Term Insurance

Term insurance is only for breadwinners

A common belief is that only the primary earning member of a family needs term insurance. However, non-earning members, such as homemakers, also contribute significantly to the household. Their absence could lead to financial strain, making term insurance a valuable safety net for all family members.

Term insurance offers no returns and is a waste of money

Many people assume that term insurance is a poor investment because it does not provide maturity benefits. However, its primary purpose is to offer financial protection, not wealth accumulation. The affordable premiums and high coverage make it a cost-effective way to secure a family's future.

How does a term insurance plan work?

A term insurance plan is a straightforward life insurance policy designed to provide financial security to your family in case of an unfortunate event. It offers high coverage at affordable premiums for a fixed duration. If the policyholder passes away during the policy term, the nominee receives the death benefit. Below are the key aspects of how a term insurance plan works.

Key aspects of a term insurance plan

• Choose the sum assured – The policyholder selects the coverage amount based on financial needs and liabilities.
• Select the policy term – The coverage duration can range from 5 to 40 years, depending on the insurer.
• Pay regular premiums – Premiums can be paid monthly, quarterly, annually, or as a lump sum.
• Nominate a beneficiary – The policyholder designates a nominee who will receive the sum assured in case of their demise.
• Claim settlement – In case of the policyholder’s death during the term, the insurer processes the claim and pays the death benefit to the nominee.
• Policy expiry – If the policyholder survives the term, there are no payouts unless a return of premium (ROP) option is chosen.

What is a term insurance calculator?

A term insurance calculator is an online tool designed to help individuals estimate the premium they would need to pay for a specific term life insurance plan. By inputting details like age, sum assured, policy tenure, and smoking habits, the calculator provides an approximate premium amount. It simplifies the decision-making process by allowing users to compare different plans and customise them according to their financial goals. Additionally, it helps in understanding how changes in coverage or tenure impact the premium, making it a useful tool for anyone looking to purchase term insurance.

Convenient and hassle-free process

Purchasing a term life insurance policy online is quick and easy, allowing you to compare different plans, calculate premiums, and complete the process from the comfort of your home. The digital process eliminates the need for paperwork and frequent visits to insurance offices.

Lower premiums and better affordability

Online term insurance plans often come with lower premiums as there are no intermediaries or agent commissions. Insurers pass on the cost savings to customers, making it a cost-effective way to secure financial protection for your family.

Easy comparison of policies

When buying a term insurance plan in India online, you can compare multiple policies, features, and benefits side by side. This helps in selecting a plan that fits your financial needs and provides the right level of coverage.

Faster policy issuance

Online applications have a quicker processing time, with instant premium calculations and eligibility checks. Many insurers offer instant approval for a term life insurance policy, ensuring financial security without unnecessary delays.

Transparent information and decision-making

Buying a term insurance plan in India online ensures complete transparency in policy details, exclusions, and benefits. Customers can access policy documents, premium charts, and claim processes, making informed decisions without relying on agents.

Affordability:

Term insurance is an affordable option. It is an excellent choice for individuals who want to ensure their family’s financial security without incurring steep costs.

Pure protection:

Term life insurance focuses solely on providing a death benefit. It is a straightforward and effective way to ensure your loved ones are taken care of in case of your untimely demise.

High coverage amounts:

Term insurance plan enables you to secure a substantial coverage amount, offering a higher level of financial protection at low cost.

Primary breadwinners:

Any individual who is the main income earner in the family, term insurance ensures their family’s financial security and helps them maintain their lifestyle if something happens to you.

Parents with dependents:

Parents, especially with young children, should buy term insurance to secure their children's future education, upbringing, and other expenses in case of an untimely demise.

Newly married individuals:

Newly married couples or those planning a family, term insurance can safeguard your spouse and future children’s financial well-being in your absence.

Loan borrowers:

If any individual has borrowed loans, term insurance ensures that their family is not burdened with repayments in case of death.

Young professionals:

Term insurance is especially affordable for young individuals. By locking in a low premium rate, young professionals can secure long-term coverage at a lower cost.

