- What is Pure Term Insurance
- Who Can Buy Pure Term Plan
- Claim Settlement Process
Pure Term Insurance: Wide Coverage at Low Premiums
Indeed, holding term insurance provides policyholders peace of mind, knowing their family members will be cared for in their absence. As we know, the whole purpose of buying term insurance is to get a life cover and financial security for his loved ones.
There are different types of variants in term insurance, and the most common is a pure term plan, even though most people are familiar with it. It is the same as basic term plans and pure life insurance products offer life coverage for a specified tenure.
In case of the policyholder's demise throughout the policy tenure, the beneficiary gets the sum assured payout. It allows policyholders to protect the life of their loved ones financially regardless of what life has planned for them. These plans offer a comprehensive sum assured amount at affordable premiums.
What is Pure Term Insurance?
Pure Term Insurance is a type of life insurance policy that provides coverage for a fixed number of years. In the event of the policyholder's sudden demise during the policy term, the nominee will receive a death benefit. However, this variant of term insurance has no survival benefits, which means if the insured person outlives the policy term, they will not get maturity benefits.
Moreover, this plan is designed to offer financial protection. The premium for a pure-term insurance plan is typically more affordable than other sort of life insurance products, making it an affordable option for many individuals.
For instance, Prateek, a 25-year-old man living a healthy life with no alcohol or history of medical problems, can purchase a term plan that provides Rs. 1 crore coverage for 40 years at Rs. 984 per month.
What is the Point of Buying a Pure Term Insurance Plan?
As mentioned above, a term plan or pure term plan is quite similar, and they both provide a life cover to the insured person's family members. Despite having several features and perks, people still need to learn about the importance of term insurance. Here, we've listed three crucial points about buying a pure-term insurance plan below.
To Secure Your Loved One's Life
Whether you're a family breadwinner or want to help your parents secure a better retirement or pay for your child's higher education, term insurance is an ideal choice. However, in case of your demise, your family gets an assured amount as a death benefit.
To Protect Your Assets
Most youngsters these days prefer a loan option when they need immediate funds. But if something happens to you during the loan tenure, then your family may have to deal with the load as well as the loss of your income. If they cannot repay the loan, the bank will cease your assets and sell them on auction.
To Manage the Risks Associated with Inflation
It has become increasingly common to hear about the growing prevalence of lifestyle diseases and severe health conditions like heart disease and cancer. With a term plan, you can receive financial assistance when dealing with a diagnosis and during recovery.
Term Insurance - Benefits
- Wide Coverage at Low Premiums
Pure Term Insurance plans offer a comprehensive sum assured amount at affordable premiums as compared to other types of life insurance products. - Cover Against Critical Illnesses
Along with life cover, a pure-term insurance plan also protects against critical illnesses. With an additional premium, you can add a critical illness rider on your basic term plan, which provides lump sum coverage when an insured person is diagnosed with a critical illness, including heart attack, cancer, kidney failure, Etc. - Death benefits
If, in the unfortunate circumstance of your death during the policy term, your family will receive the death benefit from your term insurance. Furthermore, your nominee has the option to receive a lump sum benefit accompanied by regular income in your absence. - Rider Options
Pure-term plans can be enhanced with riders, such as accidental death riders, critical illness riders, permanent and total disability riders providing additional coverage for specific risks or situations. This adds great value to a pure term insurance plan and does not leave any aspect uncovered. Pure term insurance can be enhanced with riders - Flexible Premium Payment
Policyholders have the flexibility to choose premium payment frequencies, including monthly, quarterly, half-yearly, or yearly, based on their convenience.
Key Features of Pure Term Insurance Plans
Low Entry Age
Term Insurance has a low entry age, so you're eligible to opt for a term plan at just 18 years. Policyholders are allowed to purchase plans for themselves as well as their loved ones on reaching adulthood.
Long-Term Protection
Term plans are a type of life insurance policy that offers whole-life coverage and gives policyholders peace of mind, knowing their family members will be cared for in their absence.
Flexibility
With a term insurance plan, insurers offer policyholders the flexibility to select the sum assured amount per their needs when buying.
Flexible-Premium Payment Options
With term insurance policies, policyholders have the flexibility to select how they want to pay the premiums. However, you can choose to pay your premiums yearly or half-yearly or even make monthly payments.
