How is Term Insurance Plan Different from Other Types of Life Insurance Plans?

To better match the insurance needs of the customers, insurers now offer many different types of life insurance products. One such popular option is term insurance.But just like other types of life insurance products, term plans come with unique features and benefits. If you are planning to purchase a term plan, check out how they vary from other types of life insurance plans-

Unlike most other life insurance products, term plans are pure risk protection plans with no maturity or savings component. In other words, these plans have a fixed sum assured, which is only paid to the policy beneficiary in case of the policyholder’s death within the policy tenure.If the policyholder survives the tenure, the insurer will not be liable for any payment. However, some insurers offer plans like TROP (Term Plan with Return of Premium). In these plans, the policyholder receives the entire paid premiums back from the insurer on surviving the policy tenure.

The lack of maturity benefits in term plans is well compensated through affordable premiums. As compared to all the other types of life insurance products , term plans have lower premiums.This makes them an excellent choice for any individual who is just starting his/her professional life and cannot afford the expensive premiums of other life insurance plans.

A term insurance plan is more focussed than other life insurance products. While other life insurance products focus on death and maturity benefits as well, a term plan only focusses on death benefit making it the ideal choice for someone who already has a retirement plan in place and looking for just a specified benefit from an insurance product.

If you are planning to purchase a life insurance policy, it is necessary to thoroughly understand how the different types of insurance products vary from one another.Now that you know what differentiates a term plan from other life insurance plans, it will be easier for you to decide whether or not it is the right option for you. You can always get in touch with a reputed insurer to know more about all the different insurance products. They can also offer assistance to help you select one that best meets your insurance needs.

The information contained herein is generic in nature and is meant for educational purposes only. Nothing here is to be construed as an investment or financial or taxation advice nor to be considered as an invitation or solicitation or advertisement for any financial product. Readers are advised to exercise discretion and should seek independent professional advice prior to making any investment decision in relation to any financial product. Aditya Birla Capital Group is not liable for any decision arising out of the use of this information.