To buy a term plan is to simply save your family's future with a good amount of monetary support. It is an essential part of the financial planning of an individual, which can assure them that even after their demise, the person can be sure that their family will be able to fulfil their needs and wants. If a person is interested in buying a term plan, they must also be considerate about what types of schemes are available in the market and what kind of benefits they provide.

The best way to make sure that a person is selecting the best scheme is to read all the Terms and conditions while opting for a term plan. These terms and conditions will determine that whether the family will be able to reap the benefits of the plan in case of the demise of the earning member of the family or not, and how difficult or easy it will be for them to claim the returns.

Some terms and conditions to consider before buying term plan-:

  • The medical condition of the policy buyer- The medical condition of a person is the biggest issue for an insurer as they need all the relevant information disclosed to them beforehand. Let's say a person hides a medical condition while buying the policy to decrease the premium amount; then, at the time of claim, the insurer holds the right to decline the claim if the policyholder has died due to a pre-existing medical condition that the insurer was not notified about. Most of the insurers are upfront about this clause and ask the policyholder to have a complete medical check before approving any policy. A person should be very careful and proactive in disclosing all the medical conditions while buying the policy so that their family can easily claim the amount without any hassle. This can also help the insurer provide the best possible scheme to the person who buys a term plan in relation to pre-existing medical conditions.
  • Death conditions- The reason for the demise of a person plays a vital role in the claim of the policy amount. In most term insurance plans, there is always a clause that if the policyholder dies due to a hazardous activity or suicide, then the insurer can refuse the claim altogether, even if a person buys a term plan from a well-known financial institution. People who suffer from chronic depression or worry too much about their family's future and are unable to fulfil their family's dreams are prone to take such drastic steps in order for their family to receive the claim amount, but this should not be considered as the easy way out as the company providing the insurance can always refuse the claim on the basis of this condition. The reason for the death clause should be discussed clearly with the company before getting into any kind of contract. These include death due to any adventurous sports, suicide or any inclusion in a criminal activity that might lead to the death of the policyholder.
  • Grace Periods- The grace period provided by the term insurer are also mentioned in the terms and conditions section. These grace periods are mostly of two types. Suppose in case a person who buy a term plan is not satisfied with the services or changes his/her decision to keep the term plan. In that case, they can cancel their policy without paying the first premium within a grace period provided by the insurer this is usually 15-20 days in the first month of buying a policy. The second type of grace period is if a person who buys a term plan cannot pay the premium on time, then they can have a bit of a grace period every month to repay this amount without having to pay any charges or cancellation the policy. This is usually different for every financial institution and should be considered for future payments.
  • Tax Benefits- Not all the Term policies provide the Tax benefits, and hence the terms and conditions should be read carefully before a person decides to buy a term plan. Most of the policies will have Tax exemption under the Income-tax act of 1961, which provides tax relief to the people who buy a term plan for their family.