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No one can predict what the future holds for them. As life is unpredictable, it is essential to have the right insurance policy that can protect your family’s financial future. Investing in an appropriate plan should be your priority.
You can find various types of insurance plans. However, it is vital to select the one that meets your budget and requirements. A term plan is one of the most popular forms of life insurance plans. Nowadays, many insurers are offering customized plans as per the requirements of potential customers. Due to this, there are numerous types of term plans available in the market, which can lead to a lot of confusion.
While purchasing a term insurance policy, it is essential to look for the features offered, premium, benefits, and terms and conditions. Before comparing the differences between a traditional term plan and a smart term, plan to understand a bit more about term insurance.
Term insurance plan
A term insurance policy is a type of insurance plan that provides life cover to the policyholder for a specific period. It offers a high sum assured at a pocket-friendly premium. In the case of the policyholder’s unfortunate demise, the beneficiary or nominee of the policy receives the death benefit from the insurer. Term insurance plans are not whole life insurance plans that provide coverage throughout the policyholder’s lifespan. The maximum tenure of a term policy is 85 years. Term insurance policies do not offer any maturity or survival benefits if you outlive the policy’s tenure. If you are looking for a term plan with survival benefits, you can opt for a Term Insurance with Return of Premium (TROP) plan. Such a policy provides returns on premium if you survive the plan’s tenure.
Smart term plan
Smart term plans are customized plans that offer the sum assured and a complete cover during the premature death of the policyholder.
Which term plan is ideal for you?
We have listed out a few factors, which will help you decide which policy is more suitable.
- Return of premium benefit: One of the significant advantages of investing in a smart term plan is that you can get back the sum of the total premium paid if you survive the policy’s tenure.
- Easy premium payment plan: Insurance is a type of investment. Therefore, it is essential to gauge your budget and inflow of funds before investing. Smart term policy offers easy premium payment options. You can choose the frequency of your premium payment, allowing you to manage your other expenses efficiently.
- Benefits on critical illness and accidents: A term insurance plan provides riders like accidental death rider, critical illness rider, terminal illness rider, waiver of premium, and income benefit rider, among others. For instance, if you are diagnosed with any critical illness, the insurer pays you a lump sum that can help you to cover the hospitalization or medical cost. Similarly, the smart term policy also offers complete protection against death, disability, and critical illness.
- Life stage benefits: While selecting a term insurance plan, opt for one that provides the flexibility of increasing the sum assured. With growing age or with an increase in responsibilities, your financial aspirations may change. If your term policy is flexible, you can increase the policy’s sum assured as per your changing economic aspiration. Therefore, it prevents you from the hassles of purchasing a new policy.
Online term insurance has a cost-effective premium when compared to offline methods. Therefore, compare the premium, feature, and terms of the policy and pick an ideal plan to meet your needs and requirements.
