What is Term Insurance?
Term Insurance is a pure financial protection plan that covers the family’s need in case of the policyholder’s sad demise. In term insurance plan, the person nominated by the policy holder gets a lump sum amount as death benefit in case of unfortunate events. If the policyholder survives the insured period, they can avail extended coverage or have to let go of the coverage entirely.
Table of Contents
- Best Online Term Plans in India:
- Features of Term Insurance
- How to Choose a Term Insurance Plan
- Eligibility Criteria for Term Insurance:
- Documents Required for Term Insurance:
- Term Insurance Premium Calculator:
- Term Insurance Claim Process:
- Factors that affect term insurance Premium:
- How To Choose The Right tenure for Your Term Plan:
- Term Insurance FAQ’s
Why you should buy a term insurance policy?
Term insurance is generally overlooked in comparison to other insurance products. The main reason for this is the belief that term insurance plans do not offer significant returns or any additional benefits besides the Sum Assured on the policyholder’s demise.
However, there are several advantages of buying a term insurance policy. These include:
- Financial security - Term insurance plans are an excellent way to build a financial safety net. This is especially true in today’s world, as such a plan makes provision for the financial security of the policyholder’s dependents in the event of their demise.
- Basic insurance product - Instead of opting for a plan with a host of other add-ons and ending up paying a high premium, opt for a term insurance plan with a fixed, affordable premium for almost the same features.
- Greater returns - Term plans also fit everyone’s needs. A term insurance plan is one where the benefit received is much more than the sum invested, resulting in higher returns without the hassle of having to manage investment funds. Regular plans as well as TROP plans offer as much as 105% return on premiums paid as a benefit upon maturity.
- Sufficient coverage - Policyholder can choose the sum assured under term insurance policies so that it offers them with sufficient coverage. Financial advisors are of the opinion that sufficient cover is equal to 10 times your annual income. It should be noted that inadequate coverage defeats the purpose of being insured. Along the same lines, it is important that the policyholder reviews insurance cover and identifies areas where cost can be cut down, so that they you are not over-insured.
- Survival benefits - While a regular term insurance plan does not have any survival benefits, a number of insurers have designed plans, i.e., Term Return of Premium Plans (TROPs), that offer survival benefits in the form of premium refunds at maturity.
- Policy term - Term insurance plans offers the policyholder with a fixed term coverage. This indicates that they can take term insurance for a fixed duration wherein their family is financially protected. Following this, they can retire comfortably.
- Low claim rejection - Claim rejections are observed to be lower if a life insurance policy has been active for more than 10 years.
- Flexibility - Most term plans offer you the flexibility of buying the policy online or offline. In addition to this, many insurers do not insist on health check-ups if the sum assured under the plan is Rs.50 lakh or less.
- Riders - Term plans can be enhanced through the use of riders that offer extra protection. These riders can be bought from the insurance company at nominal costs. Some of the riders available under term plans are accidental death benefit, critical illness, partial or permanent disability, waiver of premium, etc.
- Low brokerage - In case policyholder opt opt for an offline term insurance policy, they will be paying the lowest amount as broker commission. Brokerage is usually calculated as a percentage of the premium paid. Since the premium for term insurance policies are usually low, the overhead of broker charges is also reduced. If they choose an online plan, there will be no broker fees as well.
- Flexible payment options - Term insurance policies offer flexible premium payment options, allowing policyholders to choose a payment plan based on their convenience. Premiums can be either limited pay, single pay or regular pay. Policyholders who choose limited or regular pay plans can pay their premiums either monthly, quarterly, half-yearly, or annually.
- Choice of plan - A number of insurers offer policyholders a choice when it comes to the type of plan they wish to opt for. Policyholders can choose between single or joint life plans, depending on their need. They can thus choose to extend coverage for dependent spouses or choose a plan exclusively for the breadwinner of the family.
- Tax benefits - Last, but not least, premiums paid towards a term plan is eligible for tax benefits under Section 80C of the Income Tax Act. The death benefit received by the nominee under the plan is eligible for tax deductions under Section 10(10D) as well.
