Introduction

"You don't buy life insurance because you are going to die, but because those you love are going to live." ~ Anonymous

Life and time have a similar trait: both of them don't wait for anyone. You can be thrashed with medical and financial uncertainties, see beautiful additions to the family, or witness the untimely death of your loved one. Life is eventful, and it shall move ahead as it should. 

As life doesn't stop for anyone, be strong enough in terms of finances so that your family can sail through the rough currents without begging for money from relatives or getting crushed under debts. 

Life insurance is an important asset that one could invest in; don't consider it an add-on. It is a mandate. 

This blog will guide you about,

• What is term insurance and its importance?
• What are the types of term insurances?
• Why does one need to invest in term insurance?
• What is the best term insurance plan to buy in India for 2022?

What is Term Insurance?

There are multiple types of life insurance available in the market, and term insurance is one amongst the cluster. It is considered one of India's most bought and the best type of life insurance as it gives perks for every kind of audience, covering almost every possible benefit. 

But, what is term insurance?

Term insurance is a life insurance policy acquired for a certain period, as the name suggests. Here, the policyholder is expected to pay premiums promptly. If the insured meets with an untimely death when the policy term is active then, the nominee(s)/legal heir receives the death benefit in a lump sum or as per the selected plan offered by the insurance company. 

There are insurance companies that offer the insured a return of premium benefits. It means, if the policyholder survives the insurance period with no claims, the premiums will be refunded to the policyholder by the insurance company.

Don't bother about the coverage because term insurance plans often provide higher sums assured and can range up to Rs.1 crore at lower premiums.

Term insurance plans offer substantial coverage at affordable prices. Thus, regardless of your financial situation, term insurance can cover your loved one's financial needs in the case of health emergencies or even in your absence. It will help them to have a decent sail for a certain period.

What are the Different Types of Term Insurances in India?

Life insurance is a broad umbrella that holds different types of insurance catering to different needs. Similarly, there are different types of term insurance plans based on your needs and capacity to pay premiums. They are as follows:

• Increasing Term Plan: In this case, the sum insured grows with your age but the premium remains constant. Here, the death benefit grows progressively throughout the policy period  but the premiums do not. 
• Decreasing Term Plan: The premiums under this plan stay constant, but the total insured payable falls year after year over time. This type of term insurance plan can be used to protect against a specific debt that shrinks over time. These plans often have cheaper premiums.
• Term Insurance with Return of Premium (TROP): In term insurance with return of premium (TROP), the policyholder receives a refund of all premiums paid during the policy term during the maturity phase. However, if the policyholder dies, the term insurance with a return premium pays the sum promised to the beneficiaries. However, if the insured survives through the insurance period, they will refund all premiums paid throughout the policy period.
• Convertible Term Plans: This type of term insurance plan allows the insured to change the plan at any time to other plans. Some term insurance policies include conversion as a standard feature, while others provide it as an add-on. It is only feasible if the policyholder makes an official request to the insurer, whether it is built-in or add-on. The plan is not automatically converted. 
• Term Plan with Riders: As the name implies, this type of term insurance plan includes rider benefits. The benefits it holds are - severe sickness coverage, accidental death coverage, and disability coverage. You may get all of these functions in a single insurance policy by paying an extra premium. Who won't like some additional perks when it is a beneficial deal?
• Level Term Plans: It is the most prevalent form of term plan in which the premium amount and life cover stay constant during the policy's duration. And, the insurance company shall make the payment to the nominee(s)/legal heir after the insured's death.

How Does Term Insurance Work?

After understanding term insurance and its types, let us know how it works. 

Like life insurance, the policyholder is expected to pay premiums depending on the type of term plan picked by them. Here, the premium for term insurance is primarily determined by age, health problems, the period of the policy, and the coverage amount, and it varies according to the type of product. 

Depending on the policy conditions, the premium might be paid in one lump sum or periodic intervals. If the policyholder dies within the active term period, the nominee(s) will receive the sum assured. 

