Term insurance is a type of life insurance policy, which offers financial coverage to your family in case of your death, disease or disability. It is one of the few investment options in the market that offer a high sum assured at very low premiums.
With the frequency of accidents and diseases increasing per day, your plan of living a long life may seem far fetched. That means, if you die, your family must have a financial backup to take care of their needs. That's why investment experts in the industry suggest investing in a term insurance plan and that too at a young age. Term insurance will help your family to live a stable life even after your demise. It will provide much needed financial support to meet their daily expenses and fulfil their long-term goals as well.
|Sr. No.||Company Name||Term Insurance Plans||Entry Age (years)||Minimum Sum Assured (Rs.)||Claim Settlement Ratio 2018-19*|
|1.||ICICI Prudential||ICICI Prudential iProtect Smart Lump sum Term Plan||18-65||Subject to minimum premium||98.58%|
|2.||Max Life||Max Life Online Term Plan Plus||18-60||25 Lakhs||98.74%|
|3.||HDFC Life||HDFC Click 2 Protect 3D Plus Term Plan||18,25-65||10,000||99.04%|
|4.||LIC||LIC Tech Term||18-65||50 Lakhs||97.79%|
*We have also prepared a list of the top 6 term insurance plans in India 2020.
It is the simplest plan of the lot. Here you will see zero change in the sum assured (through the policy) and the nominee will reap the benefits once the insured is dead.
The best part of the TROP plan is it assures maturity benefits. This policy turns out to be beneficial if the insured survives after the term of the policy.
Here the sum assured will increase every year. This plan is launched keeping in mind the growing rate of inflation.
Here the sum assured will decrease with time. This plan is usually issued by banks to recover the loan.
Convertible plans enable many add-ons on the existing Term Insurance plan that you may have. You can choose any plan as suitable. It can be a market-linked plan as well. This is a good way of covering life risks along with returns.
You will get a few rider options such as a premium waiver, accidental death cover etc. which you can avail with your term insurance policy on paying an extra premium. A brief explanation of such riders is given below-
Critical illness riders cover many illnesses that are deadly in nature. You can buy this rider if you are prone to any such illness. Before taking the rider, you can always check the additional cost and decide accordingly.
If this rider is taken, then accidental death is covered. The insurance company will offer the sum assured along with the rider benefit to the nominee of the policyholder.
Here complete cashless treatment is provided at the time of any illness.
As per this rider, all the future premiums are waived off if the policyholder is disabled, critically ill or dead.
The majority of the insurers will offer the coverage till 75 years (as it is the average age of a person). There are a few life insurance companies which provide coverage for 100 years as well. So, if you buy a term plan at an early age, you and your family can enjoy its benefits for a long time.
Free Lookup Period
At times, you may not be sure about the policy. It happens when you buy term insurance in a hurry. As a result, many people make the wrong decisions. All insurance companies allow a grace period of 15-30 days to change your decision. If you are unhappy with the policy, you can return the original policy documents (in that duration) to cancel the policy.
Ease of Payments
When it comes to payment, you can always choose the premium payment mode according to your convenience. You can pay monthly, quarterly, half-yearly or annually. Many people prefer to pay the amount of term Insurance monthly as it comes at a very nominal price. Payments can be easily made online. You can do it either through NEFT, Net banking, IMPS, or wallet banking.
Yes, this is an additional benefit of investing in a term insurance plan. On buying a Term Insurance policy, you will be liable to get tax benefits as per Section 80C of the Income Tax Act, 1961.
Maximum Gain with Small Investment
Term Insurance plans are available at a very nominal amount. It may be as low as some hundreds or thousands per month. As compared to that, the sum assured can be in lakhs and crores (depending on the customization of policy options).
There are two channels from where you can buy Term Insurance plans- offline and online. You can physically visit the branch office of your selected provider to purchase your policy or you can approach the most convenient online channel- PolicyX.com. We provide a customized portfolio as per your needs and requirements. We have a dedicated team to assist you with all your queries. From documentation to any other further assistance, they are always on their toes to serve you in the best possible way.
Fast Delivery: As soon as you enter the required details and make the payment, you will get the policy documents in your Inbox.
Online Availability: Yes, you don't have to beg your insurance provider and wait for days to get your hands on the duplicate copy of your policy documents. Thanks to digitalization, you can access your details and documents with a click of a button. For example, if you have bought a term plan from PolicyX.com, you can check your details by logging into your account.
Automated Results: You don't have to browse the internet like a crazy person to get the details of the policy. From comparing several insurance providers to premium calculation, everything is done on a single web page.
Less Premium: Since there are no middlemen involved in the entire process, the cost of online term plans is less. Many other overhead costs such as the cost of office, commission to the middlemen and distribution channels, etc are saved as well.
Reminders: Not everyone is blessed with a good memory. That's why we prefer to have a 'reminder system' onboard. If you are a customer of PolicyX.com, you will get regular reminders to renew your term insurance policy to avoid lapsation.
The Central Government of India offers certain term insurance schemes, by way of which policyholders can safeguard their dependents financially. Let's have a look at them.
The Pradhan Mantri Jeevan Jyoti Bima Yojana is a life insurance policy that can be renewed on an annual basis by policyholders.
The Aam Aadmi Bima Yojana was formed as a merger of two social security schemes, namely the Aam Aadmi Bima Yojana and the Janashree Bima Yojana, which previously existed.