Best Online Term Plans in India:
|Insurance providers||Term Plan||Claim Settlement Ratio||Maturity Age||Insurance Premium|
|Exide Life Term Insurance||Exide Life Elite Term||98.54%||70 years||Rs.451/month|
|Adity Birla Sun Life Term Insurance||ABSLI Life Shield Plan||98.02%||75 years||Rs.623/month|
|Bajaj Allianz Term Insurance||Smart Goal Protect||98.48%||85 years||Rs.616/month|
|SBI Life Term Insurance||eShield||94.5%||80 years||Rs.589/month|
|Reliance Nippon Life Term Insurance||Reliance Digi-Term||97.71%||75 years||Rs.623/month|
|Aegon Life Term Insurance||iTerm||98.01%||100 years||Rs.479/month|
|Canara HSBC OBC Life Term Insurance||iSelect+LumpSum||98.12%||99 years||Rs.480/month|
|Tata AIA Term Insurance||Tata Maha Raksha Supreme Lumpsum||98.02%||85 years||Rs.927/month|
|PNB Metlife Term Insurance||Mera Term Plan- full lumpsum payout||98.17%||65 years||Rs.500/month|
|Future Generali Term Insurance||Future Generali Flexi Online Term - Lumpsum||95.2%||75 years||Rs.486/month|
|India First Term Insurance||e-Term Plan||96.81%||65 years||Rs.422/month|
|HDFC Life Term Insurance||Life Option||98.01%||85 years||Rs.927/month|
|Edelweiss Tokio Term Insurance||Zindagi Plus + Lump Sum||97.0%||80 years||Rs.478/month|
|Aditya Birla Capital||DigiShield Plan||98%||73 years||Rs.612/month|
How does Term Insurance Work?
A term insurance policy can be considered one of the most traditional forms of insurance. Most of the term insurance plans have a premium that increases in small amounts over a period of time. This is to account for a reduction in the value for money as years pass by. It also covers the increase in mortality risk and the extra levies imposed for a longer coverage term.
To understand how it works, have a look at it in these three situations:
- Buying the policy:To be able to buy a term insurance policy you don’t need to put aside tens of thousands of rupees every year. Many of the insurance policies can offer you a sum assured of up to Rs. 1 crore for a premium that could be as little as about Rs. 10,000 per annum (These are indicative figures. The actual premiums may differ depending on the sum assured and the insurance providers).
- Keeping the policy:Just like any other insurance policy, you pay the premium towards these policies at a frequency chosen by you. These premiums can be paid every month, every quarter, every 6 months or once a year. They can also be paid as a lump sum instead of being paid at regular intervals.
- Redeeming the benefits:Term insurance plans don’t usually come with any maturity benefits. Term insurance plans don’t typically come with any maturity benefits, except for term insurance with. Their main objective is to provide life insurance cover and that is exactly what they do. In case the policy holder passes away, the person who is named as the beneficiary of the policy will receive the sum assured.
The way it works is also one reason why you will notice that a lot of the time insurers refer to these plans as pure protection plans. There are no frills attached to the plan. You pay the premium and you get a fixed sum if case something happens to you.
Points to note while buying term insurance policy:
Some important points to keep in mind while buying online term insurance are as follows:
- Premium may vary in the future - The online price quote you receive is provided on the basis of an assumption that you carry normal risk in terms of health, occupation, and your family’s medical history. After you submit all relevant documentation, the insurer may request you to undergo medical tests to arrive at the actual policy cost. In case the medical reports indicate that you are exposed to certain risks, the premium for your insurance may rise.
- Do not let the policy move into lapsed status - The act of buying an online insurance plan is certainly a smart move. However, you should not let the policy lapse by missing premium payments. Since there would be no insurance agent reminding you of the premium payment due date, it is easy to miss renewing the insurance. It is advisable to send an ECS mandate to your bank so that the premium amount is automatically deducted on the due date. Setting up an alert on your mobile phone or computer is also a great way to remind yourself of the payment date.
- Do not hide relevant facts while applying - If you are a smoker or use tobacco in any other form, your insurance premium will be 25%-30% higher than that of an individual who does not use tobacco. However, you should never hide this information in your application for insurance. At the time of a claim, if the insurer finds that the customer had concealed information, the claim will be rejected. The insurer may also cancel the policy, as applicable.
Your insurance policy is the backbone of your family’s financial security. So, you should not get into a situation where the insurer annuls the plan.
Key Features of Term Insurance Policy:
The key features of the term insurance policy are as follows:
|Death benefit||The nominee gets a lumpsum predefined amount in case of the policyholder’s unfortunate death|
|Liability coverage||Most of the term insurance policies today provide extensive coverage against various liabilities like loans, mortgage, etc.|
|Tax benefits||The policyholder can avail tax benefits against term insurance policy|
|Add-on covers||Most of the term insurance policies today provide rider benefits or additional covers like waiver or premium, extra payout on accidental disability/death, etc.|
|Maturity benefits||Policy holder can avail maturity benefits on policy with return of premium option|
|Multiple payment frequency options||Most of the term insurance plans these days give the policyholder multiple payment frequency options like single, half-yearly quarterly, etc.|
How to Choose a Term Insurance Plan:
The market is flooded with term insurance policy options, with varying policy terms, benefits and sum assured amounts. Navigating this maze of policies and making sure you choose the one that fits best and meets your requirements is a difficult task.
