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  • Compare & Buy Pure Term Insurance Plans Offering High Coverage

    Life Insurance
    • Premiums as low as Rs.17/day for sum assured of Rs.1 crore*
    • Claim up to Rs. 1,50,000 deduction under section 80C**
    • Choose between annual and monthly premium payment options

    What is Term Insurance?

    Term insurance is a type of life insurance product that provides a large sum assured to the policy buyer at a relatively affordable premium. Term insurance plans can usually be purchased for a policy tenure ranging anywhere between 5 years and 40 years. The catch to this kind of life insurance is that usually it does not carry any survival or maturity benefits, unlike whole life policies or endowment/money-back policies.

    Term insurance plans are much cheaper compared to whole life insurance plans because these plans carry no cash value. Term insurance plans provide pure financial protection benefits. This means that if the life insured dies during the policy term, the beneficiary will receive the death benefit, provided all premiums are paid and the policy is in force. If the person survives until the end of the policy term, no benefits are payable to anyone.

    In most cases, term insurance plans offer a level premium rate, wherein the policyholder is charged the same premium for the duration of the policy tenure. However, in such cases the premium payable will increase during renewal of the policy based on the concerned individual’s age at the time. While the coverage provided by a term insurance policy is more or less fixed, most life insurance providers offer a number of riders that policy buyers can choose to purchase along with a term policy.
    Insurance Provider
    Features
    Highlights
    Online premium calculation
    98.39% Grievances Solved 97.11% Claim Settlement Ratio*
    No upper limit Maximum Cover (Sum Assured) 80 years Maximum Maturity Age*

    Online tracking of applications

    99.09% Grievances Solved 93.29% Claim Settlement Ratio*
    No upper limit Maximum Cover (Sum Assured) 80 years Maximum Maturity Age*
    Presence in over 75 locations in India
    99.31% Grievances Solved 89.53% Claim Settlement Ratio*
    No upper limit Maximum Cover (Sum Assured) 75 years Maximum Maturity Age*
    Exclusive plans for women and children
    99.38% Grievances Solved 97.62% Claim Settlement Ratio*
    No upper limit Maximum Cover (Sum Assured) 75 years Maximum Maturity Age*
    Claims can be registered online
    99.87% Grievances Solved 96.68% Claim Settlement Ratio*
    No upper limit Maximum Cover (Sum Assured) 75 years Maximum Maturity Age*
    Hassle-free claims settlement
    100% Grievances Solved 97.81% Claim Settlement Ratio*
    100 crores Maximum Cover (Sum Assured) 85 years Maximum Maturity Age*

    Why You Should Buy Term Insurance?

    For those who have dependents whom they look after, term plans are ideal as they provide a large payout for very cheap premiums. Individuals can choose a high sum assured while paying a low premium. This way, if the breadwinner/policyholder passes on from this life, the people who relied on them will receive a substantial amount that will help them get by financially. These plans have a set duration limit and the cover will be offered only for this period. Once the plan lapses, the holder can choose to renew it or give up all benefits. Listed below are a few reasons to purchase term insurance plans:

    • Provides financial security: The primary purpose of a life insurance policy is to provide financial security to one’s dependents. The benefit that is paid to the nominee in the event of the policyholder’s death can help one’s family members meet their short-term and long-term financial goals.
    • Helps deal with liabilities: If you have liabilities like loans or credit card debts, it is vital that you purchase a term insurance policy at the earliest. The payout provided by your policy can help your dependents clear off your liabilities without having to go through any additional hassles.
    • Highly flexible: Term insurance plans are highly flexible in nature. Most insurance providers offer term insurance plans through both online and offline channels. With regard to the policy tenure, policy buyers can choose any policy tenure between 5 years and 30/40 years. Further, prospective buyers can also choose a sum assured as per their needs.
    • Riders: Insurance providers offer a number of riders along with term insurance plans. Some of the popular riders that are offered include the Accidental Death Benefit Rider, Accidental Death and Disability Benefit Rider, Critical Illness Rider, Waiver of Premium Rider, etc. As a policy buyer, you can choose to purchase any rider offered by an insurance firm and receive an enhanced coverage.
    • Tax benefits: Term insurance plans also offer tax benefits to policy buyers and their nominees. You can claim tax rebates under Section 80C for premiums paid. Similarly, your nominee will also be able to claim tax benefits for any payouts received through the policy under Section 10(10D) of the Income Tax Act.

    How Does Term Insurance Work?

    If you apply for a term insurance plan, you will be required to pay a premium. If the life insured dies during the coverage period, then the person nominated will receive the death benefits. There are a variety of term plans in the market ranging from 1-year coverage up to 40 years. Term plans are usually renewable once the policy term ends.

