Life insurance plans are plans designed to protect the family in case of the policy holder’s demise. Although there is no perfect science enabling insurance firms to set a value for individuals, set parameters help the smooth functioning of firms, as well as benefit policy holders.
What is a term insurance?
Certain life insurance products are becoming increasingly popular namely, term insurance plans, also known as protection plans.
Basically a safeguard to protect the family in case of demise of the bread earner, protection plans are very important.
Why should one have a term insurance?
As compared to other life insurance products, term plan insurance has its own set of advantages.
Ease of Use
- Uncomplicated is one word that aptly describes protection plans. It is very simple, and does not have troublesome guidelines to be followed.
- A set number of years can be decided for the coverage term.
A Plan for the Family
- Acting as an immediate pillow, it cushions the family members in case of untimely deaths.
- Think of it also as umbrella coverage. Each policy holder can pool in resources, but the assured amount is greater than the individual holdings, which proves to be beneficial to the family.
- Following the death of a sole earner, the family members would require some time to get back on their feet. This product provides them with a certain degree of financial independence.
- For families who have taken loans with long tenures, this plan might come in handy. Following the procurement of a loan, one must acquire a protection plan of corresponding value. This ensures that in case of ill timed demises, the family does not lose any assets, and is able to repay the loan amount.
Financial Benefits
- With a comparatively low premium, it is cost effective and therefore, an attractive financial tool.
- Fixed payments are another characteristic, which ensure that there is no increase or rise during the course of the term.
- Protection plans can be customized with add-ons like Accidental Death, to enhance the insurance.
One essential concept to understand is HLV, or Human Life Value. Although any amount cannot prove as a sufficient tag on the individual lost by the family, HLV helps calculate and prepare the amount that would be sufficient to soften the blow and help keep the family afloat momentarily.
Before acquiring any financial tool, or product, one must always carefully consider all options, compare the options, talk to a trusted advisor and thoroughly check if all your requirements are met. The best term policy is one which meets all your essential needs, and covers concerned areas.
Know more about online term insurance plans at 5 Paisa Insurance.