If the policy bearer survives the policy period, the coverage ceases, and the insurance company makes no cash payments. However, certain insurance companies might provide a 'return of premium' feature, which gives the insured the leverage to enjoy a specific lump sum at maturity.

Benefits of Term Insurance

It is believed that owning and investing in correct term insurance is wise, but how?

Following are the benefits and reasons to invest in term insurance,

Let your family have a smooth monetary sail: Let us suppose that you are the sole bread-earner and meet with death in an unfortunate event. Here, term insurance plays a vital role because a wise purchase of the proper term plan will cover your family's monthly financial needs and requirements even in your absence.

It's more than death benefit: Term insurance plans typically have coverage periods of 30 or 35 years, ensuring that you are covered for an extended period. Some plans are also renewable indefinitely, or until the policyholder reaches the age of 99. It gives you a significant cover for a more prolonged phase, and with riders on, you get additional benefits to act as a shield for different needs.

Pillar to the over-weighing financial burden: Not everyone has enough funds to fulfill all their dreams at a young age, and this is where we take a loan to float through our dreams. One can buy an education loan, home loan, a personal loan, etc. the payback of these loans might be financially burdensome for your family during your upsetting absence. It is where term insurance comes into play, where the revenues from your term insurance policy pay off your loans and ensure that your family is not financially burdened.

Saves you from health-related buffers: In this day and age where young adults face a health crunch, the chances of having lifestyle health severity increases with growing age. Term insurance policies include critical illness coverage that protects your family not just in the event of an unexpected occurrence but also throughout their life. It provides the insured with health coverage if diagnosed with a critical illness such as cancer and many more.

Best Term Insurance to buy in India for 2022

In this section of the blog, I am going to provide you with the best-filtered term insurance plan that one should consider buying for 2022, and they are as follows:

Aditya Birla Sun Life Insurance DigiShield Plan

This term insurance plan is also known as the 'Sabka Vala Term Plan' because it is dynamic and serves as a broad umbrella that accommodates the needs and requirements of people from different walks of life in the best possible manner. 

To begin with, this comprehensive term insurance plan by ABSLI comes with 10 Options (that serves different people), and they are:

1. Level Cover Option
2. Increasing Cover Option
3. Sum Assured Reduction Option
4. Whole Life Option (Level Cover)
5. Whole Life Option (Sum Assured Reduction Cover)
6. Income Benefit
7. Level Cover plus Income Benefit
8. Low Cover Option
9. Level Cover with Survival Benefit
10. Return of Premium (ROP)

Benefits and Features of ABSLI DigiShield Plan are:

Death Benefit: If the insured meets with untimely death during the active policy term, the insurance company will pay the death benefit to the nominee(s)/legal heir(s) as specified by the policyholder's Plan Option.

Enhanced Life Stage Protection: Marriage and having children are a beautiful part of life. Don't you want to secure their future? If yes, then this benefit is the answer.  If you pick this plan, you will be able to increase your life insurance coverage after each of these events without undergoing any medical examinations.

Accelerated Critical Illness Benefit: If the term plan is active and fulfills the relevant ACI terms and circumstances, the Accelerated Critical Illness sum assured will be paid on the initial diagnosis of the listed critical illnesses within the ACI Benefit Cover Period.

Riders: For a small fee, you may supplement your insurance coverage throughout the term plan by adding the riders such as:

• ABSLI Accidental Death and Disability Rider
• ABSLI Critical Illness Rider
• ABSLI Surgical Care Rider 
• ABSLI Hospital Care Rider 
• ABSLI Accidental Death Benefit Rider Plus
• ABSLI Waiver of Premium 

Terminal Illness Benefit

Survival Benefit

Note: Read through your selected Options to understand what perks you can avail of under a specific Option.

Conclusion

Life is a bubble that is trespassed by many uninvited guests. While some are pleasant, some are stressful. In such negative situations providing financial protection for your loved ones in an emergency delivers unparalleled peace of mind, and you can perform this duty by purchasing term life insurance. 

Always understand your requirements, understand your budget, compare alternative plans and comprehend the numerous restrictions and exclusions. You may then choose the one that provides the most advantages at pocket-friendly prices.