The following points should be kept in mind when looking for a term insurance plan:
When picking an insurance policy, it is always advisable to look at the insurance company’s reputation. This is important as a term insurance policy is a long term investment and as a policyholder, you should not be left in the lurch in the event the company shuts down or meets with any difficulties. Checking the company’s FICO score would be a good way to gauge its stability and reliability.
Claim Settlement Ratio:
The insurance company’s claim settlement ratio is an indicator of the number of claims settled out of every 100 claims received by the company. Insurance companies with a healthy claim settlement ratio are seen as more reliable and a better choice, as a higher settlement ratio is considered favourable. The IRDA publishes the claims settlement ratio for all insurance companies for a particular year.
Riders / Add-on covers:
The riders provided by the insurance company in addition to the regular policies are also to be considered. A policy that provides basic coverage and also offers additional benefits and riders is seen as a secure one, and insurers who provide a wide range of riders are considered a good option.
The amount you would be paying in terms of premium for the protection offered is a key factor in selecting a term insurance policy. Given that these policies can have a tenure of up to 20 years, the amount being paid annually as premium is a significant amount. Thus companies that offer reasonable protection for low premiums are preferred by policyholders.
When selecting a term insurance policy, take into account factors like inflation. Term insurance policies are usually taken for 10-20 years, during which time inflation will erode the value of the rupee, resulting in lower returns at the time of maturity. To offset this, consider companies that offer plans where the cover increases by 5% - 10% annually to keep in line with inflation.
It is advisable to compare insurance plans online so that you have a clear idea of the options available to you. The facility of policy comparison is offered by neutral third-party financial websites, free of cost. So, it is wise to make use of this facility as much as possible.
Engage an insurance advisor:
In case you feel that you are unable to decide on a plan by yourself you can always seek the assistance of an insurance advisor for the same. This way you can be assured of expert insurance advice/suggestions that would enable you to pick the right policy.
Policy terms and conditions:
It is vital that you read the terms and conditions within the policy document thoroughly before signing the dotted line. This enables you to understand the minute details pertaining to the inclusions and exclusions under the plan, so that there is no confusions in the future.
Eligibility Criteria for Term Insurance:
Before anyone can take a life insurance policy, they will have to meet certain eligibility criteria which can be:
- The minimum age of the policyholder will have to be 18 years old when taking the plan.
- The maximum entry age will depend on the minimum tenure of the policy.
- The maximum age at the time of maturity for these policies can be 75 years but this could change from one insurer to the next.
- The minimum age for maturity will be determined based on the minimum age at entry and the minimum tenure offered.
- The sum assured will also be a factor in calculating the eligibility as many policies have a fixed minimum sum assured.
- This may not be mandatory but some insurers may ask the policyholder to undergo a medical check-up prior to taking the policy.
Documents Required for Term Insurance:
All insurance companies mandate that the policyholder submits a set of relevant documents while applying for term insurance. Document requirements may differ from insurer to insurer.
Following is the list of documents that the policyholder will have to provide when taking a term insurance plan.
- PAN card
- Proof of identity using documents like passport, Voter ID card, Aadhaar card, driving licence, letter from a public servant or authority verifying identity.
- Proof of age with documents like passport, birth certificate, driving licence, PAN card, etc.
- Proof of address with documents like utility bills (electricity, telephone), ration card, bank account statement, Voter ID card, or passport.
- Proof of income with documents like Income tax returns, employer’s certificate, or Income Tax assessment order.
- Some recently clicked passport sized photos.
Term Insurance Premium Calculator:
Insurance companies providing term insurance are often fielded with questions regarding the premium to be paid for a particular policy. As the premium amount is integral to selecting a policy, a number of companies have a premium calculator on their websites which allows policyholders to calculate the premium they would be paying for particular policies. The premium calculator facility is available to all individuals who wish to calculate an estimate of the premium to be paid.
The premium calculator for most insurance companies requires you to input details such as your gender, date of birth and mention if you are a smoker or non-smoker. The coverage amount required (depending on your needs) is to be entered as well.
On doing so, the premium amount to be paid will be displayed on screen. The premium amount would be calculated based on the maximum policy term offered by the insurer.
Any additional benefits included as part of the policy would be displayed below the premium amount payable. Some insurers provide an estimate based on the insurance plan selected, and will provide the premium amount based on the type of plan and coverage it offers. The premium calculator is an excellent way for individuals to check their premium contribution if they wish to opt for a particular term insurance policy.