Easy to Buy
In this fast-paced digital world, it's easy to buy a term insurance policy that gives peace of mind. Some insurers offer online and offline ways to buy term life insurance without a medical exam.
Liability Protection
In case of policyholder demise, the insurer provides a death benefit to their family members. It offers financial assistance to the insured person's family and helps secure them against several liabilities.
Who Can Buy Pure Term Insurance Plan
A pure-term plan has many features, here is the list of individuals who must buy the plan to get the maximum benefit of these plans:
- Breadwinners
The person who is earning in the family and if he/ she has dependents, pure term insurance helps them to meet their financial needs - Person with Loans or Debts
If there is an outstanding loan such as car loan, home loan or personal loan a pure health insurance provides coverage to settle the loan, in case of any unforeseen situations. - Business Owners
A pure term insurance ensures that your business partners or family members can manage the business's financial obligations and continue its operations in the event of your untimely death. - Person with Dependents
If you have family members who are dependent on you , such as parents, siblings, or any other family members for your financial support, a pure-term insurance plan can provide them good coverage. - Young and Healthy Individuals
It is advisable to buy a term insurance plan when you are young and healthy. Premiums tend to be lower at a younger age, allowing you to secure a higher coverage amount for your loved ones at an affordable cost. - Individuals Planning for the Future
If you have long-term financial goals, such as creating a substantial corpus for retirement or leaving a significant inheritance for your loved ones, a pure-term insurance plan can be a valuable tool.
Claim Settlement Process for Pure Term Insurance Plans:
This is a hassle-free process designed by the insurance company, which gives policyholders a smooth experience and takes very less time to settle. Here are the steps that a person should follow to settle the claim:
- Claim Intimation
At the time of untimely demise of the policyholder the nominee needs to inform the company about the claims. - Document Submission
The claimant is required to submit all the necessary documents, in order to support the claim. - Document Verification
Once the documents are submitted the company will verify all the details. And if any information or document is missing, the insurer will ask for additional details. - Settlement Decision and Settlement
After the verification and investigation, the insurance company will make a decision regarding the claim settlement and will send the claim amount to the nominee's bank account.
Difference Between Pure Term Insurance And Term Plan With Return of Premium (TROP)
| Pure Term Insurance | Term Plan With Return of Premium | |
| Cost of Premiums | As compared to the TROP these plans have lower premiums. | Since these plans pay back to the customer, the premiums are higher. |
| Additional Features | Typically pure term insurance offers only riders and no other benefits. These term plans only offer. | They offer additional features such as return of premium, convertibility options and riders. |
| Loss of Premiums | If the policyholder outlives the policy term, all of the premium are lost | If the policyholder survives, the premiums are paid back to the policyholder after deduction of taxes and gst. |
Conclusion
Pure Term insurance is the same as basic term plans and offers life coverage for a specified tenure. It is an affordable life insurance product offering comprehensive coverage at low premiums. However, the insurer provides the policyholder the flexibility to pay the premium yearly or half-yearly or even make monthly payments.
Pure Term Insurance Plans : FAQ
1. Which is the simplest form of term insurance?
Pure term insurance is the simplest form of term insurance, and it is the same as basic term plans that offer life coverage for a specified tenure.
2. What is the maximum sum assured policyholders can choose?
Typically, the maximum sum assured policyholders can choose is ten times the per annum revenue of the policyholders.
3. Does Pure Term Insurance pay back the sum assured on maturity?
Under the Pure Term Insurance plan, policyholders only get death benefits and don& 039;t receive maturity benefits if they complete the policy tenure.
4. Which is a pure protection insurance plan?
A pure protection plan only provides insurance cover in case of the demise of a policyholder due to illness or sickness and with any surrender value capped at the premiums paid.
5. What are the disadvantages of term life insurance?
Remember that the premium will keep increasing as the policyholder& 039;s age increases, and no maturity benefits will be paid if the insured person clears the policy tenure.
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Written By: Varun Saxena
I am a passionate content writer with over three years of experience in the insurance domain. An avid learner, I always tries stays ahead of the industry's trends, ensuring my writing remains fresh and includes the latest insurance shifts. Through my work, I strive to engage with targeted insurance readers.
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