    Types of Term Insurance Plans in India

    There are different types of term insurance plans. Some of the major plans are:

    • Renewable - These term plans can be renewed once the policy ends. The insured will be able to skip the medical examination. At the most, the insured will have to provide evidence or a declaration of good health in order to renew the plan.
    • Convertible - Customers have the option to exchange their policy for a cash-value policy. However, if the customer chooses to convert the term plan to a standard life insurance plan, the premiums will be higher.
    • Level - These term plans provide a fixed sum of coverage through a certain period of time. The premiums also remain stable.
    • Decreasing Term Insurance - With one of these plans, the sum assured will decrease over a period of time at a set percentage rate. This is usually at around 5% p.a. Premiums for these types of plans usually remain constant even though the sum assured decreases. These plans are suitable for those who want to secure loans.
    • Increasing Term Insurance - Working in the opposite direction of a decreasing plan, the sum assured under these plans increase by around 5% p.a. Premiums will remain constant through the plan. The sum assured increases taking into consideration rising costs of living and inflation.
    • Return of Premium - These plans are rare, but in certain cases, insurers offer a return of the premium if the policyholder survives till the end of the term. Usually, term plans do not have any survival benefits. Under these plans, the insured person will receive the premiums paid minus any fees, administrative charges, and so on.

    Eligibility Criteria for Term Insurance

    All insurance companies lay down certain requirements that individuals need to meet in order to be approved for a term plan. Some of the general requirements are listed below, however, this may vary between different insurers:

    • The minimum age at entry is 18 years.
    • The maximum age at entry is between 60 years to 70 years.
    • The maximum age at maturity is 80 years.
    • The minimum sum assured is around Rs.10 lakh.
    • The maximum sum assured is Rs.100 crore.
    • Premiums need to be paid either as a single pay, monthly, quarterly, bi-annually, or annually.

    Key Features of Term Life Insurance Plans

    Term Plans are different in nature when compared to standard life insurance policies, wherein they are specifically designed to cater to the financial needs of the family in case of death or uncertainty.The respective family members/dependants are eligible for a lump sum amount in case of death, uncertainity or any critical illness, if applied for, of the life insured during the term of the policy.Such an insurance plan can help your family to have sound financial independence, even if you are not around.

    • Survival benefit - This is a distinct feature of term plans. Most term plans do not offer a survival benefit. Only in certain cases, if you survive till the end of the plan term, you might receive a survival or maturity benefit.
    • Plan term - Term plans have a wide range of policy terms available for customers to choose according to their needs and requirements.
    • Premium payment term - This duration may be the same or lesser than the plan term depending on the insurance plan. Premium payment term is the number of years you need to pay premiums towards the policy. Sometimes, you will only need to pay for 10 years and the life insurance will cover you for 20 years.
    • Renewal - Upon the maturity of the plan, you will be given the option to renew your plan and continue to be covered under the policy.
    • Lapse - If you fail to pay your premium, after the insurer has sent reminders and the grace period is over, your insurance policy will lapse.
    • Reinstatement - If you want to reinstate or revive your old lapsed policy, you can do so by paying up all the unpaid premiums plus interest. Usually insurers allow you to reinstate your policy within 2 or 3 years from the due date of the first premium you didn’t pay.
    • Exclusions - These are the events under which the life insurance company will not pay any benefits. Usually suicide is an exclusion for the first year of the policy. Other exclusions include death due to dangerous activities, dangerous sports, and so on.
    • Free-look period - This is a period of 15 or 30 days granted to the buyer of the policy. The buyer can read the plan, review the terms and conditions. If they are not satisfied, they can return the policy and receive a refund of the premium. The insurer will deduct any charges borne to issue the policy in the first place.

    Benefits of Term Insurance

    Term plans have a number of benefits. The main benefit is that the premiums are cheap while the financial protection offered is much larger than regular plans.

