To suit the varying needs of the policyholders, insurers now offer several plan options with their term policies. Read this post to know more about some of the most popular term plan options.

If you are planning to purchase term life insurance, you should first know about the different types of options now available in the market. The benefits can significantly vary between plans, and it is only by understanding the popular options that you can make the right buying decision.

So, to help you select the best, we have listed 5 of the most popular types of term plan options-

1. Life Option

This is the most common type of term plan. It comes with sum assured, which is paid to the nominee of the policy in case of the unexpected death of the policyholder within the policy tenure. The sum assured is paid as a lump sum amount in this plan.

Some insurers also cover terminal illnesses and total permanent disability in these plans. In the case of total permanent disability due to an accident, there is also a premium waiver benefit. It eliminates the need for the policyholder to pay the future premiums of his/her term policy.

2. Extra Life Option

Accidents can happen anywhere and anytime. The extra life option available in term plans helps policyholders remain protected against such accidents. With the extra life option, apart from the sum assured of the policy, the nominee will receive an additional payout if the policyholder dies due to an accident.

Cover for terminal illness and waiver of premium in case of total permanent disability is available with the extra life option too.

3. Return of Premium (ROP) Option

In case if the policyholder survives the policy tenure, they also have the option to receive the premiums back from the insurer with the return of premium or ROP option. In case of death of the policyholder within the tenure or on the diagnosis of a terminal illness, the nominee will receive the assured sum as a lump sum amount.

4. Income Option

To ensure the long-term financial stability of policyholders’ family, insurers offer the income option available with term plans. With this option, the sum assured will be paid in the form of monthly income to the nominee.

Policyholders can either select a fixed monthly income to go with the increasing monthly option to better meet the financial needs of their family in case of demise.

5. Income Replacement Option

With this option too, the sum assured is paid to the nominee in the form of fixed or increasing monthly income as selected by the policyholder. But in the event of policyholder’s death or diagnosis of terminal illness, the nominee also received a lump sum amount.

This amount can be as high as 10-12 times of the monthly income. This is to help the nominee take care of the sudden expenses arising from the death or terminal illness of the policyholder.

Making the Right Selection

These are some of the most popular options that you can consider if you are planning to purchase term insurance. Make sure that you understand these options, including their benefits and limitations, before making a decision.

If you are unable to decide, you can consult a reputed insurer to help you pick the best as per your custom requirements and needs.