Term insurance provides your loved ones with the required financial security for the uncertainties of life. To choose the most suitable term insurance for yourself, you should do a term insurance comparison as it is crucial to invest in the right insurance policy to avoid any future financial troubles for your family.
When you look at the term insurance plans being offered, you will find that options are abundant, which may confuse you. Therefore, term plan comparison is a must to choose the most suitable plan for you and your family.
What is Term Insurance Plan?
A term insurance policy is the simplest life insurance product that offers financial protection for a specific period. In case of your untimely demise during the policy term, your loved ones will get the insurance benefit to maintain their lifestyle and secure their goals.
Know more: What is Term Insurance?
Why Do You Need Term Insurance?
Term insurance is perhaps the most affordable variant of life insurance that you can take to ensure your family’s protection. In case of an unfortunate event, term insurance provides financial security for you and your family. It is advisable to buy life insurance as soon as you start earning after careful term insurance comparison to cover your liabilities and have a financial backup at the time of a health crisis.
If you have dependents in your family, it becomes even more crucial for you to have a term plan.
Term Plan Comparison
The insurance industry has broadened extensively, and you have numerous term plan options to choose from according to your suitability. You can make a term plan comparison online and get the best option for you and your family.
Here are a few factors to be considered when comparing term insurance plans:
Premium Payment Options
Along with affordable premiums, term insurance plans offer the ease of payment through different options. You can choose between various premium payment tenure - limited pay (for a fixed duration, less than the policy coverage period), single pay, or regular pay (throughout the policy coverage period).
Moreover, you have the option to choose the premium payment frequency - monthly, quarterly, or yearly, depending upon your financial
Premium Payment Options
Along with affordable premiums, term insurance plans offer the ease of payment through different options. You can choose between various premium payment tenure - limited pay (for a fixed duration, less than the policy coverage period), single pay, or regular pay (throughout the policy coverage period).
Moreover, you have the option to choose the premium payment frequency - monthly, quarterly, or yearly, depending upon your financial dispositions and convenience. To ensure you select a feasible premium payment option, it is crucial that you make a thorough term insurance comparison and analyze the premium payment options offered.
dispositions and convenience. To ensure you select a feasible premium payment option, it is crucial that you make a thorough term insurance comparison and analyze the premium payment options offered.
Premium Amount vis-à-vis the coverage
Evaluate your family’s needs and your financial situation at the time of term insurance comparison. You must understand that the premium payable under a term insurance plan varies based on the coverage amount chosen. In other words, the higher the chosen coverage, the higher will be the premium payable.
Thus it is advisable that you use an online term plan premium calculator to determine the premium amount payable as per the coverage opted. Using a term plan calculator also helps you get an insight into the overall long term premium-payment structure and manage your funds accordingly.
Various Riders offered for a more comprehensive coverage
While buying a term insurance policy, you can make your coverage more comprehensive by adding different riders to your basic term plan. While the premium payable increases slightly as you add these riders, the additional expense proves to be inconsequential compared to the long-term financial benefits of these add-ons.
At the time of making a term insurance comparison, you must look into different types of riders such as critical illness benefit, waiver of premium, and accidental death/disability cover benefit offered with the base plan. It is advisable that you first assess your needs and invest in the term plan which offers the riders which you would like to opt to create a more robust financial safety net for your loved ones.
Maximum Policy Duration Offered
You may be confident with your health or financial stability today, but you cannot possibly foresee the future. Term insurance plans allow you to choose a policy tenure that covers your working and post-retirement years – facilitating long-term financial security even if you are not earning a regular source of income after retirement.
The best thing to do here is to take a maximal insurance coverage period and opt for the plan which offers coverage till the age you want to be covered.
Claim Settlement/Paid Ratio of the Insurer
With all life insurance companies offering term plans, it becomes crucial that you spend time in making a comprehensive term insurance comparison and factor-in the claim settlement/paid ratio of the insurance companies. The claim settlement ratio of an insurer is a statement of their credibility and track record of settling term insurance claims. Thus, the higher the Claim Settlement Ratio, the better it is.
What are the Different Types of Term Insurance in India?
Let us look at some of the types of Term insurance:
1. Basic Term Plans
It is the simplest form of term insurance, which provides only level life cover without any Maturity Benefit. Under this term plan, the sum assured remains fixed throughout the policy tenure, and the policyholder’s nominee(s) receive the death benefit in case of death of the Life Assured.
2. TROP (Return of Premium) Plans
A term plan with return of the premium option comes with a maturity benefit where the total premium will be returned if the policyholder survives the term period.
3. Increasing and Decreasing sum assured Term Plans
In an increasing term plan, your sum assured increases on an annual basis while keeping the same premium amount for the policy tenure. The premium is, therefore, usually on a higher side from the beginning.
Decreasing term plans mean the opposite, i.e. the sum assured keeps on reducing every year and comes in handy in case of debts such as a personal loan.
3. Increasing and Decreasing sum assured Term Plans
In an increasing term plan, your sum assured increases on an annual basis while keeping the same premium amount for the policy tenure. The premium is, therefore, usually on a higher side from the beginning.
Decreasing term plans mean the opposite, i.e. the sum assured keeps on reducing every year and comes in handy in case of debts such as a personal loan.
