Insurance Comparison

Term insurance can be defined as a type
of insurance that is availed for a certain period
of time or a fixed term (number of years). The
basic differentiating feature of term insurance is
that unlike other types of life insurance policies,
a term insurance policy is less expensive since it
does not have any cash value. The policy comes
useful only if the policyholder dies within the
timeframe during which the term insurance policy
is in force.

Term insurance policies are offered by almost all
major insurance providers and these come for various
terms like 10 years, 20 years, 30 years etc. The most
significant point about term insurance policies is that
most of these policies have a built-in feature to get
converted to permanent life insurance policies irrespective
of the state of health of the term insurance policyholder.

Types of Term Insurance Plans:
Regular Term Insurance plans:
A regular term insurance plan is a no-frills
insurance plan that provides coverage against a
specific set of risks on payment of a pre-decided
premium amount. These plans offer no benefits
upon maturity. Premium payments can be made
periodically or they can be paid at once (single pay).
The options for insurance cover can go as high as the
insurer is willing to underwrite and the policy tenures
can be as high as 20 years. When the policy matures,
the insurance cover ceases, as does the need to pay
premiums for such a cover.

Term Return of Premium Plans (TROP):
Similar to a regular insurance plan, a TROP offers
a refund of the premium upon the policy’s maturity
if the policyholder survives till the policy matures. A
TROP plan generally allows policyholders to add riders
or benefits to their existing plans to increase their coverage.
TROP plans have a slightly higher premium amount
compared to regular term insurance due to the premium
repayment facility.

Group Term Insurance Plans:
As is made obvious by the name, a group term
insurance plan is meant to be an insurance instrument
that can be used by a group to secure its members
against untoward occurrences. These plans can be taken
by any group of people or companies for their employees
but can come with one essential clause, which is that there
may be a mandate set by the insurer where the policy will
require a minimum number of people participating in it. For
example, if a policy says that it will cover groups of at least
20 people then a small company that has less than 20
employees won’t be able to purchase the policy.

The benefits of such a plan are similar to individual policies
but the list of illnesses and other factors are generally more
exhaustive as compared to an individual policy.

Endowment Plans:
Endowment plans are non-linked insurance plans that
offer both savings as well as protection. Endowment
plans can extend up to 35 years, with the maturity at
75 years. Endowment plans come with a maturity
benefit as well as a death benefit. Under the maturity
benefit, if the policyholder survives till the policy matures
and has paid all premiums, he will receive the premium
as well as a bonus amount on maturity.

Some insurers provide add-ons such as accidental
death benefit which can be availed along with an
Endowment plan.

Money Back Plan:
A money back plan is similar to an endowment plan.
As the name suggests, a money back plan pays out
a specific sum during the policy term. The Sum Assured
amount is paid out over the policy term at regular intervals.
If the policyholder survives after the plan matures, the
balance of the Sum Assured is paid in a lump sum.