6 Investment Schemes that Work Best as Term Insurance Plans

Term plan plays an important role when you are thinking to have the financial security in future for yourself and your family. But what is term insurance? In simple words, a term insurance plan is a type of life insurance that offers protection for specific years.

In case the policyholder die during that period, the beneficiaries of the insured person, will get a death benefit from insurance company. But if the policy holder is alive after the term period then there are no benefits unless has got some return of premium option in their plan.

The Need for a Term Insurance Plan

Term insurance can be the simplest form of life cover you can choose. These plans work well with youngsters who wish to secure their families from financial distress in case of the unfortunate demise of the policyholder. In addition to the life cover, term insurance is equipped with a long list of rider options catering according to unique financial objectives and goals.

Types of Term Insurance Plans

In India, we see a wide array of term insurance plans focusing on different needs and financial objectives. We will be discussing some of the most effective ones that may roll out best as a financial strategy for you. 

1. Group Life Term Insurance 

Group term life insurance provides financial security for employees' families under a single policy, typically offered by employers as part of a benefits package. It ensures peace of mind for both parties.

1. Whole Life Term Insurance

Whole life term insurance covers you for up to 99 years, ensuring a payout almost guaranteed. For instance, if you choose Rs. 1 crore cover and pay premiums until 60, the beneficiaries will get the sum assured in case the policyholder passes away before 99. Surviving the term means receiving the payout yourself.

1. Increasing Term Insurance Plan

This plan increases the sum assured annually to keep up with inflation and growing financial needs. For example, a Rs. 1 crore cover could grow by 5% yearly, reaching Rs. 2 crores by the policy's end. It is ideal for those expecting higher future expenses.

1. Decreasing Term Insurance Plan

Designed for diminishing liabilities like home loans, this plan decreases the sum assured over time. It ensures your family can repay the loan in case of your death without over-insuring as the liability reduces.

1. Joint Life Term Insurance Plan

This plan covers both spouses under one policy. If one spouse passes away, the surviving partner remains covered without further premium payments. It's especially beneficial for couples, ensuring continued financial protection.

1. Convertible Term Insurance Plan

This plan can be converted into a whole life or savings plan later. For example, you could take term life insurance in your 20s and convert it into a whole life plan later on when required, thereby extending yourself with more facilities.

Benefits of Buying a Term Insurance Plan

Purchasing a term insurance plan provides numerous benefits beyond just life cover. Here is why it is a smart choice:

1. Financial Protection: Ensures that the family members are financially secure even if the policyholder is no longer there to support them.
2. Critical Illness Coverage: Offers additional payouts in case of life-threatening conditions like cancer or heart disease.
3. Affordable Premiums: Provides high coverage at a relatively low cost, especially if you start young.
4. Disability Support: Offers financial aid and premium waivers in the event of a severe disability.
5. Survival Benefits: Some plans return premiums or offer regular income if you survive the policy term.
6. Tax Benefits: Provides significant tax savings under sections 80C and 10(10D) of the Income Tax Act.

Secure Your Family's Future Today

For a comprehensive financial plan, buying term insurance is indispensable. No matter which route you take, these plans all come with a guarantee that your family will be taken care of in case of any unfortunate circumstances. 

Having the benefits of critical illness protection, disability support reliance, also tax savings, a term insurance policy gives you both financial satisfaction and security. Insurance providers like Canara HSBC Life Insurance make choosing term insurance options simple by offering impressive coverage options designed to protect your financial future. Finding the right plan now will keep family life and health secure for years to come.