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Term Insurance Plan

Term insurance is one of the simplest forms of life insurance. Term plan offers a sufficiently large amount to your family at the time of death of policyholder. Whats more, this comes at a very affordable price. The plan covers your family from the risk of death for the limited period called term.

We all work hard to enhance our family’s financial status &lifestyle, to fund our children’s education and to secure a respectable retirement for ourselves.

However, life can sometimes be hard and an unfortunate contingency may bring misfortune to the family by hampering the family’s finances.

Term insurance takes care of the family in such unfortunate times. With term insurance, your family can continue to maintain their lifestyle by funding essential day to day expenditures and also achieve their life goal even in your absence.

What is Term Insurance?

Term insurance is a pure life insurance product, which provides financial protection in case of death of the life insured during the term of the policy. A term insurance plan is the most affordable form of life insurance cover. It is designed to financially protect ones family in case of death of the bread-earner.

For example, a 28 year old healthy, non-smoking male can secure a cover of Rs. 1 crore for his dependents for next 30 years. If he buys a term insurance plan, he will only pay approximately Rs. 563 per month

(Premium for Max Life Online Term Plan Plus)

The benefit of term insurance is that you can ensure financial safety for your family even if you are not there, at affordable rates.

Like any other life insurance plan, you need to pay premiums on your term insurance plan for the selected premium paying term, which can be paid based on the frequency chosen.

Additionally, you should seek to create a comprehensive cover for your family by adding more benefits to your term plan. Additional benefits like accidental disability, critical illness cover etc provide financial assistance in cases of disability and treatment of dreaded diseases. Critical illness cover is available at an additional premium.

Why should you Buy Term Insurance?

Death, disability, disease, all are realities seldom talked about. However, all three are realities we cannot possibly overcome with certainty.

Term insurance is one tool, which can save you and your family from the financial hardships brought upon by these three and similar disastrous conditions.

Consider for example a family of four, where the father is the primary breadwinner. The family needs about Rs. 50,000 a month to fund regular expenses like rent, food, other groceries, electricity, water, education fee etc Debts, if any are over and above this.

In case of an unfortunate event, life continues and so do these quintessential expenses. The family will still need Rs. 30,000 to 40,000 a month to meet all their needs.Here,an adequate term insurance cover comes into picture. It provides for the family with the following:

The loss of a life cannot be compensated, however a term plan can help to tide over the financial requirements of a family.

Benefits of Term Insurance

Term Life Insurance Rates by Age

(A tabular detail of all three different max life term plans: Maximum Maturity, Min Sum Assured, Claim Settlement, Premium for cover amount)

Below is a summary of top variants of Max Life Online Term Plan Plus, an affordable term insurance plan that provides a choice of 3 death benefit options to secure your family

Basic Term Plan

Term Plan with Monthly Income

Term Plan with Increasing Monthly Income

Maximum Maturity Age

85 Years

85 Years

85 Years

Minimum Sum Assured/Premium

S.A. limited by the minimum payable annual premium of Rs. 2200@

S.A. limited by the minimum payable annual premium of Rs. 2200@

S.A. limited by the minimum payable annual premium of Rs. 2200@

Claim Settlement Options

Lump Sum payout only

1. S.A. in Lump Sum

2. Level Monthly Income

1. S.A. in Lump Sum

2. Increasing Monthly income

Standard Premium 28 year old, non-smoking, healthy male for Rs. 1 Crore* cover for 28-year-old male

Rs. 563 p.m.

Rs. 748 p.m.

Rs. 819 p.m.

*Conditions: The premium is for the basic term plan with only lump sum death benefit, and for a non-smoker, healthy life.

Monthly Income grows at a rate of 10% (simple rate of return) every year

@ Only on regular pay policies, excluding modal, taxes and other levies

Key Features of Term Life Insurance Plan

How to Choose the Best Term Plan?

While selecting a term plan, you need to look for the following and ensure that your family has the best financial protection with the term plan:

Claim settlement record of a life insurance company indicates the ultimate moment of truth for the customer. Claim settlement record can be assessed through a percent number (Claim Settlement Ratio) released by IRDAI (Insurance Regulatory and Development Authority India) every year.

A consistently good claim settlement ratio indicates a robust and quick claim settlement process. Which means your dependents will have it easier to receive the death claim benefit from the insurer.

Max Life’s claim settlement ratio for the year 2017-18 was 98.26%.^

^Source – IRDAI Annual report 2017-18

Buying a term plan is usually only the start of the story. You need to manage your plan to maximise your benefits. Engaging with an insurer which not only offers a better plan but also helps you stay updated on the terms helps a lot.

The customer service from the life insurers can help the policy holders stick with the insurer longer. Persistency Ratio declared by IRDAI annually can help you judge the insurer’s service quotient.

