Term insurance is a life insurance product that provides financial protection to your family in case of an untimely death. It is an affordable way to secure your family’s future financial needs. In a term plan, you pay a fixed premium for a specific period, and in case of your unfortunate demise during the policy term, your nominee receives the sum assured. Here are some of the key features of term insurance:
| Features of Term Insurance | Description |
|---|---|
| Affordability | Term insurance policies are affordable, with premiums much lower than other life insurance policies. |
| Age of Entry | You can get term plans early in life, with the minimum eligibility age of 18 years. |
| Policy Term | Term insurance provides coverage for a specified number of years, known as the policy term. |
| Maturity Benefit | Term insurance does not offer any return on the premium you pay in the fortunate event that you survive the policy tenure. |
| Flexibility in Premium Payments | You can pay your term plan premiums as per your convenience, with regular or one-time, lump sum premium payments. |
| Life Cover | Term plans provide life cover of your choice at affordable premiums, with the payout helping your family avoid compromising with the lifestyle you want for them in your absence. |
| Additional Add-ons | You can add riders or add-on benefits to your term insurance policy to extend the scope of your base coverage at a nominal cost. |
Calculating your Human Life Value (HLV) can help you determine how much life insurance cover you need. HLV is an easy-to-use numeric method of calculating the amount of Life Cover^ that you may need. The basic thumb rule that can be used to find out your HLV is as follows:
HLV = Annual Income x Number of Working Years Left
For example, if a 32-year-old man has an annual income of 5 lakh, the ideal Life Cover^ for him would be 25 x 5 lakh = 1.25 crore.
Use our free online calculator to help you determine how much life insurance cover you need to keep you and your family secure.
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Article Sources
- JSTOR. What Is Term Insurance? How Does It Work, And What Are ...
- JSTOR. Term Life Insurance: What It Is, Different Types, Pros And ...
- The Economic Times. Types Of Life Insurance Policies
- The Economic Times. What Is Term Insurance
- Business Perspectives. What Is Term Life Insurance?