Term Insurance Plan: Maximum benefit at minimum cost

The unpredictability of events in life and the uncertainty of life itself lend significance to life insurance.  Life insurance protects the near and near ones from the unexpected vagaries of life such as road, rail or air accidents, critical illnesses such as cancer, stroke, heart attack, paralysis, etc. and from the eventuality of death itself. Insurance helps the members of the family of the insured to protect themselves from financial disaster and sustain themselves financially during difficult times.

There are many types of policies that are designed to provide cover for the life of the insured, but term insurance plan is the best option as this policy provides maximum life cover at minimal cost. This is because a term insurance plan is a pure life insurance policy as, unlike endowment and such other policies, there are no maturity benefits payable to the insured at the end of the policy tenure.

The term insurance plan is the most economical and cost-effective life insurance plan money can buy. So, for example, if a 30-year-old non-smoker male buys a term insurance plan of Rs 1 crore for a tenure of 30 years, the premium payable would range from a minimum of Rs 650 to a maximum of Rs 950 per month, depending upon the benefits offered by the insurer along with the plan. Such a huge cover at such a low premium makes term insurance a must for every family.

Term insurance plans also come in various types such as term return of premium (TROP) plan, increasing cover plan, life stage event insurance plan and joint life term plan. Term plans are also available with riders such as accidental death cover, permanent and total physical disability cover, critical illness cover and waiver of premium. The premiums paid for the policy can be claimed for deduction under 80C of the Income Tax Act, and the pay-outs to the heirs of the insured qualify for deduction under Section 10(10D) of the Act.