Under which type of plan the sum assured is paid only if the insured person survives the specified period?
Insurance is a service that allows the insured individual to shift their risk to the insurer in order to keep the dependents in their family safe, secure, and assured about the future. Unforeseen risks and small accidents help us realise the significance as well as uncertainties of our life. Any individual can not avoid the risks and uncertainties, but can keep oneself protected and secured financially with the help of insurance.by doing so, the individual would be able to
impact not only his/her own life but also that of their family. Life insurance plans compensate against the financial loss that is suffered in case of premature death, and also helps fulfil life goals effectively. Term plans are different from other types of life insurance plans pertaining to various aspects. Life insurance plans have many variants out of which
term insurance plans are one of the types of these plans. It is important to understand what is life insurance vs term insurance as an informed buyer. What is Term Plan?A Term insurance plan is a type of life insurance plan for a fixed period of time/term. Once an individual buys a term insurance plan, he/she is insured for a particular period (term) of the plan. In case of the person’s demise during the term of the plan, the sum assured is paid by the insurance provider to the nominee of the policy plan. However, if the insured individual survives the term, no claim can be made. A term insurance plan thus offers no maturity benefits in case of the survival of the insured individual during the policy term period. However, it must be noted that a term insurance plan is the most affordable and economical plan. A term insurance plan is of three types, which are as listed below:
Each of the term plans can be further understood in a better manner as follows :
Additionally, some insurance providers also include a Return of Premium (ROP) clause in the policy term that entitles the buyer to receive the premiums, that he/she has paid while the policy term was ongoing, after maturity of the plan. The advantage of this policy plan is the low rate of premium that also attracts many buyers who are usually belonging in the age group of 25-30 years. However, the policy buyers must keep into consideration that the rate of premiums keep on increasing with time in a term plan. What is Life Insurance?Life insurance plan is an arrangement wherein the individual purchases financial protection from the insurance provider by paying the insurance provider with small amounts of premium at regular intervals. By investing in a life insurance plan today, you can secure the future of your family. Life insurance plans are affordable and help prepare for the long-term future plans without any interruption. With the help of these plans, you can secure your future without disturbing your current financial goals. Moreover, life insurance plans help the policyholder to be assured of the maintenance of their loved one’s lifestyle in their absence. The rate of premium in a life insurance is high and fixed. Life insurance provides both death benefit as well as income benefit, and the cash accumulated over time can be retained and used at the discretion of the insured policyholder. This cash can even be used for premium deduction of be saved for retirement. Life insurance provides both financial security and life protection to the insured. Life insurance plan entitles the subscriber to a pre-decided maturity benefit amount. In case of the demise of the policyholder during the policy plan term, the nominee receives the sum assured by the insurance provider. Life insurance is provided in the form of various policy plans as mentioned below:
Difference between Life Insurance and Term InsuranceAfter understanding the basic meaning of both term insurance and life insurance, it is important to understand the difference between life insurance and term insurance to be able to choose the right policy plans. The difference between term and life insurance can be understood and determined based on the following aspects:
The difference between term plan and life insurance can further be understood in a tabular form as follows:
Which one to Choose- Term Insurance and Life InsuranceBoth term insurance and life insurance plans have their own relevance and significance. Term insurance plans are a must for everyone as they provide financial security against the possibility of a premature death. By understanding the difference between term insurance plans and life insurance plans, one must choose the most relevant and right plan for themselves and their family. While term insurance plans are necessary for everyone, other life insurance plans have the following target audience in general:
Disclaimer:The article is meant to be general and informative in nature and should not be construed as solicitation material. Please read the related product brochures for exclusions, terms and conditions, warranties, etc. carefully before concluding a sale *Tax benefits are as per the Income Tax Act, 1961, and are subject to any amendments made thereto from time to time’ In which assurance a sum is payable only if person dies in the given period?Key Takeaways. Term life insurance guarantees payment of a stated death benefit to the insured's beneficiaries if the insured person dies during a specified term.
In which type of life insurance policy insurance amount is payable only to the survivors of the insured?Whole Life Policy: In this kind of policy, the amount payable to the insured will not be paid before the death of the assured. The sum then becomes payable only to the beneficiaries or heir of the deceased.
In which policy death benefit is paid only if the insured dies before the specified period?1) Pure term plans
These plans provide only the death benefit when the insured dies within the chosen term of the plan. In case of survival till plan maturity, nothing is paid.
In which policy if the policyholder survives?Endowment Policies:
Meanwhile, if the policyholder survives the policy term, he/she receives a lump sum payout as the maturity benefit.
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