Term Plan – Term Insurance Plan
If there are people in your family who are dependent on your income, you owe it to them to protect them from the potential loss of income in case of your death.
There are a host of Life Insurance products available of which the one that gives the maximum protection for a given amount of annual premium is term insurance. To learn how much cover you require (also called sum assured), you may use our life insurance calculator
Term insurance is ideal for those people who do not wish to mix their investment objective with a risk objective. In case the person insured survives the entire term of the policy, no money is payable to the family of the insured. But in case of death, the family of the insured person gets a very high sum assured (e.g.you can get a Rs.1 crore sum insured for 25 years at just Rs. 1000 per month for somebody who is a non tobacco user and is 30 year old ). Here is detailed comparison of term plans available today.
The most important thing to take care of while applying for term insurance (or any life insurance) policy is to disclose all personal details e.g. whether the insured person is a smoker or not, the medical history of the insured person, your existing and proposed life insurance policies, and so on. Please take time out to fill the form yourself. This will ensure that your family does not face any issues if they have to file a claim on the policy. Better still buy online as online policies are normally cheaper than those available offline.
You should also consider taking a critical illness rider on top of your base term plan wherever available. This will ensure that you get a lump sum amount if you have the misfortune of being stricken by any critical illness such as a paralytic stroke, organ failure, multiple schelorosis, etc
You can also consider taking a temporary/permanent disability rider due to an accident on top of your term policy where available.
Importance Of Term Insurance
Term Insurance provides a life insurance facility that is provided by most of the insurance company as a financial coverage but for the specific time period only. The policyholder is covered from mishaps like death during the specific time of the policy term. Term insurance covers the policyholder for a fixed period of time. For the term insurance there is no cash value and as a result, the plan is less expensive than the other regular life insurance policies. The term insurance is useful only when the policyholder is dead within the time span during which the Term Insurance policy is valid. The Term Insurance plan also offers a very high cover to the policyholder at a very minimal cost. Death is an uncertain event of life and all we can do is to be prepared for the same that is why one buys an insurance policy. But in case of the uncertain and untimely death of the policyholder, a term insurance plan is a savage and offers a financial protection to the family of the policyholder.
Term Insurance plans are available for the policyholder with a range of tenure from 5 years to up to 40 years. The best thing is that the premium amount does not change for the policyholder during the complete policy term. The policyholder can pay the premium amount as a single premium or as monthly, quarterly, semiannual, annual as per the convenience. For the policy cover, one can understand the basic rule for the coverage amount and that is at least 15 – 20 times of the annual income of the policyholder. For a safeguard of the family financially, term Insurance is a backup. A term policy is a very cost-effective measure to save your family, even if the term insurance does not promise any significant returns and there is no other add-on and additional benefits for the policyholder as they get in the normal and regular life insurance covers. But, as term Insurance is a part of the various insurance products, all of the products have their different benefits and that can result in a higher premium value amount. Any policyholder should choose the plan wisely and they should check properly whether they need a plan that hosts on various plans or if they want a term insurance plan that offers affordable premium amounts and fixed premium for the policy. So, in term insurance policyholder enjoy the benefit much more than the sum invested in the same in an easy and hustle bustle free manner.
Key Features: Term Insurance
Term life Insurance Plan protects your family even in your absence at a very affordable rate.
Covers all forms Of death
All forms of deaths are covered including the terrorist attack across the globe, wherever you go.*
Life Cover Up to 80 Years Of Age
Online claim assistance
Dedicated claim handlers available at toll free
Features & Benefits
All forms of death are covered (even terrorist attacks)*
*Note: In the event of the death of the insured by suicide within the first year of the policy or with 1 year of the date of renewal the death benefits are not applicable.
Compare Term Insurance Online
Online term plans are up-to 60% cheaper than equivalent offline plans. This is due to the fact that in online plans, agent commissions are not involved and operational costs are also lower. These benefits are passed on to the customers in the form of reduced premiums.
