Quite a few of us know for a fact that a term plan covers an individual for a stipulated period. If death occurs during the term the whole cover amount (sum assured) is paid out. If policyholder survives the term he gets nothing. The term of this policy generally is a maximum of 30 years and maximum cover provided by any company is till the age of 65.
On the other hand Birla Sun Life Dream plan is a Unit Linked Insurance plan that provides the huge cover similar to that of a term plan. The minimum and maximum term of the policy is 5 and 25 years maximum age at entry is 50 years and a policyholder can be covered maximum till age 75.
Note: The premiums between both the plans for a similar cover and term are almost similar to each other
Comparisons between the two:-
1. Traditional term plan have no maturity value but BSL Dream plan returns the fund value less charges till date on maturity
2. Death benefit in term plan is the sum assured but in BSL Dream plan death benefit is Enhanced Sum Assured plus the fund value till date.
3. There are no charges levied on the term plan premium as the whole premium generally is considered as mortality premium or charge. For BSL Dream plan charges are levied for mortality, fund management, premium allocation etc and remaining premium is invested in the fund option as selected.
4. BSL Dream plan covers maximum till age 75 but only if you enter the policy at age 50 as the maximum age at entry is 50 and you can be insured for a maximum of 25 years only. A traditional term plan covers maximum for 35 years and till age 65 only.
5. As BSL Dream plan is a ULIP plan you get equity and debt exposure as per the fund selected. You have no such option in case of a term plan.
At the end it can be said that BSL Dream plan is good for people nearing their fifties and wanting to insure themselves for the next 25 years. The premium per annum would be as high as sixty thousand per annum but will provide you a cover of approximately fifty lakhs. Also, you application might not be considered on health grounds and you might have to also undergo a medical check-up.
A policyholder who is looking for returns on capital employed and also wants a cover can opt for BSL Dream plan, but one who is looking out for a cover for next 30 – 35 years and does is okay with not returns on premium invested can lookout for a term plan.
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