What is the advantage of buying a term policy?
Joshua Gonzalves, Mangalore
Term insurance is a category of life insurance policies in which the premium is not returned at the end of the policy period. In simple words, if case the policyholder dies while the policy is still running; his nominee will receive the sum assured. But, if he survives the policy term, he will receive nothing.
The premium for term policies is equal to the mortality premium, which is an integral part of all life insurance policies. Due to this the premium outgo on such policies is lower than those of other policies, such as an endowment plan. The biggest advantage of a term policy is that one gets adequate insurance for a cheap premium. Another benefit is that although one may get into a long-term contract with the insurers but there is no binding as far as the insured is concerned. Therefore, even if the insured discontinues the policy at any stage he does not lose anything financially. In our view the term insurance is the purest and best form of insurance.
