The benefits of term insurance plans are well-known, and over the years, their popularity has grown manifold. If you are also planning to take a best term insurance plan, you are likely to come across various types of plans. Different types of term plans cater to various needs. Here are the types of term insurance plans you should know about –
- Level Term Plans
This is a common and straightforward type of term plan. In this, the insured sum remains to fix across the tenure of the policy. The benefits of the insurance policy will be paid to the beneficiaries upon the death of the insured individual.
- Increasing Term Plans
In such term insurance plans, the insured individual has the option to raise the value of the sum assured on an annual basis while the policy is still active. Additionally, you maintain the same value of the premium amount. The premium of these term plans is higher in comparison to the other term plans.
- Decreasing Term Plans
Contrary to the increasing term plan, the insured sum continues to decrease on an annual basis in order to cater to reducing requirements of the insured. These term plans prove to be convenient in situations where the individual is dealing with a substantially big personal or home loan or paying regular EMIs.
- Convertible Term Plans
In this form of term insurance plans, you are provided with an option to convert your existing insurance plan into another form of insurance plan at a particular date in the future. For example, if you have purchased a term insurance plan for 15 years, but after five years, you want to switch to any other plan like a whole life insurance plan, endowment plan, etc., this plan allows you to do the same without any hassle.
- Return Of Premium Plans
One of the main reasons why people opt for term insurance with return of premium is that you are given all the premiums that you have paid throughout the term of the insurance policy upon the time of maturity. In the event of your untimely death, the nominee is paid the insured sum. But if you survive the tenure, the company will also give back the premium that you have paid all these years.
- Term Plans With Riders
In this type of term insurance plan, you get to choose rider options. These riders in insurance can be bought along with a normal term plan by paying an additional premium amount. Below are the rider options you get with this type of term plans:
- Accelerated Death Benefit Rider
- Accidental Death Benefit Rider
- Accidental Disability Benefit Rider
- Waiver of Premium Rider
- Critical Illness Benefit Rider
- Income Benefit Rider
Final Thoughts
Term insurance plans are a great way to invest your money and protect the future of your loved ones financially. Above are some of the prominent types of term insurance plans that you can get. When choosing an insurance company, make sure you do thorough research and select a company that is reputable and reliable.