Exclusions for Term Insurance Plans:
Term insurance plans cover a list of specific events and circumstances. Depending on the type of plan selected, this could be an exhaustive list. However, there are some exclusions that term insurance policies do not provide coverage for. Given below is a list of exclusions:
- Suicide: Suicide is an exclusion in all term insurance policies. Insurers will not pay dependents in the event of the policyholder committing suicide within a year of purchasing the policy. In the case of group insurance, suicide will not be liable for compensation as well.
- Death due to war, terrorism drought: Death due to natural calamities and acts of war are not covered under a term insurance plan.
- Death due to actions by the insured: Accidental death brought on by the actions of the policyholder (such as extreme sports etc.) are not covered as these are viewed as self-imposed risks by the policyholder.
- Death due to intoxication or narcotics: If the policyholder’s death was brought about by or as a result of consumption of alcohol or narcotic substances, the insurance company is not liable to compensate dependents.
Term Insurance Claim Process:
In case the life assured policyholder passes away, their dependents will be required to file a claim in order to receive the amount which the insurer has assured to pay on such an event. The claim process is usually quite simple and easy to follow in most cases. Given below is a step-by-step guide to file your claim for a term insurance policy:
Step 1 – Inform the Insurer About The Claim:
The initial step to filing a claim involves intimating your insurance company regarding the claim. To do this, you must contact your insurance provider via any available channel i.e. via phone, email or by visiting the branch. Only when you have informed the insurer about the claim will the claim settlement process be initiated.
Step 2 – Submit Required Documents:
Once you have informed the insurer about the claim, you will be required to submit the necessary documents to support your claim. Documents usually required for supporting a claim include the original insurance policy document, proof towards the claim, deceased life assured’s death certificate and medical records, apart from some other documents. Some insurers may also ask you to submit additional documents to further verify the claim.
Step 3 – Claim Settlement and Payout:
The final step in the claim process is the decision regarding the claim and subsequent settlement. After the required documents have been provided to the insurer, the claims department will verify the documents and the claim before taking the decision on the settlement. The insurance company may honour the claim if everything is in order or may deny it if there is any discrepancy in the claim and proof provided for it.
Term Insurance Renewal Process
When your term insurance policy is about to expire, make sure you get it renewed on time. Term insurance policies can now be easily renewed online with just a few clicks. Here are the basic steps involved in the renewal process. This process may be different for different insurers.
Review your policy: The first step of the renewal process of to review the existing insurance policy that you have. This will give you a chance to review the cover and discounts that your policy provides and make any changes as are necessary. Since many of us may not use our insurance cover for a long time, it is wise to make changes to your cover with time as your priorities change.
Provide policy details : Visit the insurance provider’s websit and click on the policy renewal tab. Once you click on the tab, you will be asked to provide your policy details such as the policy number, date of birth, name, etc. after this step, you will be asked to confirm the details you have just provided.
Make the payment: The last step of the renewal process is to make the payment on the policy. Nowadays, one can make the payment for policy renewal online via a number of channels such as by cheque, by credit card/debit card, vi an ATM, via SMS, via online banking, via mobile wallets, bank auto-debit facility, bank collection centres, or at the branch office itself.
Factors that affect term insurance Premium:
When it comes to term insurance, there are several factors which affect the premiums which the insurer quotes on your policy. These factors are:
- Age:Your age plays a major role in the premium you pay on your policy. The younger you are, the lower your premiums are likely to be and the older you are, the higher your premiums will be. It is always advised to purchase a life insurance policy when you are young.
- Your family’s medical history:If your family has a medical history of any critical or life-threatening illness/condition like cancer, diabetes, etc., then you will be considered a higher risk as compared to someone who does not have a family history of any major life-threatening disease/condition. A high-risk applicant will be charged higher premiums automatically.
- Your health:Insurers will also look at the state of your health at the time you apply for the policy and also in the past. If you have been suffering from any chronic illness in the past or your current medical condition indicates any future health issues like high blood pressure, your policy premium rates might be affected. Applicants who are generally healthy often have to pay lower premiums in comparison.
- Weight:People who are obese or overweight on the weight to height ratio scale may be asked to shell out more in terms of policy premiums as they carry greater chances of medical issues in the future.
- Smokers:It is commonly advertised by insurance providers that non-smokers are eligible for special discounted premium rates on policies as compared to smokers. This is because smokers may be at a higher risk of cancer or other smoking related health hazards as compared to a non-smoker.
- Alcohol consumption:Like smoking, alcohol consumption can also lead to health problems. Which is why insurers will enquire about your lifestyle habits during application as heavy alcohol consumption is linked to several health complications, increasing the applicant’s risk.
