Short-Term Insurance Policy: Here’s What You Need To Know

Oct 11, 2018 | 3 months ago | Read Time: 3 minutes | By iKnowledge Team

Understand the elements in short-term insurance policies and how to get the right quote when you buy one.

Short-Term Insurance Policy - Aegon Life

A term insurance plan helps to keep your family safe and sound when you are no longer with them. It’s like an umbrella which will prevent your family from the financial hardships and struggle when you are gone.

Different from usual annual typical policy, a term plan offers a high cover amount and is usually seen as an investment on behalf of your loved ones. Term insurance involves payment of nominal premiums which is paid for a specific period within which if any misfortunate event takes place, your family/nominee will be entitled to receive a large amount also known as insurance cover or sum assured.

What about short-term insurance policy?

While a term plan is amongst the simplest form of life insurance, a short-term insurance is a further bifurcation based on the tenure. While it is advisable to take a term insurance which insures for most of the life, preferably 75, you can choose a short-term insurance policy which can be between 5-25 years long. A short-term insurance policy is taken by the buyers to meet temporary needs. The major difference between a short-term and long-term insurance policy is the contract term.

Let us learn about key short-term insurance policy features:

  • Premium can be changed: Unlike a long-term insurance where you can lock-In the premium amount to be paid throughout, premium in short-term insurance can be changed based upon your preference. Premium amount can be increased or decreased considering several factors such as earning, tenancy, disbursals, mortality and so on.
  • Renewable in nature: Shrugging off a myth that short-term insurance policies can’t be renewed, whether you take a 20-year policy or a 50-year one, you can renew your term insurance any time. With this facility, you can pay the same premium and enjoy the benefits which were first promised.
  • Tax Benefits: Term insurance entices the consumers mainly because of its tax savings. Though experts advise that tax saving shouldn’t be the reason for people to purchase term insurance, many people do so keeping Section 80C of the Income Act in mind which provides tax benefits on premiums paid and sum assured from taxation.
  • Death Benefit: If the person insured dies, the assured sum is allocated to the nominee. Based upon the insurance plans, the amount may differ. Furthermore, the assured sum can be availed in many ways: lump sum payment, partial lump sum amount, yearly, quarterly, monthly and so on.
  • Additional Rider Benefit: Perhaps the most underrated feature of a short-term insurance is the additional rider benefit. Riders simply make your insurance stronger and help you get additional coverage. These riders cover everything from disability and critical illness to income benefit and premium waiver. Aegon Life provides unmatched customizable policies which cover and provide additional benefits. If your family has a history of critical illness, opting for these riders is advisable as they will help protect your family from burdensome cost of illnesses. Our iTerm Plus is a comprehensive online term plan where you can choose from a choice of four plan options which offer different in-built benefits like accidental death and critical illness. So, while you get no money back with iTerm Plus if things stay well through the entire term, it is the one plan that can assure your loved ones of adequate protection, if the worst were to happen.
  • No Survival Benefits: While additional rider benefit is amongst the most impressive term insurance feature, no survival benefit is what turns the consumer’s heads away from this product. However, most people fail to understand that term insurance is specifically designed to cover for short-term and that’s the reason why it has low premium, so to make it viable when it comes to safeguarding your family’s interest.

For people at different stages in their life, term insurance has become a necessity regardless of the age and gender. Due to its pure protection nature, term insurance is not viewed as an investment plan as the premiums are simply used to cover the risk.

How to calculate your term insurance premium

To determine the right protection amount, use the term insurance premium calculator. Within seconds, you can get the perfect quote required to safeguard your family. The sooner you fill the form, the quicker you get to know about the amount. After all, life’s all about protecting what’s most important to you and that’s your loved ones.

All you need to do is enter your details as shown below, and you will get an estimate for your term premium.

Calculate premium for your Term Plan

  • Y N
    • Annual Income
    • Sum Assured
    • Select Cover Upto Age
    • Name
    • Mobile
    • Email ID
Your Annual Premium for Aegon Life iTerm Insurance Plan
Prev
Ways How Organ Donor and Recipient Can Earn Benefits from Life Insurance
Next
Health Insurance Policy: When to Buy It?

RELATED ARTICLES