Term Insurance Plans for your family

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. 

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.

A Term plan is a pure protection plan which simply replaces the income earned by the family’s breadwinner in case of his death. Though, there is no perfect age to buy this plan, however, it is a fact that the younger you are, the cheaper the premiums. For the same 1 Cr life cover, the monthly premium will be ~600 for a 25 year male (non-smoker) vs ~1,200 for a 35 year male (non-smoker). Thus, makes sense to buy this plan as early in life as possible.

As you grow older, your lifestyle changes, liabilities as well as dependents increase (parents & children), buying a cover now makes sure your all family’s financial needs are met even when you are not around.

Even if you have crossed 50 and nearing retirement, you should invest in a term plan. In case of your demise, the pensions will stop and then your spouse and dependent children will be financially unstable.

Thus, if protecting your family’s financial future even in your absence is one of your prime concerns, you should buy one immediately irrespective of your current age.

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.

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.

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.

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.