- Lifestyle habits:Those who often indulge in high-risk activities for leisure such as skydiving, bungee jumping, paragliding, hang-gliding or any other form of adventure sporting activity are seen as high-risk applicants and may be required to pay higher premiums. However, there are several insurers who have designed policies specially covering these high-adrenaline activities.
- Applicant’s gender:Insurance providers often advertise lower premium rates for women applicants as compared to men. This may be due to the fact that women usually have longer lifespans as compared to men.
How To Choose The Right tenure for Your Term Plan:
One of the main reason why term plans are preferred over other types of insurance plans is because it provides cover at affordable prices for a duration that the customer needs. However, when it comes to term insurance, how does one decide the term for which the plan should be taken? The right duration for a term plan will differ from individual to individual, depending on their unique financial situation. When deciding the term of a term insurance plan, you must consider the financial liabilities which your family may have to face if you pass away and how long it would take for those liabilities to be paid off. Some of the factors you must consider when choosing the term of your term plan are:
Liabilities can come in many forms, such as loans or mortgages and must be paid in or before time to avoid penalty. When you choose the term for your term insurance, it is advisable to consider the time it would be required to pay off such liabilities. For instance, if you have a home loan which will be fully repaid in a period of 20 years, then your policy term must be a minimum of 20 years.
Commitments or Dependents
If you have dependents like young children who are financially dependent on you, the term of your plan must ideally be the duration (no. of years) till your can children support themselves. You must also take into account milestone life events like weddings, or starting a career when deciding the term of your policy. Ideally these events must fall within the term of the policy so that in case you may not be around to financially provide for your family, their needs are still taken care of.
Long term plans are significantly more expensive than short term insurance plans. When choosing the term for your plan, you must first consider whether you are financially comfortable paying the premiums over a longer period of time or not. Long term plans provide cover for a longer duration but are more expensive. Short term plans are relatively more affordable and also provide cover for a sizeable number of years.
Whole Life vs Term Insurance:
When one talks of term insurance, the immediate other option which pops in one’s mind is whole life insurance. Term insurance is a specific type of life insurance where the life assured pays premiums towards the policy for a fixed pre-specified term. In case of death of the life assured before the term of the policy, their beneficiary will receive the death benefit. Term insurance policies are also categorized as pure life insurance policies as they only offer protection.
Whole life policies, on the other hand, are full life insurance policies where the cover of the policy extends until the death of the life assured. The premiums for such policies are paid either for a limited period of the policy term or for the life insured's entire life time. Whole life policies also provide survival benefits and maturity benefits, in addition to the death benefit. These policies may sometimes also offer premium investment options.
|Whole Life Policies||Tem Insurance Policies|
|Premiums||Premiums are higher as compared to term life policies.||Premiums are significantly lower as compared to those of whole life policies.|
|Coverage period||Whole life policies provide cover for entire life||Term life policies provide cover only for a specified period of time such as 30 years.|
|Investment options||Whole life policies also offer investment options within the policy for enhancement of savings.||Term life policies do not offer investment elements.|
|Benefits provided||Whole life policies normally provide survival benefit and maturity benefit in addition to the death benefit.||Term life policies normally only provide a death benefit.|
Term Plan Vs Endowment Policy Vs ULIP:
There are a lot of life insurance products that are available to customers and they can range from a term plan to an endowment plan to a ULIP. So the question really is how term insurance stacks up against ULIPs and
|Term Insurance||Endowment Plans||ULIPs|
|Premium (for Rs. 1 crore)||Approx Rs. 9,000||Approximately Rs. 60,000||NA|
|Max sum assured||No limit||No limit||Depends on fund value|
|Premium payment||Offers single pay, monthly, quarterly, half-yearly, yearly and limited pay options||Offers single pay, monthly, quarterly, half-yearly, yearly and limited pay options||Offers single pay, monthly, quarterly, half-yearly, yearly and limited pay options|
|Maturity benefits||None unless it’s a TROP||Does offer maturity benefits||Maturity benefits linked to market investments|
|Risks||No risks||No risks||Has risks since the premium is invested in the equity and debt markets|
The interpretations that we can draw from the table are:
For a sum assured of Rs.1 crore, the premium for a term plan is about Rs.9,000 whereas for endowment plans, it is much more and ULIPS don’t always offer a fixed sum assured.
The premium payment options are the same for all the insurance plans.
While ULIPS come with an inherent risk due to investments made in equity and debt markets, term insurance plans are quite safe.
If you opt for a term insurance with a return of premium option then when the policy matures, you stand to get 100% of your premiums back.