    • Financial Protection – Term insurance plans are a great way to ensure that one’s dependents are financially protected, in the event of an unfortunate eventuality. With a term insurance plan, if the life assured dies while the policy is in full-force, the nominee will receive the benefit in order to live comfortably in the absence of the life insured’s income.
    • Affordable Premiums - Term plans offer a bigger umbrella at lower premium rates compared to regular life insurance plans. The premium may be payable as a single one-time payment, annual, bi-annual, quarterly or monthly payments.
    • Flexible Payouts - Term plans usually have the option to get a lump sum or get monthly income, or even get both.
    • Grace period - Insurers usually grant a period of 30 days from the due date to pay the premium. Taking into consideration that people may have their own financial expenses that are of high priority than the life insurance, insurers grant this grace period.
    • Customisable Policy Tenure - Policy tenures for term insurance plans vary between 5 years and 40 years or more. Thus, you can purchase a term insurance plan for your desired coverage period, and continue to renew it as and when the date of expiry nears.
    • Availability of Online and Offline Purchase Channels - Several insurance firms offer term insurance plans that can be purchased through both online and offline channels. Thus, you can either choose to purchase a policy through the insurer’s official website, through third-party websites, or you can directly walk into the insurer’s branch and meet with an insurance advisor who will help you purchase the right policy.
    • Option to Purchase Riders/Add-Ons – Insurance providers also offer riders that a policy buyer can purchase with their base term insurance plan. The exact riders offered will vary from plan to plan and from insurer to insurer, but purchasing a rider is a smart way to enhance your plan’s coverage.
    • Choice of Plans– All leading life insurance firms in the country offer term life insurance plans to policy buyers. Thus, based on your requirements you can opt for a suitable term life insurance policy.
    • Tax Benefits - Premiums paid towards these plans are eligible for tax deductions under Section 80C of the Income Tax Act, 1961. The benefits received from these plans are also eligible for tax benefits.

    Types of Term Insurance Payouts

    Term insurance is the purest form of life insurance. These plans usually offer a pure risk cover on the life of the policyholder. If the policyholder succumbs to an untimely death during the policy term, a death benefit will be paid to the nominee. In terms of the death benefit payout, many insurers currently offer a number of payment options to policyholders, thus ensuring that the policy buyer is able to choose a payout option that is well-suited to the needs of his/her family.

    Some of the popular term insurance payout options are:

    • Lump Sum Payout:Most traditional term insurance policies will pay the death benefit amount in a lump sum manner to the policyholder’s dependents in the event of the policyholder’s death. This is best payout option if your dependents are well aware of the various investment options and how to best invest the amount that they receive.
    • Monthly Income:Under certain term insurance policies, policy buyers can opt for a monthly income payout option. In this case, the death benefit amount will be paid in instalments for a certain number of years. Variations of this option include the Lump Sum + Monthly Income option, Lump Sum + Increasing Monthly Income option, etc.
    • Return of Premium:TROP plans, a sub-type of term insurance, returns the total sum of the premiums paid during the policy tenure to the policyholder at the end of the policy term. Thus, these plans act as a protection-cum-savings instrument. The death benefit payout options for TROP plans are the same as the options provided for regular term insurance plans.

    Term Insurance Plans Available in India

    A term insurance policy is a must-have if you want to ensure that your loved ones are always financially secure. Make sure to research various term insurance plans that are being offered, compare features and benefits of these plans, and opt for a policy that offers you coverage as per your needs.Refer to the Term Insurance Plans comparision chart provided below to choose from an extensive array of life term plans to suit your needs:

    Term Plan Entry Age Maturity Age Policy Term Premium Payment Option Minimum sum Assured Payout Type Claim Settlement Ratio(FY 16-17)
    ICICI Prudential iProtect Smart Plan 18 years to 65 years 23 years to 75 years As per policy brochure Single pay, duration of plan or 5-year limited pay. Payments can be made monthly, half-yearly or yearly Subject to minimum premium of Rs.2,400 p.a. (excluding taxes) Lump sum or monthly income for 10 years 96.68%
    HDFC Life click2Protect Plus 18 years to 65 years 28 years to 75 years 10 years to 40 years Single pay, duration of plan or 5-year limited pay. Payments can be made monthly, quarterly, half-yearly or yearly Rs.25 lakh Lump sum + optional monthly income over a period of either 10 or 15 years 97.62%
    Max Life Online Term Plan Plus 18 years to 60 years 85 years 10 years to 50 years (applicable to base plan) Equal to plan term Rs.25 lakh Lump sum + optional monthly income/increasing monthly income over a period of 10 years 97.81%
    Aegon Life iTerm Plan 18 years to 65 years 100 years 5 years to 62 years (or up to the age of 100 years) Equal to plan term. Payable monthly, half-yearly or yearly Rs.25 lakh Lump sum + optional monthly income for 100 months 97.11%
    PNB MetLife Mera Term Plan 18 years to 65 years 99 years for all options except the Joint Life Cover option.Maximum maturity age is 75 years for the Joint Life Cover option 81 years for all options except the Joint Life Cover option.75 years for the Joint Life Cover option Equal to plan term Rs.10 lakh Lump sum + choose to receive monthly income/increasing monthly income or monthly income till child turns 21 years 87.14%
    Canara HSBC OBC iSelect Term Plan 18 years to 70 years 80 years 5 years to 40 years Equal to plan term. Payable monthly or annually Rs.25 lakhs Lump sum + optional monthly income 94.95%
    LIC e-term Plan 18 years to 60 years 75 years 10 years to 35 years Annual Rs.25 lakhs / Rs.50 lakhs for non-smoker Lump sum 98.31%
    SBI Life eShield Plan 18 years to 60/65 years (based on the type of cover) 75 years for Level Cover Benefit and 70 years for Increasing Cover Benefit 5 years to 30 years Equal to policy term, payable annually Rs.35 lakhs Lump sum 96.69%

