Term Insurance is the cheapest form of life insurance that provides full financial coverage for a defined period of time. In the event of any unforeseen situation the policyholder's family is taken care of and financial stability is ensured. Death benefit is payable to the nominee who is usually a family member. You can choose to get a lumpsum amount or combination of lumpsum and monthly amount as per your requirement. Some companies also cover permanent or partial disability wherein the policyholder's regular income is disrupted.
Note: In case of survival of the policyholder the coverage at the earlier rate of premiums is not guaranteed after the expiry of the policy. The buyer has to either obtain extended coverage with different payment condition or forgo the coverage entirely.
In the event of an unforeseen situation who will take care of your liabilities and responsibilities? It is here that the importance of term insurance is felt. The lumpsum that your family will get as death benefit can bring financial stability and pay off the liabilities. It is the real support that your family can have if something happens to you. Term insurance is important for everyone and especially more for the bread earner of the family.
"Family is not an important thing, it's everything." – Michael J. Fox
Don't be short-sighted. Get Term Insurance and secure your family’s future. Save their harassment by financially securing them through a term plan.
Term Insurance Plans are specifically designed to secure your family's core financial needs in case of death or uncertainty. According to the plan, family/dependents of the life insured is/are eligible for a lump sum amount in case of death or critical illness, if applied for, of the life insured and during the term of the policy. Such an insurance plan can help your family to have sound financial independence, even if you are not around.
The key features of term insurance plans are:
The minimum policy term is 5 years, with the maximum varying from 25 years to whole life span for equated monthly premium payments. For single premium payment policies, the policy term is 5 to 15 years.
Term insurance provides flexibility in terms of choosing the plan on single life basis or joint life basis.
To be eligible for term insurance plans, the minimum age of entry is 18 years, with a maximum age limit of 65 years with optional add on benefits.
On death of life assured during the term of the plan, the nominee or assignee, in case where the policy has been assigned to someone else, will receive the total/ assigned death benefit chosen at the time of commencement.
Term insurance plans don't come with any survival or maturity benefits. If one wants maturity benefits, then a TROP (Term Return of Premium) plan is suggested. Read more about TROP Plan here.
Additional optional benefits such as critical illness and accidental death/ disability or Accelerated Sum Assured are also available.
|Entry Age||18 years||65 years|
|Policy Term||5years||30-55 years|
|Maturity Age||-||75 years to Whole Life|
|Annual Premium||INR 2000||Based on Sum Assured and age of applicant|
Premium Payment Mode: Single | Regular - Yearly, half-yearly, quarterly, and monthly.
Term insurance offers flexible plan options to suit the need of every individual. You can choose:
Term life insurance plans come with excellent tax benefits. You can avail lucrative tax benefits under Section 80C and Section 10 (10D) of the Income Tax Act, 1961. Additionally, the premiums paid for the Critical Illness Benefit also qualifies for a deduction under Section 80D.
Note: Tax benefits are subject to changes in tax laws. Please consult your tax advisor for details.
Term insurance plans have become extremely popular in the last few months owing to a big drop in the cost of premium amount and huge amount of cover. For example, you can get Rs 1 crore of term insurance by paying something below Rs 500 per month.
While we understand the importance of having a term insurance what confuses a buyer is – How much death benefit cover do I need?
Your lifestyle characterized by annual income, dependents and liabilities is an important deciding factor. Ideally, one should have a life cover of 15-20 times their annual income. A married person with children should have higher life cover than a bachelor. Somebody with a home loan to pay off should have higher life cover. Also, consider the factor of inflation in paying premiums and coverage benefits.