Term Insurance FAQ’s
What assurance does a policyholder have that their beneficiaries will not face issues at the time of raising a claim?
To safeguard the interests of the policyholders, Section 45 of the Insurance Act governs that it is illegal for a life insurance provider to reject or deny a claim 3 years after the issue of the policy. However, to ensure that your loved ones do not face any grief from the hands of the insurer, it is important for them to be generally aware of the claim process. It is also important for you, as the policyholder and insured, to take care while filling up the policy proposal form and provide only correct information. Also, if your insurer requires you to undergo a medical exam, it will help lower the chances of rejection as your health status will be known to the insurer at the time of offering coverage. When appointing a nominee/beneficiary for your policy, make sure that the appointed person has full knowledge about it.
What are the services included in long-term care insurance?
There is a range of services that long-term care insurance offers. These include home-based services such as health care at home, companion/friendly visitor services, and so on. Long-term care insurance also provides facility-based care which includes assisted living facilities, adult foster care, nursing homes, and so on. It also provides community-based services to its customers which include adult day service programs, meals programmes, transportation services, and so on.
Is long-term care insurance coverage included in a comprehensive health plan?
No. A typical health insurance policy will offer you protection for hospitalisation or surgery, although it will not cover extended healthcare services. If you want to receive healthcare services and benefits for a prolonged period of time, it is advisable to purchase a long-term care insurance policy.
What is the tenure of a long-term care insurance policy?
Long-term care insurance coverage can be for a long time or a short span of time, depending on what the insured individual needs. If it is short-term care, the cover will typically last for a few weeks or months. Short-term care is suitable for people who are recovering from an illness or injury that has occurred suddenly. In case of long-term care, a person gets associated with the insurance cover for a long period of time. This type is suitable for people who have illnesses such as Alzheimer’s or disability caused by a stroke.
What is the suitable age group for purchasing a long-term insurance policy?
A long-term care insurance policy should be purchased between the age groups of 55 and 64 years. This is because an individual will need long-term care insurance cover when he/she gets older.
How reasonable are the premiums in a long-term care insurance policy?
The premiums in such a policy are determined by the individual’s gender, age, and health condition. The case is the same as any other life insurance policy. The earlier you purchase the policy, the lower will be your premium amount.
Is there a need for long-term care insurance in India?
Yes. This is because more than 70% of the people who are more than 65 years old need some sort of assistance and care in their old age. Other than that, nearly 40% of the people need some sort of a long-term caregiver or a nursing home for a certain period of time. This makes owning a long-term insurance policy important.
What is the purpose of an emergency response system and how does it work?
Through electronic monitors, any medical emergency can easily be detected and responded to. The user usually has a bracelet which has a button that can be pushed during cases of emergency. Once the button is pushed, the individual receives help or assistance immediately after. This kind of a system is typically meant for people who are old and are living alone and are at higher risk.
Is long-term care important for a person who is relatively healthier than his/her peers?
Yes. Life is uncertain and in order to deal with the unpredictable situations of life, one needs to be prepared financially. Long-term care will prove to be beneficial once you are a senior citizen and need some sort of healthcare service on a long-term basis.
How can I get more information about the services offered in long-term care insurance policies?
Select the insurance company you want to purchase the policy from. Read the terms and conditions thoroughly before you make the purchase. You can also compare multiple insurance companies online before determining who to buy from.
Is term insurance a good idea?
Long-term care insurance is provided by a lot of insurers in the world. Their services are directed towards catering to the needs of individuals over a short or extended period of time. These services are provided to help make the person more independent and safer at a time when they are less able to cater to their own needs.
Which is the best term insurance policy?
LIC’s e-term plan, Max Life Online Term plan, PNB Metlife Mera Term Plan, and ICICI Prudential iProtect Smart Plan are some of the best term insurance policies available in the market.
How much does term insurance cost?
The premium rates for term insurance plans depend on your age, gender, income, and even your smoking habits. Based on these factors, the prices differ from one applicant to another. For instance, for a 26-year-old male applicant who smokes with an annual salary of Rs.7 lakh, the premium price for a sum assured of Rs.1 crore is Rs.933 per month.
Is natural death covered in term insurance?
Yes, natural death is covered under term insurance policies.
What is terminal illness in term insurance?
Terminal illness in term insurance refers to any critical illness that may lead to death. Death caused by terminal illness is covered under term insurance policies. However, diseases that are detected in the waiting period or before the beginning of the policy period are covered.
Does Term life insurance cover accidental death?
Yes, term life insurance plans cover accidental death.
What is long-term care insurance?
Term insurance plans are one of the most essential insurance policies that you must invest in. With term plans you can avail a high sum assured amount with affordable premium rates. You can opt for term life plans if you are already saving systematically for your future financial goals.
