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Introduction
For instance, you are going on a solo trip to Kashmir. But, you forgot to take your sweaters and other warm clothes and just packed summer-friendly clothes. Isn’t this a show of utter stupidity and carelessness?
It is how life insurance and life are interconnected. Owning life insurance is a mandate, and one should never underestimate it’s a necessity in life because catastrophes or unfortunate events don’t inform and arrive.
This blog will enlighten you about:
- What is life insurance and its importance?
- Types of Life Insurance.
- Why is Term Insurance the Best of Life insurances?
- What are the Best Term Insurance Plans in India?
Let us take a deeper dive into the insurance world and make your life jacket set for the year 2022.
Life Insurance, Importance, and Types
Let us suppose that Devi is a widow and sole bread earner in the family. But, all of a sudden, she meets with an unfortunate death. Now, what about her two children and aged in-laws?
It is where life insurance comes into play.
One can call life insurance the other name for security because this safety net comes in handy when you need money the most. Your relatives might fold their hands, but a worthy insurance company shall always have your back.
Life insurance acts like a life jacket where the policyholder pays premiums to the insurance company based on the selected life insurance type and plan. The deal is, in exchange for the premium payments, the insurer pays an amount promised to the nominee (s) when the policyholder meets with an untimely death.
Now, if the policyholder doesn’t meet with death and the policy matures, the insurance company will pay the individual or his family a lump sum payment after a specific period.
Apart from death benefits, life insurance is a beneficial deal because:
- They help in having a happy and income-tax-friendly sail.
- Help in investing your money rightly.
- Maturity benefits.
- Secure one’s life for the post-retirement phase
- Safeguards the future of the family and children without compromising much on the lifestyle.
There are many types of life insurance that one could use based on different needs and packet allowance, and they are as follows:
- Term insurance
- Unit Linked Insurance Plans (ULIP)
- Health Insurance Policy
- Retirement Plan
- Endowment plans
- Whole life insurance
- Group life insurance
- Child Insurance Plans
What is term insurance?
Term insurance is considered one of the beneficial types of life insurance because it is more comprehensive and covers all significant required chunks that one would require from life insurance.
People have selected term plans as a means of saving money for life’s financial challenges as their acceptability has grown. In India, term insurance prevalence is 30%, with a modest surge in policy purchases during the epidemic. Regardless of how much the buying conditions and market share increase.
As the name suggests, term insurance is a type of life insurance that provides a secure bubble for you and your loved ones for a specific period of years. The insurance company shall pay the death benefit of the policyholder to the nominee (s) if the policyholder dies during the active policy.
Term life insurance is comparatively less expensive than traditional life insurance.
However, the benefits of a term insurance policy are not limited to death benefits. Certain insurance companies provide cover for the policyholder’s permanent or partial disability. Here, the money covered can be collected in a lump amount or as a series of monthly installments.
There are different types of term insurances available, and they are as follows:
- Standard Term Insurance Plan
- Joint Life Term Insurance Plan
- Increasing Term Insurance Plan
- Term Return of Premium
- Decreasing Term Insurance Plan
- Life Stage Event Term Insurance Plan
- Group Term Insurance Plan
- Convertible Term Insurance Plan
Best Term Insurance Plans in India
After learning about life insurance, term insurance, its importance, and types, let’s look at some of India’s best term insurance plans that you can consider buying in 2022.
Aditya Birla Sun Life Insurance DigiShield Plan
This top-tier term insurance plan includes ten alternatives to meet your varying protection needs depending on age and other factors. ABSLI’s DigiShield ‘Sabka Vala Term Plan’ pans out a single answer for everybody by offering multiple Options in the plan. The 10 Options in this comprehensive plan are as follows:
1. Level Cover Option
2. Increasing Cover Option
3. Sum Assured Reduction Option
4. Whole Life Option (Level Cover)
5. Whole Life Option (Sum Assured Reduction Cover)
6. Income Benefit
7. Level Cover plus Income Benefit
8. Low Cover Option
9. Level Cover with Survival Benefit
10. Return of Premium (ROP)
Enhanced Life Stage Protection: What is life without any add-ons? Life takes you to new developments such as marriage, owning a home, and childbirth as you keep growing. Select this benefit at the commencement of your policy. You will be able to increase your life cover (Sum Assured) in the event of any of the incidents mentioned above without having to undergo a new medical examination.
