Quick guide on buying term plans

Today, the insurance market offers various types of insurance products and while you are completely aware of the importance of having one for yourself, it becomes difficult how to choose the best one. In this article, we will talk about term insurance plan, which gives you a number of benefits.

What is term plan?

A term plan is a type of insurance plan, which offers you coverage against the risk of losing life. As the term suggests, the policy is valid only for a particular term. After this period, it is up to the person to renew it or not.

How is it different from life insurance plans?

A term insurance plan is different from a normal life insurance plan in several ways. For example, it gets you a relatively large amount of coverage as compared to a general life insurance plan. The premium amount is less than half, in several cases. It is suitable for those who wish to have a large cover by paying a smaller amount of premium.

What is the downside?

A term insurance plan is not an investment plan. The premium paid towards a term plan should rather be treated as expenditure. Unlike life insurance plans, you do not get any return on investment in insurance. This aspect is not exactly a downside because it is the way you look at it. The amount of coverage is huge and that is why, the amount paid towards premium is negligible.

How to buy the best term insurance plan in India

Before arriving at any decision of buying a term plan, you can visit web portals who offer free services of providing the term life insurance comparison. It is advisable to conduct some research on different term plans available in the market and then shortlist a few products.

After this stage of research and short listing, you can buy a term plan either through online mode or agent.

It is observed that if you buy it online, you may get a larger coverage in the same amount of premium. Why? Because an insurance company does not incur any major expenditure on the transaction and this cost benefit is passed on to a buyer. Also, the insurance company saves on agent commission.

However, it is always good to compare the quotes given by online modes and agents, and then only reach a conclusion.