1. Unlike a money back policy it is a pure insurance plan with no investment component. A term plan is a specific type of life insurance policy that provides protection for a definite period of time or ‘term’. In the event of the unfortunate demise of the insured person during the specified term, the insurance company pays the beneficiaries of the insured a pre-determined sum of money. In case the case nothing happens to the insured person after the expiry of the plan then there is nothing that the Insurance company would owe you. This is just like a vehicle insurance but it is much cheaper.
2. The advantage of a term plan is that there are no hidden charges. It gets you a big life cover for a small amount of money. It is the cheapest life cover that you can get.
3. If one needs life cover this is the type of Insurance to go for. For example for a person of age 30-35 a term cover of 1 crore could cost him around Rs 10000 a year( appx-could vary with age and other factors). In case something happens to him/her the survivor gets 1 crore. At the end of the term plan if nothing happens then there are no returns or money back. With age the cost of Term Plan goes up. These can be purchased online/other places after comparing the prices from various Insurance Companies.
4. Who should go for term Insurance: Those people who do not get adequate/no life cover from their companies can go for it. In armed forces we do not really need it. Lets say when you retire and are working somewhere outside and you need life cover then you can go for a term plan.
5. To summarise: A endowment plan is a total no no. If you need insurance just buy term insurance.
6. To buy a term insurance there are many websites available to choose from( policy bazaar etc) or you can take it from other places as well. But insist for a term insurance if someone tries to sell you a money back policy.