Will every insurance company offer the riders?
No. The riders are offered at the desecration of the insurance providers so they can differ from one provider to the next.
Can I take more than 1 term insurance plans?
Yes, you can take more than 1 term insurance plans.
What if I want a sum assured that is in excess of Rs. 10 crore?
In case the sum assured is really high, the decision to provide the policy will rest with the insurer and the policy issued only if the insurer is willing to insure for such high amounts.
Are there any situations under which the claims won’t be honoured?
Yes. If your claim falls under any of the exclusions mentioned in the policy, the claim won’t be honoured.
What are some of the exclusions?
The exclusions can include indulgence in activities that are illegal. They also include participating in activities that are known to be dangerous, example extreme sports. In the case of the policyholder committing suicide within the first year, only the premium paid may be returned.
What is the benefit that I get for health lifestyles?
The main benefit that insurers offer for healthy lifestyles is a discount on the premiums payable.
Can I take a term insurance plan if I am an NRI?
Yes. If you are an NRI then you can still take term insurance cover.
Does term insurance have a free-look period?
Yes. Term insurance has a free-look period of 15 days, from the day you receive the policy document, within which you can surrender the policy in case you are not satisfied with it and get the premium refunded. There may be some deductions involved.
Do I have to pay penalties if my payment is late but within the grace period?
Late payment policies may differ from one company to the other but generally if payments are made within the grace period then no interest is charged on the payment.
What is accidental death benefit?
Accidental death benefit is a rider or add-on to term insurance policies by which the dependent will receive a pre-determined amount of money in the event of the policyholder’s death due to an accident.
What is the age limit for a term insurance policy?
Different insurers and plans have different age limits for term insurance policies, with the limit ranging from 55 years to 70 years.
What is term insurance with monthly income?
A.In such cases, the Sum Assured is decided on the policyholder’s monthly income after taxes. The death benefit paid out is 12 times the monthly income, inflated at 5% annually throughout the term of the policy.
Can I alter the duration of the coverage after the policy has been issued?
No, it is not possible to change the duration of the coverage after the policy has been issued. However, some policies allow for extensions in the coverage period.
What is the maximum tenure for a term insurance plan?
The maximum tenure for a term insurance plan depends on the insurance company and the type of plan opted for. The maximum tenure available is 40 years.
I smoke occasionally. Will I have to declare myself a smoker at the time of applying for the policy?
If you have smoked in the last 12 months, you are required to declare yourself a smoker at the time of applying for a term insurance policy. If you do not and the insurer is made aware of this, you could risk losing your policy benefits.
How do I cancel my insurance policy?
In most cases, Cancelling your insurance policy can be done by notifying the insurer within 15 days of the policy being issued.
Can I switch my term insurance plan to another insurance provider during the policy term?
No, you cannot switch your term insurance policy to another provider during the policy term.
Can the dependent/nominee re-apply for a claim if it was rejected once?
Yes, the nominee/dependent can re-apply for a claim if it was rejected before, and can approach the insurer’s grievance redressal cell if necessary.
What is a term insurance policy?
Term insurances are the most inexpensive way of availing insurance coverage for a specific period of time. It is merely a risk cover and does not provide any benefits on survival.
Should I opt for a term insurance plan even if my employer provides an insurance coverage?
Yes, it is advisable that you choose a term insurance plan even when your employer provides you an insurance coverage. This is because the insurance cover offered by your employer expires once you change the job.
What are the documents required for buying term insurance plans?
The following documents are needed for buying term insurance plans:
- Proof of age
- Proof of residence
- Photo identity proof
- Salary proof
What are the maturity benefits offered under term insurance plans?
Except for TROP plans, term insurance plans do not offer maturity benefits. The sum assured is offered to the beneficiary only in case of death of the person insured.
Can I get loan on term insurance plans?
No, policyholders are not eligible for loans as the policy doesn’t come with maturity benefits nor does it attain surrender value.
What happens when I change my country of residence a few years after choosing the plan?
The term insurance plan will continue to be active even when you relocate from India. However, make sure that you keep your insurer informed about such a change.
Is there any advantage in buying a term insurance plan at a young age?
Generally term insurance plans are available at lower prices for people who in an early stage of their life. Therefore, buying a term plan at a young age is definitely beneficial.
What are the factors which influence term plan premiums?
Term insurance premiums are affected by a number of factors such as the applicant’s age, family’s medical history, own health, weight, lifestyle habits like smoking, alcohol consumption, gender, etc.
Can I buy term insurance online?
Yes, many insurers have an online presence and offer customers the facility to not only purchase, but also renew their term insurance policies online.
