A pure term policy is a conventional life insurance plan that offers financial coverage to the family of the insured in case of his/her death. These policies usually have a tenure that ranges between ten and fifty years.
Term policies have higher covers offered at comparatively lower premiums. Also, there are no maturity benefits in case the policyholder outlives the tenure of the policy. Insurance companies refer to a pure term insurance policy as a no-frills attached product because of its benefits and features.
Benefits and features of a pure term insurance plan
Given below are the most important benefits and features of a pure term policy:
Choice of Plans:
Insurance companies offer people a choice of different plan types. Based on individual requirements, a person can choose a joint or single pure term insurance policy by extending the cover for the dependants like the spouse.
High Coverage at Low Premiums:
Such term policies provide a high protection cover at the lowest insurance premium. It makes the term policies a cost-effective method to offer financial protection to the dependents of the insured in the event of his/her untimely demise. It’s better to opt for an insurance cover amount that is at least ten to fifteen times the yearly income of an individual.
In case of the insured’s death, a nominee tends to be eligible to get the cover amount selected at the time of a policy subscription as a death benefit. But the payments for the death benefit are also subject to the cause of death. Pure term policies don’t pay death benefits to the nominees in the event of death caused by narcotics, terror, an act of war, suicide, or an accident from extreme sports.
Flexibility in Payment Choices:
The term policies provide different premium payment options to meet the needs of the policyholders. These premiums can either be single, limited, or regular payment plans. The policyholders with regular or limited payment options are allowed to pay the term policy premiums on a monthly, quarterly, semi-annual, or annual basis.
Lucrative Tax Benefits:
The policyholders are allowed to avail of tax deductions on insurance premiums that are paid for purchasing pure term policies under Section 80C of the Income Tax Act, 1961.
Selecting the Right Pure Term Policy
There are several term insurance policies available in the market, and the benefits and features associated with each policy can be different. In order to get the maximum benefits of a term policy, you need to select the right plan.
Thus, make sure you check a couple of factors like the insurer’s credibility and claim settlement ratio before proceeding. Also, get quick quotes from a prospective insurer before you buy a plan.
That’s all you need to know about a pure term policy! It’s time now for you to decide whether you want to buy such a policy or not. Consider all the benefits and features before deciding.