In a previous issue of your magazine, you had said that one should prefer term plans for life insurance over other forms of insurance plans. Why term plans are considered the best?
Term insurance is the purest form of insurance—it provides cover only for the risk of death of the life assured. If the life assured dies during the policy period, his legal heirs receive the ‘sum assured’ under the policy; if the life assured survives the term, there is no return. The entire premium paid in a term assurance plan, that is, the cost of buying the insurance cover, is utilised for covering the risk of death of the life assured. It is for this reason that insurers offer this plan at the lowest cost. The best thing about this plan is its cost advantage. Due to this, one can afford to secure an adequate amount of coverage.