The basic idea of term insurance is to offer financial coverage to the claimant in return for a premium amount, which is directly linked with the age of the policyholder. That means, the older you opt for a term plan, the higher premium you have to pay. Let's understand this statement with the help of an example.
Mayank (30 years old) is planning to buy a term insurance plan with the coverage of Rs.1 crore (till 65 years of age).
|Age||Maturity Age||Policy Term||Annual Premium (Rs.)*|
|30 years||65 years||35 years||9,363|
|35 years||70 years||35 years||13,139|
|40 years||75 years||35 years||19,056|
*This premium is provided by ICICI Prudential.
As per the above table, it is safe to say that Mayank should consider buying a term plan at 30 years of age as he would have to shell out less premium. If he buys term insurance at the age of 35/40 years, he will have to pay extra premium.
PolicyX.com has designed a simple process to buy term insurance. Here are the steps-
Just like every other thing in the market, term insurance comes with a (*) sign- exclusions. Let's view it.
After you decide to purchase term insurance, the next question that comes in your mind is- how much coverage is sufficient for you? If we listen to the industry experts, a term cover must be 15-20 times of your annual income. For example, if your annual income is Rs.5 lakhs, your choice of minimum cover should be Rs.75 lakhs-1 crore.
In case of the demise of the policyholder, the nominee should inform the insurance company and share the required documents with them. Documents will vary in different scenarios and they are bifurcated below-
In such cases, the legal heir of the claimant becomes the beneficiary. The legal heir can get the benefits only after attaining the age of 18. But his guardian must immediately inform the insurance company. The age criteria may depend completely on the provisions of the insurance companies or IRDA.
When a nominee dies before the policyholder, it's the responsibility of the insured to nominate other beneficiaries. This can be done either online or by informing the customer care.
Note: Once the insurance provider accepts the claim, it will release the pay-out. If the claim is rejected, the reasons for the same will be communicated to the claimant.
In India, normally all existing life insurance policyholders are covered under term insurance. While a few life insurance policies have exclusions for a specific cause of death, coronavirus will be covered if you already have an existing life insurance policy. However, it is advisable to pay attention to the guidelines of life insurance and add-on plans, whose benefit will be paid if the claim is approved by the insurance company.
For all the new applications of term insurance during COVID times, insurance companies will calculate the premium of the policy based on medical history and the health of the customers. Hence, the pandemic may have an impact on the term insurance premium and the acceptance of the policy as well.
It is important to keep in mind that if the buyer's application is in process and (s)he gets diagnosed with COVID, then the company might reject or hold the policy. The buyer should make sure that (s)he is sharing all the information with the insurer whether it is related to COVID or not. This will prove to be useful at the time of filing a claim.
Note: The claim process varies from insurer to insurer. You must check with your provider about the same as many companies have started claim services over WhatsApp as well.
1. What is the minimum age and income to buy term insurance?
To invest in a term insurance plan, the minimum age should be 18 years and the minimum income should be 2 Lakhs.
2. What is the difference between term insurance and life insurance?
Life insurance includes maturity benefits, whereas term insurance offers no such benefits.
3. How much tax will I save by buying term insurance?
Under Section 80C of the Income Tax Act, 1961, you can avail deductions up to Rs. 1.5 lakhs.
4. I occasionally smoke with my friends. Do I need to disclose this information while buying term insurance?
If you have smoked in the past 12 months, you have to disclose it to your insurance provider. If you don't disclose it right away and reveal it later, you may be charged with a high premium or your provider may cancel your policy (denying any benefits).
5. I have diabetes. Can I get myself insured under term insurance?
If your diabetes is in control (with regular treatment and a healthy lifestyle), you will be eligible to buy term insurance. However, if you have additional risks like hypertension, heart illness etc, your application can be rejected.
6. Whom shall I contact if my claim is rejected?
Even after submitting all the documents and adhering to the policy document, if the claim is rejected, you need to get in touch with the Ombudsman. (S)he will tell you the reason(s) for rejection.
7. Can I add a rider to my existing term insurance plan?
Yes, you can easily purchase rider(s) from your insurance providers at nominal costs.
8. Are your agents qualified enough to handle my queries?
Yes, PolicyX.com is IRDA certified (WBA 17/14) and our agents go through the best training at hand to serve you better. To know more, please speak to our customer care team on 1800-4200-269.
9. Will my premium amount change during the policy tenure?
No, it will remain the same.
10. I'm unable to find my policy document. How can I get its duplicate copy?
You have to submit an application along with indemnity bonds and fees to get a duplicate copy of your policy.
11. Can an NRI buy term insurance?
Yes, insurance companies offer term insurance plans, which are specially designed to fulfil the needs of NRIs.
12. If I die due to a natural calamity/disaster, will my family/nominee receive the sum assured?
No. Deaths under 'Act Of God' are not covered by term insurance policies.
13. If I die outside the Indian territory, will it be taken into consideration?
Yes. Once the policy is in effect, your death (irrespective of the place) will be taken into consideration.
14. Can I switch my term policy from one provider to another?
No, that's not possible.
15. Can I cancel my term insurance policy?
Yes, you will be given 15 days (generally called a free-look period) to cancel your policy without penalties.
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Page Last updated on 18-09-2020