What is Term Policy?
Term policies, cover only the risk during the selected term period. If the policyholder survives the term, the risk cover comes to an end.
A Term plan is designed to meet the needs of people who are initially unable to pay the larger premium required for a whole life or an endowment assurance policy, but they hope to be able to pay for such a policy in the near future. Hence, it may be desirable to leave the final decision regarding the plan to a later date when a better choice could be made.
No surrender, loan or paid-up values are granted under these policies because reserves are not accumulated. If the premium is not paid with the days of grace, the policy will lapse without acquiring a paid-up value.
However, a lapsed policy may be revived during the lifetime of the life assured but before the expiry of the period of two years from the due date of the first unpaid premium on the usual terms. Accident and / or Disability benefits are not granted on policies under the Term plan.
How is it beneficial to me?
Term policies are an ideal option if you are unable to pay the larger premium required for a Whole Life or Endowment policy, but hope to be able to pay for such a policy in the near future.
The sum assured is payable only in the event of death of the Life Assured before the expiry of the specified original term.
Who should buy this plan?
A Term plan is particularly beneficial for people who are initially unable to pay the larger premium required for a whole life or an endowment assurance policy.
During the duration of the Term, the policy cannot avail of surrender or loan or paid-up facilities.