Max Life’s persistency ratio has been 80.5% for the year 2017-18. that's a testament of the customer’s satisfaction and loyalty towards the company*

Source: *Public Disclosure FY 2017-18

Death is not the only risk you need to cover against. Apparently disability, life-threatening diseases, etc. can also damage your financial health. Adding these benefits along with few additional value-added features like ‘premium waiver’ can ensure better financial backup.

Also, since term insurance premiums are not as high compared to other types of insurance plans, adding these benefits to the plan does not burden your pocket much.

Traditionally life insurance policies have been paying a large sum of money to the dependents of insured. Often the dependents are not equipped to handle such a large sum of money to meet all their needs and goals.

Modern term plansoffer regular income option along with the lump-sum so that they can look after their immediate needs while investing the lumpsum for future goals.

Thus, selecting a regular income payout option while buying your term plan may save a lot of hassle for your dependents later.

Type of Term insurance plans

Max Life Insurance offers five different types of term insurance plans:

Basic Term Plan

Basic term plan is the term plan with life cover and pays a death benefit in a lump sum only. This plan does not have any maturity benefit.

Term Plan with Monthly Income

Term plan with monthly income gives you the option to ensure a regular stable income to your family apart from a lump sum death benefit.

Term Plan with Growing Monthly Income

Inflation is a major factor when it comes to regular household expenses. Term plan with growing monthly income gives the death benefit as growing regular income to your family along with a lump sum amount.

Term Plan with Return of Premium (TROP)

Term plan with return of premium is a specific kind of term plan where all the paid premiums are returned back to you at the end of the maturity.

Group Term Life Insurance Plan

Financial security is one of the essential needs of your employees. Group term life insurance plan is the most affordable way to ensure financial security for your employees’ families.

How the Term Insurance Plan from Max Life helps You?

Max Life Insurance offers term insurance plans with great features like:

Benefits like accident cover, critical illness cover and limited pay are available on payment of additional premium

Buying term insurance early from Max Life can help you keep up with your growing financial status and family. Max Life offers increment of Sum Assured of term plan at major life stages in your life, such as Marriage, childbirth, etc. This is available on payment of additional premium.

Additionally, with Max Life Insurance you can be assured that your family will receive the due benefit within a short period, and without having to run from pillar to post for it.

Max Life assigns a Claims Settlement Officer immediately to your claim, to assist you with the process for faster claim settlement.

Max Life’s Insta Claim Settlement feature ensures that death claims upto Rs. 1 crore are paid within 1 working day. InstaClaim is available for the following:

To know more about InstClaim, click here

https://www.maxlifeinsurance.com/content/dam/corporate/mailers/InstaClaim.jpg

Buy Term Insurance Online with Just Three Simple Steps

How long should be the term of your term plan?

The ideal term for your term insurance cover should be as long as you expect your financial liabilities to last.

For example, if you feel that your home loan may stretch a couple of years after your retirement, your term insurance should last at least as long as the loan after your retirement.

However, in the term insurance, it may not always be possible to increase the term later. Therefore, you need to ensure a long cover period at the time of buying the cover.

To avoid all guesses and stay secured for life you can opt for the longest tenure. You can easily manage the term cover after your retirement with ‘Pay Till 60’ feature of Max Life term plan.

Pay Till 60 ensures that your premium payments stop at 60, but the life cover continues till the maturity age you had selected.

Term Plan Frequently Asked Questions

Is Term Insurance a Good Idea?

Term life insurance is one of the best ways to secure your family financially in case of your untimely demise. Term insurance coverage provides a fixed amount of sum as a death benefit if you meet with life’s eventuality during the policy period.

It is a good idea to invest in a term life insurance policy as you only need to pay small annual premiums against a considerable sum. Moreover, this premium amount is subject to tax deductions, which adds the cherry on the cake.

For example- When you buy an online term insurance coverage worth Rs. 1 Crore, for a 30-yearpolicy term, in the event of your untimely demise (within the policy term), your family will receive the entire 1 crore Sum Assured as a death benefit, subject to terms and conditions

The term insurance coverage amount, thus, enables the insured’s loved ones to lead a decent life and achieve all their goals even in the absence of the breadwinner.

Moreover, buying additional riders like “Accidental Death Benefit Rider” or “Critical Illness Rider” helps to make the term plan more comprehensive. Such benefits are available on payment of additional premium

Therefore, having the best term insurance coverage is a good way to secure your family, even after you are no longer present to support them financially.

How much does term insurance cost?

The cost of term plan varies depending on various factors such as age, annual income, the amount and tenure of insurance coverage, health condition and whether you are a smoker/non-smoker.

For example, buying term insurance for a sum assured of Rs. 50,00,000 and a policy period of 30 years, will cost up to Rs. 4,720 annually for a 30-year old, non-smoker male. The same plan will cost up to Rs. 9,027 annually for a 40-year old, non-smoker male. (Standard Premium for Max Life Smart Term Plan, lumpsum payout option, inclusive of GST)

What is the eligibility for term insurance?

