As if we are talking about life insurance, then, in early days, term insurance was the most preferred option. Under a term insurance, a policyholder gets the simple life cover against the life uncertainties and in return pays premium for it. No further inclusions and terms were being discussed with a term plan. Nowadays, there have been so many new concepts that have been introduced as an insurance product. Such kind of specific life insurance plan not only offer protection cover, but also helps you in saving funds, accumulate wealth as well as enjoy some tax benefits on the paid premiums.
Following are the disadvantages of a term insurance:
• For beginners, pure term life insurance promises to pay the sum assured, only when the policyholder dies.
• It does not offer any other kind of benefit like bonus or returns.
• If the policyholder survives during the whole policy term, there would be no maturity benefits offered to him or her.
• There is no saving option you have with your term plan and it would not help you in accumulating wealth.
Although, premiums of term insurance have come down as life insurance companies offer products online in the backdrop of improved mortality experience. For instance, now, a 30 years old male life assured can get a pure term life insurance of 1 crore and for a term of 30 years, by paying a premium of below Rs. 10,000. But, as we have discussed above, this basic life cover would be of no help if the policyholder meets with an accident and loses or become permanently disable. The only solution is to enhance the life cover with accident disability riders, which may help you to an extent.
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