People Preferring Term Insurance Plans With Allied Features

With increasing policyholder’s interest in buying term insurance plans, insurance companies have started offering allied features with it. Term insurance plans have no longer remained just plain vanilla plans.

Pure protection plans pay nominees the pre-fixed amount in case of policyholder’s death. Of those online buyers, a majority prefer to choose term insurance as they are easy to understand and buy.

Increasing number of people is opting for online term insurance plans to benefit from lower premiums. Online term insurance plans are approximately 30% cost effective compared to offline plans. But price is not the only criterion any more to opt for online term insurance plans. Customers understand the importance of benefits, ease of buying and claims experience of company.

Additional features too drive their decisions. Given changes in life expectancy, people are looking for longer coverage and want to enhance cover through riders.

Customers are doing much more research before buying a  Online term insurance  plan, aided by internet. The decision making for customers has also become much faster. Here are some popular additional features that people opt for with term insurance plans:-

Increasing sum assured: When it comes to longer-term investments, inflation is an important factor to consider. To protect the sum assured from proving insufficient years later due to inflation, option that increase the sum assured over a period are being preferred. Few companies offer this as rider currently. But similar plans which increase sum assured at various life events are available. Options to increase cover in term insurance are meant for those who want to increase the protection cover at different life stages like marriage, child birth, etc.

Return of premium: This option is for those people who expect something in return from their every investment. For those survive beyond the term insurance policy tenure, term insurance would seem to be a wasteful expenditure. To fix this, an option of return on premium was initiated by some insurers. Such feature helps the policyholder get the premium back at the end of the tenure. Even though they are costly, the return on premium riders are being opted by individuals.

Staggered maturity payment: When it comes to maturity amount or death benefit, the payment of staggered payments over five-ten years instead of lumpsum benefits is being opted for. Policyholders are opting for a mix of income (staggered maturity payment) and lumpsum.

Policy tenure: Term insurance plans are available for a period of as low as 5-10 years. But people are often opting for the higher end. Typically, one should seek protection based on the retirement age. However, one can lock-in at lower premium if they buy insurance at younger age; the tendency has been to opt for longest possible tenure.

Salary replacement: There are covers available to protect one from loss of salary due to disability, accident, etc. This option takes away the uncertainty from the minds of the beneficiaries. Increasing benefit option (5% rise in insured amount every year) under a salary replacement plan also addresses inflation and rising cost of living.