Term Insurance India – Types of Plans
Term insurance plan is a policy that will charge only for the cost of insurance that you need to secure your family. However, still under the same there are many alternatives accessible that you can find as per your needs.
Pure term plan
It is the easiest and the cheapest form of term insurance plan. In this, the insurance company will pay a fixed sum assured amount to the heir or applicant in case of the death of the policyholder. Although in such cases where the insured survives, he/she will not be getting anything in return. Usually, the premium for term plans depends upon three things that include age, the term of the policy and the sum assured you choose. The term plans are the cheapest insurance product, still, you can get a discount if you buy them online.
Return of premium plan
Not everyone would indeed be fine with the concept of paying for years and will get nothing in the end. The return of the premium plan is for those people. Investing in this plan would be a little expensive as compared and under the same, you will surely get a return of premium. Under this plan, the insured will surely get a return at the end of the policy, but in case he dies during the policy term then the nominee would be receiving the sum assured amount.
Under the decreasing form of term insurance plan, the sum assured decreases every year just like the pending loan amount. You can buy this plan at very few charges as the sum assured will decrease every year. Banks usually collect the single premium type of this plan and pay the premium on behalf of you. Also, the amount of premium gets included in your total debt liability, which you pay with the help of an increased EMI.
Just the opposite of a decreasing plan. Under this, the amount of cover will increase by about 5% every year until your sum assured increases by 50% or doubles up in value. The premiums of these plans are on the higher side as the insurance company risks large amounts every year.
It is a combination of a saving plan and a term plan. It is a plan, where you buy a term plan, which you can convert into an investment-cum-insurance plan later. However, your premium may change at the time of conversion.