Entrepreneurs:

Business owners can use term insurance to provide coverage for the liabilities and their family is not left dealing with business liabilities.

Evaluate coverage based on financial needs

Assess your financial responsibilities, including debts, future expenses, and dependents' needs, to determine the right coverage amount. A well-chosen term insurance plan in India should provide adequate financial support to your family in case of unforeseen circumstances.

Compare different term insurance plans

Research and compare term life insurance plans based on premium costs, claim settlement ratio, policy benefits, and additional riders. This ensures you select a policy that offers maximum benefits at an affordable price.

Check insurer’s reputation and claim process

Choose a reliable insurer with a high claim settlement ratio and a smooth claim process. A trusted provider ensures that your term life insurance benefits reach your family without hassle during difficult times.

Level term insurance:

This is the most common type of term insurance. In level term insurance, the coverage amount remains the same throughout the policy term.

Decreasing term insurance:

In decreasing term insurance type, the coverage amount decreases over time, often used to cover a specific debt like home loan.

Increasing term insurance:

Here, the coverage amount increases over time to account for inflation or other financial responsibilities which are of growing nature.

Affordable premiums:

Term insurance plans are cost-effective, offering high coverage at lower premiums compared to other life insurance policies.

High sum assured:

You can choose a substantial sum assured, ensuring your family is financially secure even in your absence.

Flexible policy tenure:

Term life insurance allows you to select the policy term based on your needs.

Death cover:

In the event of the policyholder's death during the policy term, the sum assured is paid to the nominee.

No maturity benefits:

Unlike other insurance plans, term insurance does not offer maturity benefits. It provides only the death cover.

Riders for additional coverage:

You can enhance your term insurance policy with riders.

Tax benefits:

Premiums paid towards term insurance policy are eligible for tax deductions under Section 80C, and the death cover is also tax-exempt under Section 10(10D).

Tax benefits as per prevailing Section 10(10D) and Section 80C of the Income Tax Act (under old regime) shall apply. You are requested to consult your tax consultant and obtain independent advice for eligibility before claiming any benefit under the policy.

What are term insurance riders?

Term insurance riders refer to additional benefits or features added to the basic term insurance policy to enhance its coverage. These riders provide additional protection in case of accidental death, disability, and others. They come at an added cost but provide financial security during unforeseen circumstances.

Assess your coverage needs

Evaluate your financial responsibilities, including loans, dependents, and future expenses, to determine the right coverage amount. Choosing the term insurance plan in India depends on your income, liabilities, and long-term financial goals.

Compare term insurance policy

Research and compare different term insurance plans based on premium rates, policy benefits, claim settlement ratio, and additional riders. Online term insurance comparison tools help find the most suitable plan at the best price.

Complete the application and medical check-up

Fill out the online application form with accurate details and undergo a medical examination if required. Once approved, pay the premium, and your term insurance plan will be activated, securing your family’s future.

Suicide exclusion

In case of death of a life assured due to suicide within 12 months from the date of commencement of risk or the date of latest revival of the policy, whichever is later, then the nominee or beneficiary of the policyholder shall be entitled to receive, the higher of 80% of the Total Premiums paid or the surrender value as on the date of death, provided the policy is in force.

Total Premiums Paid means total of all the premiums paid under the base product, excluding any extra premium and taxes, if collected explicitly. Please note that GST and cess, if any, will be collected over and above the premium under the policy

Step 1 - Register your claim request

Register the claim request with the insurer through their website, e-mail or by calling their claim assistance contact number.

Contact No.: 1800-209-7272

Step 2 - Submit the required documents

Submit the necessary documents along with the duly filled claim form online. You can also submit it to the nearest branch of the insurer.

Step 3 - Claim settlement

The insurer will assess the claim request. The claim initiator will receive the status via e-mail and SMS. The claim initiator can also check it online on the insurer’s website.

Photograph of the proposer

Age proof, such as PAN card, passport, voter’s ID, birth certificate.

Address proof, such as passport, driving licence, voter ID card, Aadhaar card, etc.

Identity proof such as Aadhaar card, passport, driving licence, etc.

Income proof such as form-16, salary slips, ITRs, etc.