How do I purchase insurance online?
To purchase insurance online, you will have to visit your preferred insurer's website, and input details like your sum assured, term, premium payment term, etc. You can use the premium calculator to find out the premiums that you will be expected to pay. Once you have arrived at a premium that is you are comfortable with, proceed to make the payment. After you have done that, you will receive an acknowledgement of the payment. The underwriting and approval process will take 3 or more days, post which the insurer will get back to you with their decision.
Is surrender value a part of term insurance plans?
Surrender value is essentially the amount of money which an insured policyholder is entitled to receive if they discontinue their life insurance plan before it expires. Certain charges are usually deducted from the final surrender value that is payable to the insured. In case of term plans, the concept of surrender value is usually applicable for term plans with return of premium (TROP). Also, term insurance plans which allow single premium payment or limited premium payment options also may offer surrender value. Regular pay term plans will not offer surrender value.
Are terrorist attacks covered under term insurance plans?
Yes, term plans will usually provide cover against death caused following a terrorist attack. However, the extent of this coverage may differ from insurer to insurer. Check with your insurer regarding this kind of specific coverage.
Can one insure their children/spouse instead of themselves?
The way term plans work is to help an individual insure themselves under an individual plan. If they want to insure their spouse or children, they will have to buy individual term plans in their spouse or child’s name.
Is it possible to change a nominee after the policy document has been drafted and the policy is in force?
Yes, term insurance policies do include the provision of allowing the insured to change the nominee after the policy document has been drafted. This is especially required in situations wherein the insured may not be married at the time of purchasing the policy, in which case his/her parents are usually named as nominees. If the person gets married after purchasing the policy and wants to add their spouse as the nominee, they can either change the nominee under the policy altogether, or make the spouse an additional nominee
Is it possible for an individual to take multiple policies in order to split up their total coverage amount?
Yes, one can split up their desired amount of coverage by purchasing multiple policies. This can be done especially in cases where you have differing needs which can be taken care of by different types of insurance policies. However, doing so is not always recommended.
Will a term plan pay the death benefit if death has occurred within a year of plan commencement?
Settlement of the death benefit will be done based on the insurer’s terms and conditions. However, most insurers will pay the death benefit under a term plan even if the death has occurred before the policy has completed a year, starting from the date of coverage commencement.
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Term Insurance Related Articles:
Term Insurance With Return of Premium Plan (TROP)
When we talk of term insurance, most people remain under the impression that term plans do not offer any survival benefit, maturity benefit, or return of premiums. Term plans are considered to be the purest form of life insurance which only offer death benefit in case the policyholder passes away before the end of the policy term. However, not many people are aware that there are also term plans available in the market which provide a return of premiums paid.
These type of term plans are known as Return of Premium Plans which offer you not only affordable protection against uncertainties but also return your premiums after the term of the plan is over. In this article, we discuss more about Term plans which offer return of premiums, the survival benefits offered under such plans, benefits which one an get from opting for such a plan, and a short guide on how to choose the best return of premium term plan. You will also get to read about some of the top return of premium term plans that are available in the market currently.
20 year Term Life Insurance Policies in India
Unpredictability is a part of life. However, life insurance is a wise way to prepare and protect your loved ones against the adverse of an unpredictable event. Among life insurance plans, term plans have been the most popular for a long time, owing to their affordability and benefits.
Term plans are available for varied durations and here, we will discuss about 20-year term insurance plans. Read on to know more about the various benefits offered by such term plans, who they are ideal for, how they work, and some of the top 20-year term plans that are available in India.
10 year Term Life Insurance Policy
Life insurance is now a very important part of everyone’s life. As life becomes more and more unpredictable, life insurance has become a smart way to ensure that our dependents are financially protected from any uncertainty that life might bring. Under life insurance, term plans continue to be one of the most popular option because of the variety of benefits they offer.
Term plans are available in a variety of tenures which is fixed for a certain number of years. In this article, we are going to throw some light on 10-year term insurance plans. You can find out about why such term plans are beneficial, who they are better suited for, how they work and also read about the top 10-year term plans that are currently available in India.
5 Year Term Life Insurance Policy in India
With the unpredictability that surrounds us, life insurance has become an absolute must-have. Without an insurance policy, the loss of income can have an adverse impact on your dependents’ lives. Term insurance, as we all know, is one of the most preferred and affordable types of life insurance which one can get to protect their dependents.
There are various durations for which a term plan can be taken, but here, we talk specifically about 5-year term plans that are available in India. You can read about the various benefits offered by such term plans, who they are ideal for, how they work, and some of the top 5-year term plans that are available in India.