Life can change tracks any minute, hurling us to a new destination, a destination for which we might often be unprepared. A term life insurance policy can help us prepare for such changes, allowing us to continue with our lives regardless of how things change. A 20 year term insurance policy offers protection for 2 decades, acting as a safety net that offers comfort in an ever changing world.
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Features and Benefits of 20 Year Term Life Insurance Policy
Some of the features and benefits of a 20 year term life insurance policy are mentioned below.
Extended cover Policyholders are covered for a period of 20 years, ensuring they can continue their normal lifestyle without having to worry about themselves during this period.
Death benefit In the event of unfortunate demise of a policyholder during the term period, his/her nominee will receive a death benefit. This death benefit depends on the premium paid and is traditionally higher than regular life insurance policies.
Income Tax benefit Individuals are entitled to income tax benefits under Section 80C of the Income Tax Act, helping them save tax.
Surrender benefit Policyholders can get surrender benefits if they choose to surrender their policies before maturity.
Additional riders A policyholder can customise his/her policy by adding additional riders, enhancing overall protection.
Low premiums The premium for 20 year policies is generally lower compared to other short term periods. These premiums can be paid without burdening a policyholder.
Premium paying modes Most providers offer flexible premium payment terms to policyholders.
Loans Certain insurance providers offer loans against term life insurance policies.
Note These features and benefits might vary depending on the service provider and it is recommended to check with the provider first.
Who is this plan suited for
Individuals who wish to spend the next 20 years of their life without tension should opt for this plan. It is ideal for those who might retire during this period or those who are expecting certain changes in their lifestyle during this period. Individuals with marriage/educational commitments of their children can opt for this plan, given the great benefits one is entitled to. Individuals who cannot afford premiums for a permanent life insurance policy could opt for a 20 year term life insurance plan. It is generally not suited to youngsters who have no foreseeable problem in the future or those who have just embarked on a new journey of financial independence.
How this plan works
The working of this plan is simple and straightforward. Individuals who purchase this scheme are entitled to protection during the tenure of this policy, i.e. 20 years. In the event of a policyholder passing away during this period, his/her nominee will receive a death benefit. The policy is active as long as premiums are paid. In the event of an individual passing away after the policy matures, no benefit will be paid. There will be no maturity benefit either, if a policyholder survives for the entire period of this policy.
Best 20 years’ term plans in India
Some of the most popular term life insurance plans for 20 years are mentioned below.
Aegon Life iTerm Plan - This plan offers cover ranging from Rs 10 lakh upwards and is ideal for those looking to invest smaller amounts in premiums
SBI Life eShield - Individuals can choose a cover ranging from Rs 20 lakh onwards with decent premium options
HDFC Life Click 2 Protect - This scheme offers cover ranging from Rs 10 lakh to Rs 10 crore
LIC e-Term Plan - The minimum cover under this plan is Rs 50 lakh, with a higher premium compared to others
Kotak Life Preferred e-Term Plan - Individuals can opt for a cover ranging from Rs 25 lakh onwards under this plan
Q. Do premiums for these plans differ from individual to individual?
A. Yes, the premium amount varies according to the health and age of an individual.
Q. Can a policyholder cancel the policy?
A. A policyholder can choose the cancel the policy within a stipulated time period (generally 30 days). Post this, he/she can opt to surrender the policy. A policy can be cancelled on grounds on non-payment of premium and an individual is not entitled to any benefits under such circumstances.
Q. Will the premium amount change every year?
A. Premiums for a particular policy might change from time to time, depending on the company which insures an individual. Certain policies have fixed premium amounts and an individual is expected to check with the service provider before choosing a policy.
Q. Can a policyholder extend the period of a term insurance?
A. No, extending the tenure is not permitted and a policy lapses on completion of the period. An individual will have to purchase a new policy in such cases.
GST of 18% is applicable on life insurance effective from the 1st of July, 2017