After retiring from his job, Shambhunath, 65, wanted to purchase a term insurance policy, which would provide death benefits to his family. But he had a history of lifestyle diseases like diabetes, hypertension and elevated cholesterol levels. As the diseases would be found in the medical check-up prior to finalising the policy, Shambhunath was perturbed. He desperately wanted to leave something for his family. Then, one day, during morning walk, he met his friend Raghu. When he expressed his concerns to Raghu, the latter told him about guaranteed term life insurance , which did not have any health requirements. A day later, Shambhunath took the policy.

Before understanding guaranteed term life insurance, one must know about term life insurance. A term insurance is a specifically designed life insurance policy that protects an individual’s family and provides them financial security in case of any eventualities. Like most insurance plans, an individual pays a premium for a given term. If the individual passes away during that term because of an accident or due to health reasons, the nominee is assured a death benefit equal to the value of the plan.

Differences between term insurance and guaranteed term life insurance:

Benefits of guaranteed term life insurance: Individuals with health ailments can purchase this policy. But there are other benefits as well. The key benefits of a guaranteed term life insurance, include a simplified writing procedure, and tax-free death benefit to the policyholder’s family. Death benefit pay-outs to the nominee are exempt from tax under Section 10D.It is a valuable financial instrument for the elderly as an individual, who is otherwise ineligible for regular term insurance plan can avail this policy, and provide some financial resources to the family as death benefits.

If an individual has health ailments, and can not avail a regular term policy, guaranteed term life insurance is the best choice. Before taking a final decision, one must read the details and fineprint of the policy documents of different insurance companies to assess the benefits of the guaranteed term life insurance plan. Many insurance companies provide additional riders to the policy like accidental death benefits. One must also consider other key features like lifetime coverage, where premiums are required to be paid up to a certain age along with earlier payouts if the policyholder is diagnosed with a terminal illness. You can also opt for Generali Central Flexi Online Term Plan , which is not a guaranteed term plan, but a cost effective solution to your term insurance needs.