Term Insurance Policy

Term Insurance Policy is a no frills life insurance plan and it covers your life for a term of one or more years. It pays a death benefit only if a person die's within the term period. Term Insurance generally offers the cheapest form of insurance, because it does not offer any residual value on maturity. You can renew most Term Insurance policies for one or more terms even if your health condition has changed. Each time you renew the policy for a new term, premiums may climb higher. Term insurance policies, cover only the risk during the selected term period and some times it is also called as "pure risk policy". Term Insurance is the simplest, traditional and the also cheapest life insurance available.If the policyholder survives the term, the risk cover comes to an end or if the policy holder dies in between the term period his family members or nominee receives the insured amount by the insurance company.

There is no limit to the amount of insurance cover you can buy for your self, but it is advisable that your should least have 8 to 10 times of your yearly income as term insurance cover. The logic behind this calculation is that in case you suffer a sudden loss of life, your family or dependents should have sufficient amount to sustain the expenses for atleast 8 to 10 years. A Term insurance plan is a pure risk cover plan and it also 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.

There are a few insurance riders or "add on" which can be clubbed with term insurance policies by paying additional premiums. As of now there is no need for a medical check-up if you buy a term insurance for Rs. 5 lacs cover, till the age of 45 years. The insurance premiums differ with age , health condition and whether you smoke or drink alcohol, the insurance premiums are the lowest in the early years and gradually increase with age.