One needs to find out the actual amount of the life insurance amount that he or she needs for the term insurance that can cover and secure the future mishaps and daily routine important expenses. One need to well aware of the various term insurances and their benefits, PolicyX helps the customers compare and calculate the amounts for the insurance policy without any confusion easily. This is very important for an insurance holder to compare the insurance plans on PolicyX as no policy should be bought without a comparison of the essential terms and features of the insurance plan, such as maximum cover for the security of policyholder and the tenure for which the premium amount is needed to be paid. One should also check the duration of insurance policy for which the policy will secure the policyholder. Policyholder needs to check and compare the claim settlement ratio of the company from which he or she is thinking to buy a policy and if the company is serving the customers with the facility of Term Insurance since long or the company is new to the concept of term insurance. Buying term policy from PolicyX is not only convenient and safe, but policyholder will also get proper assistance and guidance, as it involves future and security of your loved ones, so it deserves your all wit and efforts in the world.
Various Features And Benefits Of Term Insurance Policy
There are various benefits of the term insurance policy and few of them are like following –
Affordable Premium Option
Term Insurance policy premium offers the customer’s lowest premium payment options. The policyholder can choose a premium amount based on the convenience. The premium can be paid in a single payment or regular plans in which premium can be paid either monthly, quarterly or annually.
Return more than the Investment
Some customer finds their self in the dilemma that with a promise of zero return on the survival of the term in the term insurance policy one should buy it or not? So the policyholder should choose the company that provides the return of the entire policy premium amount that is paid by the policyholder under the tenure of the term insurance plan. This is covered under the term return of premium plan of the company.
Insurance companies facilitate the policyholders with the choice of various term plans. The policyholder can opt for the term insurance policy as per the requirement. One can choose from the single or joint life term insurance plans. In case of a change in the marital status, the policyholder can extend the policy for the dependent spouse.
Add – on benefits
There are many benefits that are not covered by the term insurance plans for the individual. Insurance companies understand the need for the policyholder and they provide various add-on plans as per the need of the customer. Premium amount hike with the add-on in the policy that provides cover for the cases like critical illness, permanent disability, and accidental death.
The premium amounts paid for the term insurance plan in which payouts are made in the case of death are tax-free. In a legal way there are various acts of the Income Tax Act under which term insurance plan covered and thus one enjoy the tax-free benefit of the policy.
Exclusions In The Term Insurance Plans
Term insurance policies cover a lot of events and situations. The specific exclusions depend upon the type of plan and term that you choose. However, there is one exclusion:
Suicide: Suicide is an exclusion that you will find in almost all term insurance policies. Suicide will not be liable for any compensation even when it comes to group insurance. But if suicide is committed within one year by the policyholder then the company will be liable to refund 80% of the premium and all rights, benefits, and interests under this policy will nullify.
Eligibility Criterion For The Term Insurance
1. Minimum and maximum age of the policyholder need to be 18 years and 75 years respectively. It can differ as per the policy terms and conditions.
2. The sum that is assured under the term insurance policy is also calculated in the eligibility because now a day some policy companies have a fixed sum assured as minimum amount as the insured person should be capable of paying the policy premium.
3. Policyholder should be a citizen of India.
Tips To Buy Cheapest Term Plan
While comparing online term plans, you need to keep in mind certain important factors. Some of the key input variables are the term or tenure of the coverage, sum assured, etc. The thumb rule is to go for the tenure of your expected retirement age minus your current age. For example: if you are 25 years old and planning to retire at the age of 60, then ideally you should cover your family for a period of 60-35 = 25 years. The amount of coverage usually depends on your income. Most people advise going to 10-20 times of your current annual income. Other tips that can help you save money while choosing a term plan are:
When you compare term plans, look at the product features & flexibility apart from its price.
The earlier you buy the plan, the cheaper are the rates of premium. The number of years of the age greatly influences the premium amount.
Online term plans are usually cheaper than similar products in the offline category as it cuts out on intermediary commissions.
If you quit smoking, you can buy the policy at the lesser rate and lower premium.
