The Lesser-Known Facts About Term Insurance That You Should Be Aware Of

Life is full of uncertain events that cannot be expected well in advance. Would you ever want to see your family member suffering after your death? Well, this is one question that does not even require an answer, right? While predicting the future is undeniably out of your control, what you can still do is protect yourself and your loved ones with prudent financial planning.  

This is where term insurance comes into the picture. You can apply for a term insurance plan to provide financial independence and protection to your family members. However, to achieve this without hassle, you must always stay prepared and choose the right insurance plan based on your dependents and future needs. 

Term Insurance: A Must-Have 

Term insurance is a type of financial protection plan. It is essentially an agreement between the policyholder and the insurer that guarantees to pay back a specific amount to the beneficiaries or nominees mentioned in the policy in the unfortunate event of the policyholder's demise. The amount received by the beneficiaries or nominees of the policy depends on the sum assured value of the plan. To pay for the coverage, the policyholder has the flexibility to choose from a range of premium payment methods: monthly, half-yearly, or annually. In addition to these, a policyholder also has the option to avail themselves of add-on coverage in the form of riders, which can be obtained by paying an additional cost.  

Thanks to the multiple benefits it offers, a term insurance plan is a plan that has gained immense popularity over the last few decades. However, before buying a term insurance plan from a specific insurance company, you need to explore some of the term insurance hidden facts that are listed below: 

Way to Protect Your Family's Future 

A term plan is one of the safest plans that helps to offer a large number of funds for your loved one's future. A sufficient amount is paid under this plan that helps to take care of the household expenses, children's education, weddings, medical expenses and many more. While purchasing the plan online, you must stay aware of the sum assured since the term insurance policy is not associated with the market. 

1. Offers Coverage Up to 85 Years of Age 

Undoubtedly you all know the benefits and features associated with term insurance. Still, only a few of you are well aware that you can buy a term insurance policy not only at an early age but can also apply in your late 50s and can take advantage of it up to the age of 85. However, the term insurance will be pretty expensive under such circumstances, but it will still help you to cover the potential risk. 

2. Term Insurance is for Real 

Term insurance is a pure protection plan that helps to provide cover to the insured and helps to offer financial protection to their family in case of unexpected events. You must buy term insurance if you are looking for your family's protection. 

3. Rejection of Claim Cannot be Due to False Disclosure 

While purchasing a term insurance plan, you should not hide any information about yourself or your illness. For example, most people do not disclose their smoking habits because of the higher premium, but this will cost you a fortune in the long run. When it comes to settling the claim of term insurance, the insurance company will properly investigate your age, medical history, and other such factors. If the insurance company finds any information submitted by you incorrect or false, it will lead to your plan's rejection. 

4. Sum Assured is Limited to 20 times of the Income 

The ideal sum assured amount is chosen on the basis of the policyholder's annual income and their monthly expenses. While deciding the sum assured amount, always take into account the effect of inflation. Most likely, it should be fifteen to twenty times your income. On this basis, the insurance company has capped the maximum amount to 20 times the policyholder's annual income. 

5. Sum Assured Can Increase During the Policy Course 

The life of a person keeps on changing as they move from one phase of life to another. Therefore, the changes in life phases could be insured at a different stage along with the protection feature that would adjust with changing lifestyles and preferences. At the same time, most term life insurance plans are designed to allow the policyholders to increase the amount of life insured at later stages. So, you can quickly increase the sum assured at different milestones of your life according to your requirements. 

These are some of the hidden term life insurance facts you must be aware of.  

Having read about the different term insurance hidden facts, the next important step is to find a plan that helps you achieve your future financial goals. Term insurance will not only give you protection but also help you avoid any circumstance where you put your family into financial distress. 

To financially secure your family, you should consider a reliable and fail-safe plan like the Kotak e-Term Plan by Kotak Life, which offers a multitude of benefits. This plan can empower you to have a stable future by providing advantages ranging from flexible payout to various tax benefits. So make the right choice and buy the proper term insurance plan to offer you and your family the best life cover.