Pure Term Insurance: Overview

Indeed, holding term insurance provides policyholders peace of mind, knowing their family members will be cared for in their absence. The whole purpose of buying term insurance is to get life cover and financial security for loved ones.

There are different types of variants in term insurance, and the most common is a pure term plan. It is similar to basic term plans, and pure life insurance products offer life coverage for a specified tenure.

In case of the policyholder’s demise throughout the policy tenure, the beneficiary receives the sum assured payout. It allows policyholders to protect the life of their loved ones financially, regardless of what life has planned for them. These plans offer a comprehensive sum assured amount at affordable premiums.

What is Pure Term Insurance?

Pure Term Insurance is a type of life insurance policy that provides coverage for a fixed number of years. In the event of the policyholder’s sudden demise during the policy term, the nominee will receive a death benefit. However, this variant of term insurance has no survival benefits, which means if the insured person outlives the policy term, they will not get maturity benefits.

Moreover, this plan is designed to offer financial protection. The premium for a pure term insurance plan is typically more affordable than other types of life insurance products, making it an accessible option for many individuals.

For instance, Prateek, a 25-year-old man living a healthy life with no alcohol or history of medical problems, can purchase a term plan that provides Rs. 1 crore coverage for 40 years at Rs. 984 per month.

What is the Point of Buying a Pure Term Insurance Plan?

As mentioned above, a term plan and a pure term plan are quite similar, both providing life cover to the insured person’s family members. Despite their numerous features and benefits, many people are still unaware of the importance of term insurance. Here, we’ve listed crucial points about buying a pure term insurance plan:

Term Insurance - Benefits

• Wide Coverage at Low Premiums
  Pure Term Insurance plans offer a comprehensive sum assured amount at affordable premiums as compared to other types of life insurance products.

• Cover Against Critical Illnesses
  Along with life cover, a pure term insurance plan can also protect against critical illnesses. With an additional premium, you can add a critical illness rider to your basic term plan, which provides a lump sum payout when an insured person is diagnosed with a critical illness, including heart attack, cancer, kidney failure, etc.

• Death Benefits
  If, in the unfortunate circumstance of your death during the policy term, your family will receive the death benefit from your term insurance. Furthermore, your nominee has the option to receive a lump sum benefit accompanied by regular income in your absence.

• Rider Options
  Pure term plans can be enhanced with riders, such as accidental death riders, critical illness riders, and permanent and total disability riders, providing additional coverage for specific risks or situations. This adds great value to a pure term insurance plan and does not leave any aspect uncovered.

• Flexible Premium Payment
  Policyholders have the flexibility to choose premium payment frequencies, including monthly, quarterly, half-yearly, or yearly, based on their convenience.

Key Features of Pure Term Insurance Plans

Who Can Buy Pure Term Insurance Plan

A pure term plan has many features. Here is a list of individuals who must buy the plan to get the maximum benefit:

• Breadwinners
  For the earning member of a family with dependents, pure term insurance helps them meet their financial needs.

• Persons with Loans or Debts
  If there is an outstanding loan such as a car loan, home loan, or personal loan, pure term insurance provides coverage to settle the loan in case of any unforeseen situations.

• Business Owners
  A pure term insurance ensures that your business partners or family members can manage the business’s financial obligations and continue its operations in the event of your untimely death.

• Persons with Dependents
  If you have family members who are dependent on you for their financial support, such as parents, siblings, or any other family members, a pure term insurance plan can provide them good coverage.

• Young and Healthy Individuals
  It is advisable to buy a term insurance plan when you are young and healthy. Premiums tend to be lower at a younger age, allowing you to secure a higher coverage amount for your loved ones at an affordable cost.

• Individuals Planning for the Future
  If you have long-term financial goals, such as creating a substantial corpus for retirement or leaving a significant inheritance for your loved ones, a pure term insurance plan can be a valuable tool.

Claim Settlement Process for Pure Term Insurance Plans:

This is a hassle-free process designed by the insurance company, which gives policyholders a smooth experience and takes very less time to settle. Here are the steps that a person should follow to settle the claim:

• Claim Intimation
  In the event of the policyholder's untimely demise, the nominee needs to inform the company about the claim.

• Document Submission
  The claimant is required to submit all necessary documents to support the claim.

• Document Verification
  Once the documents are submitted, the company will verify all the details. If any information or document is missing, the insurer will request additional details.

• Settlement Decision and Settlement
  After the verification and investigation, the insurance company will make a decision regarding the claim settlement and disburse the claim amount to the nominee’s bank account.

Difference Between Pure Term Insurance And Term Plan With Return of Premium (TROP)

Conclusion

Pure Term insurance is similar to basic term plans and offers life coverage for a specified tenure. It is an affordable life insurance product offering comprehensive coverage at low premiums. The insurer provides the policyholder the flexibility to pay the premium yearly, half-yearly, or even make monthly payments.