Let us now look at the term insurance options offered by Max Life Insurance in detail. Max Life Insurance offers Max Life Insurance Online Term Plan Plus (UIN No. 104N092V04) and Max Life Smart Term Plan (UIN - 104N113V02), which are non-linked non-participating individual pure risk premium life insurance plans.
How Much Term Insurance Costs for Different Ages?
As we cannot predict the future, it is better to have a financial backup in the form of a term plan.
Below is a table that will help you get an idea about the premium rates according to various ages and additional riders under the Max Life Smart Term Plan (UIN - 104N113V02) (Non-Linked Non-Participating Individual Pure Risk Premium Life Insurance Plan).
Age |
Base Policy Premium (Rs.) |
With Return of Premium (Rs.) |
With Critical Illness Cover (Rs.) |
With Accidental Cover (Rs.) |
With Waiver of Premium (Rs.) |
25 Years |
4,956 |
7,942 |
7,706 |
8,496 |
5,067 |
35 Years |
6,903 |
12,697 |
11,942 |
10,443 |
7,200 |
45 Years |
11,151 |
27,170 |
20,591 |
14,691 |
12,030 |
55 Years |
19,116 |
1,01,522 |
36,805 |
22,656 |
20,706 |
Note: Term insurance premiums mentioned above are based on the following assumptions:
- For a non-smoker healthy male across different age groups i.e. Age 25, 35, 45 and 55 Years (Age last birthday) with annual income of Rs.5 lakh – Rs.7 lakh
- With Life Cover of Rs. 50 Lakhs, Accidental cover of Rs 50 lakhs and Critical Illness Cover of Rs.10 lakhs
- Policy term = 65 years – Age at Entry
- Premium Payment Term is the same as the Policy Term
- The Premiums stated above are inclusive of GST and paid annually.
As you can see, buying a term plan at a young age is beneficial as the rates are lower during that time. It is therefore advised to make term policy comparison as soon as you start earning and invest in a comprehensive cover.
How to Buy Max Life Term Insurance?
We, at Max Life Insurance, offer easy-to-buy term insurance plans so that you can take one at your convenience anytime and from anywhere.
Below are the steps explained (please note that the values depicted in the illustrations provided under this section are for illustrative purposes only, and the actual premium payable may vary from one person to another):
Step 1: Fill in your details in the term insurance calculator with name, gender, date of birth, smoking habits and annual income bracket. Click on Calculate now to proceed.
Step 2: You can customize your coverage amount, the period for which you want life cover, the period for which you want to pay the premiums and also how frequently you would like to pay the premiums. You can choose the policy coverage tenure and opt for premium payments either regularly throughout the Policy Term or for different shorter tenures (as depicted in the below illustration)
Step 3: You now get the option to take additional coverage to your base term plan according to your needs. Based on the rider add-ons selected, your premium will increase slightly.
Step 4: You need to provide some other personal details such as email address, education type, Pan number, occupation type and postal pin code (as depicted in the illustration below.)
Step 5: Finally, you can select the payment method and begin the process either through net banking, debit card or credit card.
Gone are the days when you had to visit the insurer’s office to buy an insurance policy. With the ease of purchase due to online facilities, everything is available online, including term policy comparison, application process and payment procedures.
After the payment is done, you will be required to answer a few more questions related to your health and medical history.
A Lifetime’s Worth of Financial Security Awaits You!
We, at Max Life Insurance, understand your concern and love for family. Therefore, we suggest that to buy a suitable plan term insurance comparison is crucial. Keeping in mind your needs, we offer comprehensive term insurance plans for your family’s overall financial protection. These plans are designed to help you protect your loved ones financially by offering suitable coverage in case of an eventuality, i.e. death, disease and disability.
A Lifetime’s Worth of Financial Security Awaits You!
We, at Max Life Insurance, understand your concern and love for family. Therefore, we suggest that to buy a suitable plan term insurance comparison is crucial. Keeping in mind your needs, we offer comprehensive term insurance plans for your family’s overall financial protection. These plans are designed to help you protect your loved ones financially by offering suitable coverage in case of an eventuality, i.e. death, disease and disability.
Knowing your family will be taken care of at all times, even after your demise, is an excellent source of relief. Therefore, a term insurance comparison is necessary to find the one that suits you and your family’s financial needs. For more enhanced coverage, you can opt for the additional riders such as critical illness cover, waiver of premium plus or comprehensive accident accidental benefit rider.
While buying a term insurance policy, it is also mandatory that you refrain from hiding any health- and age-related information to reduce your premium amount. It is often seen that individuals try to avoid revealing their smoking or tobacco consumption habits at the time of buying the term plan. However, not disclosing any such information may have severe consequences later, including a rejection of the claims filed.
Note:
Max Life Critical Illness Cover (UIN: 104B031V02; Non Linked Non Participating Group Rider)
Max Life Waiver of Premium Plus Rider (UIN: 104B029V03; Non-Linked Non-Participating Individual Pure Risk)
Max Life Comprehensive Accident Benefit Rider (UIN: 104B025V03; Non Linked Non Participating Individual Pure Risk)
Sources:
[1] https://www.morningstar.in/posts/42304/termplans.aspx
[2]https://economictimes.indiatimes.com/wealth/insure/step-by-step-guide-to-choosing-the-perfect-term-plan/articleshow/51209860.cms
[3] https://qrius.com/10-reasons-why-term-insurance-plans-are-must-to-have/
ARN: July/Bg/14