If you are considering taking the best term insurance plan, you should invest some time in research. Term insurance plans are designed to offer financial security to the insured for a specific period. When you choose the best term insurance plan, you can avail yourself of a wide range of benefits. To make a well-informed decision, you must know the types of term insurance plans available. This article mentions the types of term insurance policies to help you make a better decision.
Level Term Insurance
Level-term insurance is one of the most common plans provided by all life insurance providers. In this type of insurance, your premium and the sum assured remain fixed throughout the tenure. This plan is recommended at a younger age, as you will get cheaper premiums.Increasing Term Insurance
In increasing term insurance, the death benefits continue to increase yearly until the policy's term. While the benefits increase, the policy premium remains the same. Mostly, the plans have a predetermined limit to which the benefit increases. Even after the benefit reaches its maximum limit, the policy will still be effective. The cost of increasing term insurance is typically higher than other-level term plans.Decreasing Term Insurance
In decreasing term insurance, payment decreases yearly until the plan pays out or the coverage period is over. The premium throughout the plan remains the same. This type of policy is generally taken out against a particular debt, which is reduced over time. By the time the policy period ends, the sum assured often comes to nil. The premium for decreasing term insurance is lower than that for other-level term insurance.Term Insurance with Return of Premium
Return of premium term insurance allows you to return all the premiums you paid during the policy tenure. However, you will only get the premium if you survive until the end of the policy. For instance, you have taken a return of premium plan for 30 lakhs for 20 years with 3000 as premium, and you pass away within this period. In such a case, your beneficiary will only receive the 30 Lakh. However, you will also receive the premium if you survive this period.Once you have assessed all the term insurance plans available and decided which one suits you the best, filter out the providers in the market. Make sure you thoroughly go through the plan each of the providers offers. Consider the features, costs, benefits, and all the other factors to decide the best term insurance plan. Pay special attention to the terms and conditions section to ensure that you get all the details that might affect you in the future. Spending little time in the early stages will help you obtain the best outcomes from your best-term insurance plan.
