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    Kotak e-Term Plan is a pure term plan that provides a high level of protection to your loved ones in your absence.

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What is Term Insurance?

What is Term Insurance?

Initially, insurance companies offer regular life policies like endowment and money back plans. However, with the opening of the sector to private players resulting in several international companies entering the county, insurers now offer different kinds of life covers.

In addition, to the regular plans, you may choose options like term plans and unit-linked insurance plans. These types of new-age plans provide several beneficial features and unique benefits not available with traditional life insurance policies.

Do you know term insurance meaning? If not then continue reading the article.

Term insurance meaning

These are pure protection and the most basic type of insurance plans. You are able to avail of higher life coverage at an affordable premium. This enables you to protect your family financially in case of an untoward incident during the policy term. In case of an unfortunate event, your beneficiaries receive the benefits as per the policy document. Based on the type of term plan you choose, you may pay a single premium or a certain amount at periodic intervals.

It is important to not only understand what is term plan but you must also consider some factors before you make your decision. You need to consider factors such as inflation, current lifestyle of your family members, and your outstanding liabilities, to determine the amount of coverage you require to ensure the financial security of your beneficiaries in case of your absence.

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Why choose term insurance?

To answer the question “what is term insurance” in simple words, it is a pure life cover. These plans do not include any profits or savings component. It is a basic plan that makes life coverage more affordable when compared to traditional insurance policies. Here are three features that make term plans a good choice.

  • Higher coverage

Because the premium on a term plan is lower when compared to traditional policies, you are able to afford a higher coverage for the same premium amount. For example, if you are in your 30s, a term plan with policy duration of 30 years for a cover of INR 1 crore is easily affordable. However, the premium on a traditional plan for INR 1 crore would be very high and probably beyond your financial capabilities.

  • Additional riders

You may include additional riders to procure comprehensive life coverage. You may opt for a critical illness rider that pays a certain amount in case you are diagnosed with the covered diseases. This benefit is over and above the regular benefits payable to your beneficiaries in case of an untoward circumstance, during the policy term. Some of the other riders include the waiver of premium, disability coverage, and loss of employment. You must choose the riders as per your requirements because such benefits are available at an additional premium. It is recommended that you understand more about such riders while you understand term insurance meaning.

  • Unique features

Insurance companies are innovative and provide some very unique features with the term plans. An example is that insurers often offer a discount on the premium amount if you are a non-tobacco user. Moreover, you may not have to undergo a medical test when you choose to buy a term plan. Knowing what is term insurance and buying a policy was never easier than today. This is because most insurance companies offer detailed information on their websites and also allow you to buy the plan online.

Insurance is an important aspect of financial planning. It is an excellent way to financially protect your family against unfortunate events. Term plans are pure insurance policies that are affordable and simple. In case of an unforeseen incident during the policy term, the benefits are paid to your beneficiaries. In case of your survival, there are no maturity benefits.

Now that you understand what is term plan, buy one today and protect your loved ones in your absence.

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