Death Benefit: If the policyholder meets with untimely death within the Policy Term, the Death Benefit will be paid to the nominee (s)/legal heir(s) directed by the policyholder.
Survival Benefit: This benefit ensures that a monthly survival Benefit of 0.12% of the Sum Assured is paid beginning with the first policy month anniversary immediately after the event and continuing for each policy month anniversary until the end of the term or the death of the policyholder, whichever occurs first.
Terminal Illness Benefit: For instance, you are diagnosed with a chronic disease during the policy term. Under this feature up to the age of 80, and if the policy is still in force, you will receive a lump-sum payment of 50% of the relevant amount assured on death, up to a maximum of Rs. 2 crores; all future premiums will be canceled.
Note: Before nodding a yes, thoroughly read through the Options whether you are signing for the right deal.
Read more about ABSLI DigiShield Plan and know whether it is the deal-breaker for you or not.
Aditya Birla Sun Life Insurance Life Shield Plan
Next in line is this unique plan that offers a comprehensive strategy that allows you to establish a haven for your loved ones even when you are not present.
This policy comes in handy with over eight plan options, and they are as follows:
1. Level Term Assurance
2. Level Term Assurance with Waiver of Premium (WOP) Benefits
3. Increasing Term Assurance
4. Increasing Term Assurance with Waiver of Premium (WOP) Benefits
5. Decreasing Term Assurance
6. Decreasing Term Assurance with Waiver of Premium (WOP) Benefits
7. Return of Premium
8. Return of Premium with Waiver of Premium (WOP) Benefit
Inbuilt terminal sickness benefit: Under this feature, if you are diagnosed with a terminal disease when the policy is active, you will get 50% of the relevant sum assured on death, up to Rs. 2.5 crore, instantly. The rest of the remaining premiums on your policy would be annulled.
Enhanced life stage protection: With this benefit, you can increase your coverage following the positive occurrences in life, such as – marriage and children, without taking a medical test.
Waiver of Premium: If the policyholder suffers from total and permanent disability or severe sickness when the term is active, all future premiums will be waived, and the policy’s death benefit will be unaffected.
Joint Life Protection: This feature allows you to club your wife in the term plan. Your spouse’s relevant sum assured will be equal to half of your applicable sum assured.
Return of Premium option: Under this benefit, if you survive to reach the end of the insurance term, the whole amount of all premiums paid will be reimbursed to you on the policy maturity period.
Note: Read through the Options before taking any decision.
HDFC Life Click 2 Protect Plus
Do you require comprehensive life insurance that can wear numerous hats in the event of both terrible and sound events in your life? Then this might turn out to be a decent term insurance plan for you.
Features of HDFC Life Click 2 Protect Plus are as follows:
- To own this plan, you need to be between 18 and 65. In my opinion, you should invest in term insurance in your early twenties when you start earning.
- Accidental Death Benefit: This benefit adds an amount guaranteed to the lump sum payout granted upon death.
- Income Plus Option: This feature provides a death benefit of 100% of the amount promised and a monthly arrears payment of 100% of the money assured.
- Income Option: This option pays out 10% of the insured amount upon death, with the remainder paid out monthly for 15 years.
These are some of the best term insurance plans you can own for the coming year. All the young blood who will enter the status of working professionals should consider owning a term insurance plan.
It might look like a silly deal, but term insurance can be a genuine comforter when the financial crunch arrives.
Conclusion
Always consult a financial advisor if numbers confuse you. Before investing your money, have a clear idea about your expenses and affordability.
Term insurance is a wise investment. Period.
Own it before life hits you with some hard times.
