Term insurance is a protective financial cover that is valid for a specific term. It has been gaining ground as it is quite affordable. One of the most important factors while choosing a term insurance plan is – premium paying options that are available. This article will help you delve deeper to understand the different premium payment options so that you make an informed decision.
Deep down we all are aware of the unpredictability of life. None of us likes to think about a time after we are gone. But a life insurance could offer financial stability and reassurance to your loved ones. Your financial obligations may become a huge burden on your loved ones without a protective financial cover. Even if you have been extremely careful with your finances, and you have no outstanding debts, a life insurance helps your dependents.
If you are still considering your option to decide whether or not you need life insurance – then gauge your financial commitments and how they will affect your loved ones if you were no longer around. You may have recently taken out a home loan, which means that you have a long financial commitment. If you have children, you may have preferred to send them off to good educational institutions. If you realise that you have little to no coverage for your loved ones in case of your death, you shouldn’t take a backseat to get a life insurance. The importance of term insurance cannot ever be underestimated. So, what exactly is a term insurance?
What is a Term Insurance?
Term insurance is a life cover which has been designed to safeguard the financial requirements of your family in case of a serious illness or death of the insured. The policyholder agrees to pay premium charges to the insurance service provider. The term for the insurance may start from 10 years and go up to 30 years or more – that depends on your age at which you take the policy. It is up to you to choose what term you want the insurance for.
Let us take a simple example to help you gain a clear understanding. You choose to take a 30-year term. Should you die within 30 years of the insurance, your beneficiaries will receive the death benefits from your insurer.
Now that we have understood what and how this cover will work, let us move forward and discuss about the different premium payment options of a term plan.
Premium Payment Options of a Term Plan
Different insurance policies have different payment options. iSelect+ Term Plan offer premium payment options as short as 5 years or 10 years. Also, you have the option to pay during your working years, i.e.,
till you get 60 years old. There are multiple premium payment options which includes single shot payment for the entire term or for a limited period of 5/10/15/20/25 years.
Listed below are 3 term plan premium payment options:
a) Regular Payment Option
This is the most opted way for making payment towards your premium. The reason why it chosen by people is because it offers monthly, quarterly, half yearly and yearly options to pay for the premium. In simpler words, it can be said that regular payment option allows periodic payments. There is an array of financial commitments in a person’s life. Paying for a term insurance may disturb the financial equilibrium by impacting your monthly budget, especially if you are a salaried person.
However, you need to be cautious regarding the payment of the premiums. As the cost of payment is spread over a long duration, there are chances of non-repayment. And this will lead to lapse of the policy.
b) Limited Payment Option
'One-size-fits-all' – gone are those days. Solutions are being tailor-made and curated according to the demands of the changing population. Today, customers are looking for goods and services that are personalised to their needs.
Limited payment option allows the insured to choose a specific period, let say, 5 years, 10 years or more for paying their premiums. As it has a shorter liability duration, the lapse of policy is less likely to happen.
c) Single Premium Payment Option
Don’t want to go for a long-term financial commitment? You have an option to choose single premium term insurance. It is a one-time payment solution option for all those people who do not want any financial hassles of recurrent payments. Make the payment in a single shot and become the proud policyholder. This is possible only when you have huge amount of money lying idle, which can be put to good use. Also, as you will be paying the premium upfront, there is no chance of your policy to lapse in case of non-repayments.
Which is the Best Term Insurance Plan in 2020?
iSelect+ Term Plan offered by Canara HSBC Oriental Bank of Commerce is one of the best term insurance plans. With this, you have the flexibility to increase life cover aligned with changing life stages. Apart from affordable, it allows you to add your spouse in the same policy along with a discount on the rates for the spouse. Also, if you are an existing customer of the company, you are entitled to receive loyalty discount.
You can customise the plan according to your requirements and take benefit of the multiple payment options that are available. Aging is inevitable and if you are considering your investment, then take into account the financial security of your next generation. iSelect+ Term Plan helps you put all these worries to rest and focus on enjoying the future.
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