The minimum entry age to purchase term insurance is 18 years, while the maximum entry age while purchasing can be up to 60 years. Term insurance acts as a backup income for your family, incase of an unfortunate death. Hence, you also need to have regular source of income to be eligible to purchase term insurance.

What is the maximum age for term life insurance?

The maximum age to purchase term life insurance can be up to 60 years. If you choose to purchase Max Life Smart Plan with Return of Premium optional benefit, the maximum duration that you can buy this plan is 50 years.

This means, incase you are buying term plan at the age of 25 years, then you can get coverage upto 75 years, and if you purchase it at the age of 35, you can get coverage upto 85 years. However, as the maximum age for coverage is 85 years, if you buy at the age of 40, you can get coverage only for 45 years, that is, till you turn 85

Is natural death covered in term insurance?

Term insurance does pays your family in the event of both natural and accidental death. Term insurance is designed to provide your family a certain amount of money, irrespective of the reason of death. However there are some exclusions like suicide in 1 year, non-disclosure of rightful facts, that can lead to decline of your claim amount. To know more about such exclusions, please refer to the policy document. T&C apply

How much term insurance you need?

Experts usually propose a term life insurance cover which is at least 10 times of your annual income, 15 to 20 times is always a better option. Include additional cover for your liabilities in it?home loan, vehicle loan, personal loan and you are secured.

For instance, if your annual income is Rs. 10 Lakhs, it is ideal to buy term life insurance cover of at least Rs. 1 Crore, assuming that you do not have other liabilities. In case you have a house mortgage of Rs. 25 Lakhs cover, include this additional Rs. 25 Lakhs as additional cover in your term life insurance coverage.

Deciding on how much term cover you will need or calculating the term insurance premium that you might need to pay can be a tedious process. Max life Term insurance calculator or Human Life Value Calculator can make the calculations easy for you. Moreover, keep the following factors in mind while arriving on the sum assured amount:

Can I have two Term Insurance Policies?

Yes, you can have multiple term life insurance policies. You can take all policies from either one insurer or multiple insurers. With age, your lifestyle changes and liabilities increase, hence buying an extra life cover makes sense.

The maximum coverage, be it single or all plans combined, that one can avail is calculated basis his income, age, assets and financial liabilities.

While buying multiple policies, you keep in mind these 2 important points

Disclose all the existing policies that you own currently to the new insurer from whom you are buying the additional new policy. This will help them asses your eligibility cover.

Read the policy documents very carefully to understand all the features, inclusions and exclusions. For example, in case of death due to accident or suicide, your nominee may receive the entire lumpsum from one insurer while receive no money at all from the other insurer. This will be the case when the latter does not cover death due to accidents or suicide.

Which is the best term insurance plan in India?

When buying a term plan, you must check for the following pointers to make sure you have bought the policy that best suits your needs –

Claim Settlement Ratio – This is the number of claims settled against total claims received by the insurer. You must choose the insurer with a higher claims ratio. The regulatory body, IRDAI, publishes this for each life insurer in it’s Annual Report.

Solvency Ratio – This ratio shows the financial ability of an insurer to pay it’s short-term as well as long term debts. Choose the insurer with a higher solvency ratio as it shows the strong financial strength of a company. This can be found in IRDAI’s annual report.

Quality of Customer Service – This is most critical as it shows how much the insurer cares about a valued customer. Look at Customer Grievance rate (it is the number of customer queries resolved against total reported) in the IRDAI Annual report.

Product Features –After shortlisting the top insurers, you must read the product features in detail and pick the one that meets your personal needs and financial goals.

How does term plan work?

Term Insurance Plans are the simplest form of Life Insurance products. The policyholder has to pay a premium amount, that is fixed for the entire duration, for a specified period of time. In case of an unfortunate death of the policyholder, the nominee receives a lumpsum payout. If the policyholder survives through the entire policy term, no payout is given either to the policyholder or the nominee.

Term Insurance Plan offers 2 unique advantages –

Higher Life cover at very cheapest term plan Premiums - This is a pure protection plan where payout is made only in case of death, there are no maturity benefits on survival. Additionally, these plans can be bought online which cuts the policy distribution cost. Thus, premiums are very very low. For example, you can get a a 1 Cr life cover at just Rs. 563 pm*.

Tax Saving Benefit – The premium paid is eligible for tax exemption under section 80 C.

What documents should I have to buy term insurance plan online?

List of documents which are required while buying a Term Insurance Plan are:
  • Age Proof: Pan Card, Voter’s ID, Passport, Driving License, School/ College Certificate, Birth Certificate.

  • Address Proof: Utility Bill, Passport, Voter’s ID, Telephone bill, Ration Card, Electricity Bill, Bank A/C Statement and Letter from Recognized Public Authority.

