The uncertainty of the future is an anxiety most working individuals work with. In a post-pandemic world, these anxieties have manifested into grave concerns, as the economies and lifestyles of many people have been effected in unprecedented ways. The way to secure one’s future can be undertaken through insurance and investments made to financially support people in unforeseen situations. A term plan is one of the most common and accessible insurance plans that can be used by a policyholder to secure their own future along with their dependents.

A term plan is made to cover the needs of the insured and their dependents through an assured benefit sum in the event of the policyholder's demise. The best term insurance plan in India is one that successfully combines an affordable means of securing one's future where premiums are low and where one can customise their coverage and payout methods as per their convenience.

A term plan is an asset as well, which can help one to secure or pay off loans in the long run, even in the absence of the primary income earner. It is a resource to be used at times when unavoidable financial expenses have to be met by the surviving beneficiaries in the absence of the policyholder.

Now that the basics of a term plan have been established let us take a closer look at the features one can expect from the best term insurance plan in India which can make it a vital financial cushion in difficult times:

1. Premiums: A feature that is recurrent in most life insurance and term plans in India, it is the nominal payment that is paid to the insurance provider by the policyholder on a regular basis throughout the policy tenure. This payment maintains the coverage provided by the insurance provider and adds to the payout that is assured to the beneficiary at the end of the policy term.

2. Policy Tenure: it is the tenure of coverage determined and decided upon by the policyholder after consultation with the insurance provider. The policy tenure for a term plan is usually longer than most standard insurance plans. The duration for the best term insurance plan in India may range somewhere between 25-30 years. The plan reaches maturity once the tenure is completed.

3. Death Benefit Sum Assured: It is the promised payout amount promised to the beneficiary of the policy in the event of the insured person’s passing. This amount is usually a financial resource for the beneficiary to maintain their financial obligations after a disturbance in the income patterns.

4. Policyholder: The person who signs the insurance documents and maintains the recurrent premium payments and any additional policy costs is the policyholder.

5. Insured: The individual whose life is insured under the term plan is called the insured. It is in the event of this person that the insurance provider is liable to process the assured payout amount to their dependent beneficiaries.

6. Beneficiary/Nominee: The individual who is designated as the person to receive the assured sum payout in the event of the insured person’s passing is called the beneficiary or nominee. These are usually spouses, children or other family members who may be financially dependent on the insured.

Now that you know about nominee meaning, it is the stipulated individual in the policy document to whom the assured sum benefits will be passed on at the event the insured individual passes away. This person can avail the death benefit payout in the dictated payment type which may be a one-time lump sum handover or a staggered income-oriented payout.

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7. Riders: A term plan with its variations and abundance of options can be an ideal choice for people who wish to have robust financial visibility for all unforeseen situations that may arise in their life. Therefore, term insurance plans offer additional riders and benefits that can help policyholders prepare for situations that are not limited to death.

One can add riders for Income, Waived Premiums, Disability, Accidental Death or even Critical Illness in their existing term insurance plan. The cost of these riders added to the basal premium cost, hence one should choose after adequate deliberation.

8. Tax Benefits: The premiums paid for a term plan and the payout sum thus received from the same at the time of maturity is exempted from taxation under Section 80C and 10(10D) of the Income Tax Act, 1961.

A term plan is therefore an ideal choice of insurance and investment where the taxpayer can avail a tax deduction of up to Rs. 1, 50,000 from their net taxable income on account of the investment premiums they may have paid.

The best term insurance plan in India can be expected to have all the features with the supplementary benefit of having existing coverage. In order to know more about the features of a term plan, you can reach out to insurance providers such as Max Life Insurance who can guide you through the process of term plan comparison and create insurance solutions tailor-made for your needs.

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