Process Of Making Claim
Policyholder needs to file a claim depending on the requirement and the amount that will be recovered depends on the amount that was decided at the time of the policy. The claim settlement process for term Insurance is simple and one can easily avail the benefit in the hour of need. The claim process needs the insurer to inform the insurance company first of the claim. He or she can visit the nearest branch of the company with the required documents. Documents are very important for making the claim. Following are the necessary documents that are needed for the claim process –
Original insurance documents
Proof of claim
Death certificate of the policy holder
Medical record and treatment papers
Apart from the above – mentioned documents, one needs to confirm if any other document is needed from the insurance company as it depends on the nature of loss and the type of the term insurance policy of the policyholder. After the verification of all submitted documents, the claim will be honored against the Policy.
Normally, term insurance plan can be availed at a lower price when the person is at the early safe of life and young. So one should check the term insurance policy at the Rupaiya Vasool and compare pros and cons of different insurance companies like HDFC, LIC, ICICI and Bajaj Allianz before settling down for any term insurance policy.
Keep a copy of all documents submitted to the insurance company for your future reference.
Any promise made by the agent or even an official of the insurance company has no value unless it is in writing or at least on email.
So if you are basing your decision on any such promise make sure you get it in record in some form.
What is it?
A term plan is an Insurance plan which covers your life and in case of death gives the amount to your nominee assigned as per the policy and amount is equal to the amount you have taken. I.e. if you go buy a term plan of Rs 50 lac for yourself and in case you die, your nominee will be paid 50 lac .So it’s a basic life insurance cover plan which pays back only in case of death and get no returns etc. So whatever premium you pay for this plan, you will get no returns but if you die then the cover amount will be paid.
Who should buy this kind of Term Insurance Plans?
All individuals who have dependants on them financially should buy this plan. This is a must for people who are bread earners in the family and has no assets or lesser cash assets.
How much cover should I buy?
Don’t get fascinated by 1 cr -2 cr term plans. Buy what you think is right for yourself. Basic rule is if you have any loans, the cover should cover all loans and 10 years of your family current expenses. I.e. if your family is dependent on you for 30000 per month and you have loan of 20 lacs, you should take cover of 20 lac (loan) + 30000*12*10=36 lac and buy a term plan of 56 lacs which will cover your loans and expenses of the family.
What should be my tenure or how long should be my term policy?
One should go for maximum period i.e. if a plan a is covering you till 75 years go for that plan as the longer the plan, it will help cover you at old age. If a premium of a plan covering you till 60 years is lesser and some other plan is higher, one should opt for term plan which covers you till maximum age.
Online vs. Offline Term plan
The online plans are cheaper than offline as it helps insurance companies to save on distribution /broker cost so they give cheaper to customers. But if you are not comfortable for online, even buying an offline term plan is cheaper than other Insurance plans.
What is claim settlement ratio?
This is ratio which is available to people to see companies response to claims on such plan i.e. how may claims came to them and how many of them they have paid. For any company above 90% is a good enough ratio.
Should I go for Term plan with medical test or without it?
If you have got your medical test done and you know that you are perfect, choose whatever plan. But if you haven’t got it done in last six months get a medical test and that will help in anyways. But if you know that you have a diseases do not hide and take a term plan as most likely the Insurance company will pick this when you go to them for a claim in later stages.
Benefits of Term plan
1. Instant life cover
2. Extremely affordable premium
3. Hassle free process
4. Regular and single payment option
5. Available in online as well as offline mode
6. Tax benefit under sec 80C of Income tax act, 1961
Some more Facts about Term plan
1. Term plan are only the death benefit plan.
2. These are non-renewable plan once the term is over the policy will end.
3. The Premium remains same for whole tenure of the plan; it’s not going to increase with the age etc.
4. Term plan is available both online and offline the only difference is the online plan are much cheaper than its offline version. And it is not going to affect the claim settlement/rejection at any point of time.
5. Even now you are getting riders like Accidental death rider; Terminal illnesses cover etc with the online plans.
6. Almost all kind of death are covered in term only some co’s exclude death through natural calamities and suicidal death are covered only after 12 month of the policy