Top Term Insurance Features That Benefit Nominees Financially

Written by : Knowledge Centre Team

2025-12-25

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10 minutes read

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Life is uncertain. There are too many risks, like disease, accidents, disabilities, and death, which can put a dent in the emotional and financial aspects of life. In a community, individual financial stability is not attained without savings. If an individual with a family loses financial stability, the whole family suffers. Hence, you need an efficient plan to keep your family financially protected.

Term plans are the purest form of life insurance plans that will keep your family safe. Like every investor, you need adequate knowledge about the plans to accurately choose a term plan. Hence, researching the plans should be mandatory. To help you choose the best term plan, here are some insights and features on term policy

Key Takeaways

Term insurance offers high life cover at low premiums and is simpler than most insurance products.
You can buy term plans online or offline and choose premium payment options based on your convenience.
Riders like accidental death, critical illness, and disability enhance your policy’s coverage.
Choose between lump-sum or staggered payouts to suit your family's future financial needs.
Increase or reduce the life cover over time based on evolving life responsibilities and financial goals.

What is a Term Insurance Policy?

A term insurance policy is a pure protection life insurance. If the policyholder/insured passes away during the policy's term, the nominees will receive a sizable payout from the term insurance policy. The financial benefit from the policy is the death benefit, which you can select when buying the policy as the sum assured. In the event of an unfortunate death, the term life insurance cover will provide a large sum of money to the beneficiaries so that they can:

Look after their regular monthly living expenses.
Pay off any financial liabilities, such as a car loan or housing loan.
Invest money towards achieving important life goals like children’s education and marriage, and a retirement fund for their spouse.

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Features of a Term Insurance Policy

Here are some features of a term plan that make it a desirable investment option.

Affordable: One of the key benefits of a term insurance plan is its affordability. It offers a high life cover at a low premium for a fixed term, making it a cost-effective way to secure your family’s future. In case of an untimely death during the policy term, the nominee receives the death benefit. It is affordable than whole life, money-back, or ULIP plans, and it also ensures that your loved ones are protected from debts, loans, and lifestyle disruptions.
Buying a term plan is the best step to financial security and safeguards your family from any debts, loans, and helps maintain the current standard of living.
Easy to Buy: You can buy a term plan easily, as you buy clothes or books from an online shopping site. Buying a term plan is also comparatively easier than buying other types of investment plans and financial arrangements. The framework of a term policy is simple enough that you don't have to worry about the returns and where the money is invested. To accurately use the plan, you have to appropriately calculate the affordable money as per your financial capabilities, livelihood, and financial problems like debts, loans, etc.
There are two ways to buy a term insurance plan,
1. Offline: Buying through a medium, like a broker, insurer, etc.
2. Online: Buying a term plan online is like online shopping for basic commodities. All you want is a digital screen and an internet connection. Online plans are cheaper than offline plans as there's no hassle involved with documentation. These offer quick processing. The insurance company also saves money as online plans are 5-6% cheaper than their offline counterparts.

Flexibility of Payment: You can choose when you pay the payment that is due. A term policy can be chosen as annual, semi-annual, quarterly, weekly, or monthly. There are also plans that offer either a single pay or a limited premium option apart from regular options. These are the reasons why the pay is flexible, as you would be able to choose payment as per your financial capabilities.
Additional Riders: Every term insurance plan offers additional riders in case of injury, accident, disease, or disability. These riders come with additional charges and offer extended periods in connection with the main plan. Hence, it is important to take these additional riders into account as per your financial capabilities. It ensures maximum coverage and the security of the family and loved ones.
Staggered Claims Payout Option: When you choose a term insurance plan, you usually get the option of a single large payout. But handling a big amount at once can be difficult for your family. To avoid this, some plans allow a staggered payout. This means a part of the claim is paid as a lump sum, and the rest is given in regular monthly or yearly amounts.
This option helps your family take care of urgent expenses while also receiving steady income for daily needs. You can select this payout style when you buy the plan. Some insurers even allow your nominee to switch to a full lump sum if needed. This flexibility ensures your loved ones continue living with comfort and dignity, even in your absence.
No Capital Build-up: Term life insurance doesn't accumulate wealth as a universal policy would. It goes directly to the compensation of life insurance if the unthinkable happens. If you stop making premium payments or if the policy matures (reaches its end of term), you will be left with zero capital. Premiums would be used purely for the death benefit.
Pay The Policy Premium Till Retirement: You can choose a term policy that requires you to get covered till age 85 but pay premiums only till age 60. In other words, you need not pay for the entire tenure of the policy, but pay only when you are working. Therefore, to get the benefit, you must choose a term policy with a premium payment option that falls within your retirement age and follows your retirement plan.
The benefit of a plan is that you will not have to worry about the premium payment after retirement, when the regular income stops. Even after you retire, the term policy will protect your family members' financial situation. Hence, this is a useful feature to ensure your family's future. However, make sure to ask your insurer about its details.

Fixed Coverage Amount: Term life insurance can be purchased with varying amounts, ranging from thousands to lakhs. The amount of coverage desired affects the size of the annual premium, as companies could easily charge policyholders ₹1000 per coverage.
But with a term policy, when a coverage amount is set, it cannot be increased or decreased. But it is not a problem if you can accurately estimate the amount as per the term policy and use it for your benefit. Therefore, you should research and ask for advice from your insurer.

Increasing Premiums: Many term plan premiums increase each year. Also, all insurance has the problem of rising mortality charges. Hence, a permanent term policy averages out later premiums with former ones, which will allow funders to pay annually with the policy of their choosing. As such, make sure to have a discussion with your insurer and take care to know all about your premium charges and benefits.
Non-Working Spouse Coverage: The best term plan would have a feature that would allow you to add your spouse as the beneficiary in your plan. Make sure to choose this plan as it will allow the benefits of the plan to reach your family and safeguard them against any financial troubles in the event of an unfortunate event. Hence, make sure to have a discussion with your insurer. Get advice from your family members, as the financial situation concerns them too.
Increasing/Decreasing Life Cover: Term policy by Canara HSBC Life Insurance will allow you to increase or decrease your life cover at different stages of life. It also gives you the flexibility to change and adapt your policy as per your financial situation and livelihood. When you choose a term insurance plan, make sure to take your responsibilities into consideration.
Temporary Coverage: Term policy coverage is basically for short periods of time. It can cover up to thirty years. Therefore, as stated previously, make sure to discuss with your insurer and take care to know about the features a specific policy has.

Final Thoughts

These features are generalised for a variety of term policies and are the basic ones any term policy should have. Many insurance companies have additional benefits along with these. So, make sure to research properly and take care of the details with your insurer. iSelect Smart360 Plan by Canara HSBC Life Insurance is designed to keep you and your family protected when you are no longer around to provide for them. Choose wisely, live well.

Disclaimer - This article is issued in the general public interest and meant for general information purposes only. The views expressed in this blog are solely those of the writer and do not necessarily reflect the official policy or position of Canara HSBC Life Insurance Company Limited or any affiliated entity. We make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability, or availability with respect to the blog or the information, products, services, or related graphics contained in the blog for any purpose. Any reliance you place on such information is therefore strictly at your own risk. You should consult with a qualified professional regarding your specific circumstances before taking any action based on the content provided herein.