  • Photo Identity proof: Driving License, Voter’s ID Card, Passport, Pan Card, Letter from Recognised Public Authority or Public Servant with Photograph verifying the identity and residence, Aadhar Card.

  • Recent passport size photograph

  • Income Proof: Salary Slip, Form 16, ITR/ Assessment Order/ Employers Certificate.

  • Medical Reports: In case required from the insurance companies end.

  • While purchasing a term insurance policy online, just you need to upload the attested copy of the above documents.

Are Term plans available online?

Yes, Term plans can be purchased directly from the website of some insurers, in a matter of minutes. Buying online not only gives you convenience and speed, but also offer the cheapest term insurance plans. Research shows that in some cases, online term insurance plans can cost up to 40% lesser than offline plans with the same features and benefits. Key factors that influence cost is the absence of an insurance advisor (distribution costs and commissions is saved) and savings from overheads (documentation, logistics, stationery, etc).

To pay insurance premiums online, you can choose from a whole host of fast and secure payment options like net banking, debit cards, credit cards and more. Because all payments are instantly processed through a secure gateway, you are ensured peace of mind. The payment process is quick, hassle-free and provides an instant online receipt. This is especially ideal for times when you need to quickly furnish documents for claiming tax exemptions.

How much risk cover should I opt for my term insurance plan?

It completely depends on your annual income & your age. Ideally the risk cover should be 10-20 times of your annual income.

Do term insurance plans offer tax benefit?

A term insurance policy also offers tax exemptions to lower your tax outgo. As per Section 80C of the Income Tax Act, the premium paid towards term insurance policy gets a tax deduction for up to Rs 1.5 lakh. Similarly, for critical illness benefits, you can get tax benefits for up to Rs 25,000 under Section 80D. Moreover, the benefits received by your family will also be tax-free. For any tax-payer, these tax benefits are like icing on the cake.

Does term plan can be used for the purpose of repayment of financial liabilitie

A term insurance policy also offers tax exemptions to lower your tax outgo. As per Section 80C of the Income Tax Act, the premium paid towards term insurance policy gets a tax deduction for up to Rs 1.5 lakh. Similarly, for critical illness benefits, you can get tax benefits for up to Rs 25,000 under Section 80D. Moreover, the benefits received by your family will also be tax-free. For any tax-payer, these tax benefits are like icing on the cake.

 

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Max Life Insurance Co. Ltd. is a Joint Venture between Max Financial Services Ltd. and Mitsui Sumitomo Insurance Co. Ltd. Registered Office: 419, Bhai Mohan Singh Nagar, Railmajra, Tehsil Balachaur, District Nawanshahr, Punjab -144 533. Corporate Office: Max Life Insurance Co. Ltd., 3rd, 11th and 12th Floor, DLF Square Building, Jacaranda Marg, DLF City Phase II, Gurugram (Haryana) - 122002. Operation Center: Max Life Insurance Co. Ltd, Plot No. 90-A Udyog Vihar, Sector 18, Gurugram (Haryana) - 122015.

Helpline: 1860 120 5577 (9:00 A.M to 6:00 P.M Monday to Saturday) * Call charges apply. Online Term Plan Helpline: 1800 200 3383. Fax Number:0124-4159397.

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Life Insurance Coverage is available in this Product
Unit Linked Insurance Products (ULIPs) are different from the traditional insurance products and are subject to the risk factors. The premium paid in the Unit Linked Life Insurance Policies is subject to investment risks associated with capital markets and the NAVs of the units may go up or down based on the performance of fund and factors influencing the capital market and the insured is responsible for his/her decisions. Max Life Insurance is only the name of the insurance company and Online Savings Plan is only the name of the unit linked life insurance contract and does not in any way indicate the quality of the contract, its future prospects or returns. Please know the associated risks and the applicable charges from your Insurance agent or the Intermediary or policy document of the insurer. The various funds offered under this contract are the names of the funds and do not in any way indicate the quality of these funds, their future prospects or returns.
Some benefits are guaranteed and some benefits are variable with returns based on the future performance of your Insurer carrying on life insurance business.
Assumed rates of return (4% and 8%) are not guaranteed and they are not the upper or lower limits of what you might get back, as the value of your policy is dependent on a number of factors including future investment performance. The guaranteed and non-guaranteed benefits are applicable only if all due premiums are paid.

THE LINKED INSURANCE PRODUCTS DO NOT OFFER ANY LIQUIDITY DURING THE FIRST FIVE YEARS OF THE CONTRACT. THE POLICYHOLDER WILL NOT BE ABLE TO SURRENDER/WITHDRAW THE MONIES INVESTED IN LINKED INSURANCE PRODUCTS COMPLETELY OR PARTIALLY TILL THE END OF FIFTH YEAR.

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