INTERVIEW QUESTIONS INSURANCE TERM LIFE INSURANCE DETAILS

Question: What is a Term Insurance Plan? How is it different than other life insurance schemes?

Answer: Term Insurance is a plain life insurance plan. It is the simplest and most fundamental death benefit plan without any money back or maturity benefits. The Term insurance product is designed for a specified term (between 5-30 years) and provides benefit to the beneficiary if the policy holder dies during the covered term. Financial experts believe that it is the best way of insuring as, the annual premium of term plan is very low and the sum assured (death coverage) is very high in comparison to any other insurance plans.

The major difference between Term Insurance & other plans is that a term insurance is a pure life insurance and is not an investment plan. It provides death benefit to the beneficiary only when the policy holder dies during the specified term. No money back in case the policy holder is alive at the end of the policy term.

Other Life insurance Plans:
Whereas Others are generally life insurance plus savings or investment plans that provide the death benefit (but very less cover in comparison to term plan) along with savings in case the policy holder is alive. Most of the other plans provide some return on the investment (although not guaranteed in most of the policy type) in form of money back, retirement benefits, child education etc. As these insurance plans are linked to several investments, so on the one hand, policy holder has to shell out extra premium to cover the cost of investment. And on the other hand, the life cover provided in these kind of policies is extremely less in comparison to the term plans.

Term Insurance is a plain life insurance plan. It is the simplest and most fundamental death benefit plan without any money back or maturity benefits. The Term insurance product is designed for a specified term (between 5-30 years) and provides benefit to the beneficiary if the policy holder dies during the covered term. Financial experts believe that it is the best way of insuring as, the annual premium of term plan is very low and the sum assured (death coverage) is very high in comparison to any other insurance plans.

The major difference between Term Insurance & other plans is that a term insurance is a pure life insurance and is not an investment plan. It provides death benefit to the beneficiary only when the policy holder dies during the specified term. No money back in case the policy holder is alive at the end of the policy term.

Other Life insurance Plans:
Whereas Others are generally life insurance plus savings or investment plans that provide the death benefit (but very less cover in comparison to term plan) along with savings in case the policy holder is alive. Most of the other plans provide some return on the investment (although not guaranteed in most of the policy type) in form of money back, retirement benefits, child education etc. As these insurance plans are linked to several investments, so on the one hand, policy holder has to shell out extra premium to cover the cost of investment. And on the other hand, the life cover provided in these kind of policies is extremely less in comparison to the term plans. Source: CoolInterview.com

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