Most common term plan options available for us to choose | PNB MetLife

You may have come across the terminology called “term insurance plans”. Term insurance or term plans are a type of life insurance policy where the insured has to pay premiums for a fixed term or period in exchange for a sum assured or death benefit that their beneficiaries can claim provided the insured meets with an untimely death during such a term. Term insurance plans provide a relatively higher sum assured or death benefit on its premium payout as compared to the other plans.

Not only is the wide range of life insurance policies available confusing, but term plans themselves are of various kinds. To ensure you choose the best term policy for you, you must understand the multiple options available for you to choose from. They are explained as below:

1. Level Term Policy
   This is the most basic and simple form of term life insurance. The sum assured is fixed as well as the term. And benefits under the same shall be payable or claimed by the beneficiaries only at the instance of the death of the insured. The common terms selected for this type of policy include 5, 10, 15, 20, 25, 30, or 35 years. This type is the best term policy for you if you are availing the same for long term financial planning, budget planning, or asset management since the premiums, in this case, does not increase or decrease. 
2. Return of Premium (TROP) Plans
   Many people view term plans in a negative light since the principle behind it lies on the condition that the insured should have passed on during the term else there is no death benefit eligible. It is human nature that you will feel that if you have incurred huge sums of money for a period in the form of premiums, that you should get some benefit at the end of it. To resolve this issue in people’s mindset, the TROP was introduced. Under this plan, you are eligible to receive your death benefit equivalent to the sum of the premiums paid by you; if you have survived beyond the term plan’s tenorMortgage.
3. Life Insurance Plan
   This is the best term policy if you wish to kill two birds with the same stone! Under this plan, your premium is usually constant, but the sum assured under this policy keeps declining every year. This is because the policy is linked to a mortgage that you may have availed on your house or property. Post the insurance holder’s demise, the insurance company pays for the mortgage. Not only are you and your family relieved from the stress of a mortgage, but repayment of the entire mortgage amount will also provide your beneficiaries with custody of the house in an already difficult time.
4. Increasing Term Plans
   This is the best term policy for one who visualizes growing in the future financially and wanting a higher sum assured. Usually, the sum assured is fixed once you enter into a term insurance plan. However, this term plan provides you with the option of increasing your sum assured on an annual basis, while maintaining the same premium amount. It is to be noted that in this plan, the premium will be slightly on the higher side.
5. Decreasing Term Plans
   Contrary to the Increasing term plan, under this plan; the sum assured keeps decreasing on an annual basis keeping in mind one’s obligations. This plan is beneficial for those who have relatively higher EMI obligations and wish to reduce their sum assured or insurance amounts.
6. Convertible Term Plans
   Insurance companies offer Convertible term plans with the option that allows converting the plan to an endowment assurance plan. This plan offers the death benefits of a term plan for the initial phase, and on conversion to endowment assures a maturity benefit, along with the death benefit.
7. Term Plans with add-ons/riders
   These term insurance plans allow you to choose and add various additional riders to the base plan. The commonly available add-ons are accidental death cover, critical illness cover, disability cover, etc.

Although term insurance plans are one of the most basic and conventional forms of insurance, they offer one of the highest sums assured with affordable premiums. With the variety of aforementioned options for term plans, you can choose the best term policy that resonates with your financial goals and assure your family of a protected future. Know more about Long Term Savings, & more by visit PNB MetLife website.