What is Term Insurance

Term insurance is a type of life insurance policy that provides financial coverage for a specific period of time. During the policy tenure, even if the life assured dies due to any unfortunate event, the beneficiary will be provided financial protection under this policy. For a specific ‘term’ or period of the year, the term insurance plan offers life insurance cover against the fixed premium that has been paid by the insured.

Among all the life insurance policies, a term insurance plan provides the highest life coverage for the minimum paid premiums during the period of the policy. For example, Premium for Rs. 1 Crore Term Insurance cover can be availed as low as Rs. 411 per month. Even some insurance companies offer that the fixed premiums can be paid at once or at regular intervals for the entire policy term or for a limited period. Premium amount varies on the basis of the type of premium payment method opted by the buyer.

It has to be remembered that if the life insured survives the entire policy period, the coverage at the earlier rate of premiums is not guaranteed after the term insurance policy expires. The insurer has to either go for the extended coverage with the different payment conditions as per the availability with the insurer or forgo the coverage entirely.