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:
- A Lump Sum to meet their Immediate need
- A Regular income to meet their household income (if opted)
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
- Financial protection in the most unfortunate circumstances
- Safety for dependents from your financial liabilities like loan, and any other debts
- Disability benefit with the term insurance will provide you financial support in case of accidental disability, (available on payment of additional premium)
- Critical illness benefit to your term insurance to avail good treatment for life threatening diseases without worrying about the costs (available on payment of additional premium)
- Tax savings up to Rs. 1.5 lakh on the premium paid under section 80C on Income Tax, as per prevailing tax laws
- Tax benefit on the lumpsum benefit paid to your dependents under section 10(10D)on Income Tax, as per prevailing tax laws
- A regular income stream along with a lump sum benefit, to ensure day to day life expenses are met
- Long term insurance cover till age 85 that can be useful if you wish to leave a legacy for your family, subject to maximum policy term of 50 years
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
Save Tax U/S 80
The premium you pay for your term insurance plan can save tax for you. Critical illness premium saves tax for you u/s 80D, while life insurance premium is counted u/s 80C of Income Tax, subject to conditions
Long Policy Term
You can opt for a longer policy term to stay protected. You can stay covered for up to 50 years with a term life cover.
Low Entry Age
Most term Plans have a minimum entry age of 18 years; that is, you can buy term insurance cover as soon as you hit adult age.
Death Benefit as Regular Income
Modern term insurance plans allow you to give your dependents a regular income along with the lump-sum benefit in the event of your unfortunate demise.
Premiums Returned on Survival
You can now receive all your money back if you survive the policy term. Term insurance plans with the return of premium benefit offer to return all the paid premiums on the policy as survival benefit.
Add Disability Benefit to Your Term Plan
Any kind of disability due to accident or illness can affect your income earning capacity. You can add disability benefit with your term plan at affordable prices. The disability cover is available on payment of additional premium.
Cover Against Life Threatening Diseases
Cancer, heart attack, renal failure are some curable diseases which can be life-threatening. Don’t let money concern you on the way to the cure from these diseases. Critical illness cover is available on payment of additional premium
High Maturity Age
Of all life insurance plans, term insurance offers the life cover for the highest age bracket. You can continue the term-insurance cover up to the age of 85 with Max Life Insurance.
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 the Insurer
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
- Know the Existing Customer Experience
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
- Choose Your Benefits Carefully
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.
- Look for Regular Income Payout
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:
- Monthly income payout
- Premium waiver benefit on accidental disability
- Critical and Cancer cover
- Limited pay till retirement options
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
- Claims for policies completed 3 years
- All mandatory documents# should be submitted before 3:00 PM on a working day
- Claim Amount on all eligible policies^ is upto 1 crore
- Claim does not warrant field verification
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
3 steps Online Buying procedure (Each step with 100-150 words)
Step 1: Estimate Your Sum Assured
Visit the website and click on Calculate Premium to start the process. The first form only asks a few basic questions related to age, contact information, smoking habits and annual income.
Once you submit the form you will receive the quote for the maximum sum assured you are eligible for. Maximum sum assured is based on your annual income.
Maximum sum assured you could buy in term insurance is capped at 15 to 20 times of your annual income, subject to underwriting
While buying term insurance, you can increase or decrease your sum assured as per your need. Your premium amount will adjust accordingly.
Step 2: Choose Your Benefits & Get a Quote for Possible Premium
In the first step, you have calculated the base premium of the term insurance plan. However, term insurance plan only carries a death benefit, which does not offer protection from other risks.
You can add multiple benefits to your base term plan such as:
- The regular monthly income payout option
- Premium Waiver Benefit
- Cancer or Critical Insurance
- Accidental death and disability benefit
Adding these benefits may increase your premium cost. However, these benefits are useful additions to the basic plan and will be quite helpful in keeping your finances in order in case of emergencies.
Step 3: Complete Your Application Form& Pay the Premium
Insurance is a promise based on trust between the insured and insurer. Thus, to cover your risks, life insurer will ask multiple questions related to health and occupation.
Once you are satisfied with your choices of benefits, you need to complete the detailed application form. Make sure to answer the following as correctly as possible:
- Health history (Family & self)
- Occupation
- Lifestyle habits
- Hobbies etc.
After completing your application form, you can pay the premium and submit the documents required to complete your application.
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. This benefit is available on payment of additional premium.
Why choose Max Life Online Term Plan Plus?
Key benefits of Online Term Insurance Plan:
1. Affordable premiums (1cr cover at just Rs 563/month*)
2. Tax savings under Section 80C (As per prevailing tax laws)
3. Flexibility to choose the amount that family receives
*Standard Premium for 28-year old male, non-smoker, base plan policy term of 30 years, premium payment term of 30 years
Recent Articles Related to Term Insurance
- Myths and Facts when Buying Term Insurance Online
- Need a Reason to Buy Insurance Online? Here are Eight!
- Key Features and Benefits of Max Life Online Term Plan Plus
- How to select the best suitable Term Insurance Plan for your family
- From Critical Illness to Holistic Wellness - The Yoga Way
Term Plan Calculator
Other Calculators
Term Plan Video
Read on the frequently asked questions about term plan and term insurance plans offered by Max Life Insurance
