Term Insurance Plans

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.

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)

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.

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

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

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:

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.

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.

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.

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.

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. 

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.

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

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.

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.

The amount of protection that the policyholder will receive based on the terms of the policy

Insurability means all conditions that affect the health, susceptibility to injury and life expectancy of an insured.

The insured is the person who is covered in the insurance policy.

The maturity date is the date when the amount paid towards the life insurance policy is given to the policyholder once the term of the policy ends.

The amount given to the insured at the end of the maturity period is called the maturity claim.

This is when the policyholder or insured officially authorizes another person to receive any monetary benefits of the policy. The authorized person is the Nominee.

The amount paid by the insured, either in a lump sum or in periodic amounts, to the insurance company under the life insurance policy.

The surrender value it the amount paid to an insured who wishes to terminate the policy before its maturity date.

The age at which the insured starts receiving a pension from the insurance company in an insurance-cum-pension policy.