defined term.
For instance, subject to the terms and circumstances of the policy contract, if the term insurance plan provides a sum assured of Rs 1 crore, the insurance company is obligated to pay that amount to the term plan nominee in the event that the insured person passes away.
What characteristics does a 1 cr term insurance have?
Term insurance policies are among the least expensive types of life insurance you can get. The premiums on a term plan are incredibly reasonable, especially when compared to permanent life insurance because a term plan is a pure life cover and has no savings component.
For the duration of the policy, many term insurance policies offer a constant dividend. If you purchase a “level term” policy, your premium will remain the same regardless of whether the term of your policy is 10 years, 20 years, or 30 years. After your term plan ends, a lot of term insurance policies also let you convert to permanent life insurance.
A sum assured of 1 cr term insurance will be available to a far wider range of people due to the low charges on term insurance. On the other hand, many people won’t be able to afford a cover of Rs 1 crore for an endowment plan. Consequently, term insurance is a convenient and cost-effective option for everyone to safeguard their family against unforeseen events. In reality, this plan is advised for people between the ages of 25 and 35 who earn between Rs 5 lakh -Rs 7 lakh per year.
Many insurance companies will also provide you the option to upgrade your coverage at crucial junctures in your life if you’re able to pay higher premiums as you become older. For instance, if you have a basic 1 cr term insurance plan, you can choose to pay slightly higher premiums to raise your sum assured when you get married or have a child.
In addition to the 1 cr term insurance plan, you can choose to add more coverage to your term plan, including a critical illness plan. The insured person is, therefore, qualified to receive a payment in the event of a critical illness, in addition to the death benefit payable to the nominee in the event of the insured person’s demise.
Insurance companies offer a number of alluring features to encourage the purchase of term policies. For instance, they provide special rates and reduced premiums to certain groups of people, such as nonsmokers.