Types Of Term Insurance Plans And How To Choose Term Insurance Plans?

Man writing at desk - insurance policy numbers article

In daily life’s daily hustle and bustle, a term insurance plan is a must-have for all individuals. The insurance plan refers to a particular amount of coverage received for a set period of years or a term. This insurance plan provides benefits to the nominees in times of financial burdens that are readily assisted by the policy team. 

The insurance plan is capable of covering all types of unforeseen circumstances that put financial pressure on the nominees, with a range that goes as high as Rs. 1 Crore to as low as Rs. 485 per month. Individuals can pay these fixed-term amounts at regular intervals for the whole policy term or a limited period. 

Types Of Term Insurance Plans

Considering the changing times and the varying needs, a term insurance plan is not enough to aid everyone successfully. Therefore, different types of term insurance plans need to be taken into account when planning your finances.

Level Term Plans

The simplest term policy is the level term plan. Here, the assured sum at the commencement of the policy remains equal throughout the term. In case of deaths of the policyholder, a death benefit is also paid to the nominees.

Return of Premium Term Insurance 

A term insurance plan with a return of premium refers to a plan that offers back all the premiums paid by the insurer if they outlive the term. Individuals may use this option only when they haven’t claimed anything during the policy term.

Convertible Term Plans 

A convertible term plan is the most flexible, as it supports the conversion of a term plan to any other as the years progress. If you want your term plan to easily fit your financial priorities, you can opt for this term plan.

Decreasing Term Insurance

In a decreasing term plan, the assured sum decreases in value with the increase in the policyholder’s age. This is done while considering that, with the progress in age, the liabilities of the individual may face a decline, and hence, the need for a higher sum may decrease as well. 

Increasing Term Insurance

In the case of increasing term plans, the policyholder has the option to increase the assured amount at specified milestones throughout the term. The increased rate of the sum is predetermined and helps in keeping up with the increasing expenses of the family to curb inflation. 

How to Select the Best Term Insurance?

The first step is considering your lifestyle when buying insurance based on your daily needs. In case you are the primary bread earner of the family, you need to invest in something that gives you returns that are sufficient to sustain your future. 

On the other hand, if you’re a bachelor and want to live your life focusing mostly on yourself, you should choose a suitable plan. 

Since all of us have different financial duties with different portions of income, you must evaluate the limitations of your income so you can invest better without the insurance policy making your compromise on the standard of living. You can check your valuation and assurance amounts through the term life insurance calculator.

The Bottom Line

There are various types of term insurance you can choose from, and with the help of a term life insurance calculator, you can settle on the plan suited for you by comparison. Opt for PNB MetLife’s term insurance plan because it is considered one of the trusted financial companies in India.