To understand ensured term life insurance, one must first understand term life insurance. A term insurance policy is a particularly designed life insurance strategy that provides financial stability to a person’s family in the event of any unanticipated events. An annual payment is paid, just like with other insurance policies, for a given term. If the nominee dies during that time due to an illness or accident, the nominee is guaranteed a death benefit equal to the value of the plan.
Term insurance and assured term life insurance have different features:
Premium: The premium for a term insurance policy is established after taking into account a number of factors, such as the insured’s age and general health. The premium is reasonable as a result. However, a larger premium is needed for secured term life insurance because previous medical checks were not performed. As a result, the insurance policy increases in cost.
Health Qualifications: Age, life expectancy, and medical history of the insured are all factors that affect term insurance rates. Insurance companies frequently demand that the person have a physical before concluding the insurance. However, while buying ensured term life insurance, there are no medical exams or questions about your health. Even if one has a major medical condition, they are still eligible for this policy. The fact that a person cannot be denied coverage because of ill health is a significant benefit of guaranteed term life insurance. It is not necessary for a person to be in perfect health, nor is it necessary for the insurer to conduct a thorough medical examination.
Graded Benefits: Normal online term insurance pays the family a lump sum after the insured passes away, but every assured term life insurance plan has a graduated benefit clause. This suggests that the beneficiaries would not receive the full death benefit until the insurance has been in force for a certain amount of time. This may begin at one year and increase to. If the deceased dies away within the first year of policy ownership, some insurance companies cap the death benefit at 25% of the assured sum, 50% within the second year, 75% within the third year, and 100% within the fourth.
This tactic avoids making massive payouts straight away to seriously ill people who might want to buy insurance so that their loved ones can receive a death benefit.
Death Benefits: Guaranteed term life insurance offers the family lower death benefits than regular term insurance plans. Usually, the death payments are not much more than what it costs to perform the policyholder’s final rites. However, because conducting a deceased person’s final rituals in India is typically expensive, this insurance would provide the family with the required financial resources.
People with health difficulties may purchase this insurance. However, there are other benefits. The two main benefits of a guaranteed term life insurance policy are its quick application process and tax-free death benefit for the policyholder’s family. According to Section 10D, payments of the death benefit to the nominee are not taxed. The elderly can purchase this policy and provide their family with death benefits, even though they would not typically be qualified for a conventional term insurance plan.