    ICICI Prudential iProtect Smart Plan

    Term Insurance Plans
    Term Insurance

    The iProtect Smart Plan from ICICI Prudential is a term insurance policy that offers comprehensive protection to the life assured. This plan offers life cover payable as a lump sum death benefit, or customers can choose to get a monthly income for 10 years after the demise of the policyholder. Anyone between the age of 18 years to 65 years can apply for this plan with a minimum tenure of 5 years. Customers can choose to pay the premiums as monthly, half-yearly or yearly. The minimum premium required for this plan is Rs.2,400 p.a. (excluding taxes).

    The minimum sum assured under this plan is subject to the minimum premium, with no limit on the maximum sum assured. This policy comes with four plan options, i.e., the Life option, Life Plus option, Life and Health option, and the All in One option. The policy provides varying benefits under different plan options, thus helping you opt for a plan option that is perfectly suited to your needs. This policy comes with the provision of providing life cover to policyholders up to the age of 75 years. Further, the policy also comes with the option of providing coverage for up to 34 critical illnesses.

    HDFC Life Click2Protect Plus Plan

    The Click2Protect Plus Plan from HDFC Life is a non-participating, non-linked, term insurance policy that provides a comprehensive life cover to the policy buyer at an affordable cost. This policy comes with a choice of coverage options. In order to purchase this policy, policy buyers will need to be between the age of 18 years and 65 years. The maximum maturity age for this policy is 75 years.

    This plan provides optimum coverage with options of either a lump sum benefit, or a lump sum benefit plus monthly income for the beneficiary after the demise of the policyholder. Customers can opt to pay premiums for the duration of the plan, for 5 years or in one single premium. The minimum sum assured under this plan is Rs.25 lakh.

    Max Life Online Term Plan Plus Plan

    The Max Life Online Term Plan Plus comes in three plan variants – the Basic Life Cover option, the Life Cover + Monthly Income option, and the Life Cover + Increasing Monthly Income option. This term plan is ideal for anyone between the age of 18 years and 60 years. With premium payments equal to the term of the plan, customers can opt for a minimum coverage of Rs.25 lakhs, and a maximum coverage of Rs.100 crore.

    If the policyholder dies during the term, then the nominee will be entitled to a lump sum benefit and/or monthly income and/or monthly increasing income for 10 years. For the base plan, the policy buyer can opt for a policy term between 10 years and 50 years. The maximum maturity age for all three plan variants is 85 years. Policyholders can also choose to purchase riders offered by Max Life Insurance along with this policy.

    Aegon Life iTerm Plan

    Aegon Life offers its iTerm Plan to individuals who are between the age of 18 years and 65 years. This policy can be purchased online, and the minimum sum assured that one can opt for is Rs.25 lakh. The payout upon the demise of the policyholder can either be a lump sum benefit or a lump sum plus monthly income for a period of 100 years. The maximum maturity age for this plan is 100 years.

    Premiums towards this policy can be paid as a one-time lump sum amount, or on an annual, bi-annual, or monthly basis. This plan also comes with an Inbuilt Terminal Illness Benefit, thus providing the policyholder a guaranteed benefit in case he/she is diagnosed with a terminal illness. The insurer also offers preferential premium rates to women and non-smokers. A policy buyer can also opt for additional riders along with this plan to enhance the coverage of the base policy.

    PNB MetLife Mera Term Plan

    The Mera Term Plan from PNB MetLife is a term insurance policy that provides the policyholder customisable protection. With PNB Metlife, customers have an array of payout options that include: Lump sum / Lump sum + monthly income / Lump sum + monthly increasing income / Lump sum + monthly income till the child attains the age of 21 years. This policy also comes with an optional Joint Life Benefit. Policyholders are also provided the choice to increase their coverage amount during certain key milestones in their lives.

    In order to purchase this policy, the policy buyer needs to be between the age of 18 years and 65 years. The maximum maturity age for all options, except the Joint Life Cover option, is 99 years. If you choose the Joint Life Cover option, the maximum maturity age is 75 years. Customers can secure financial protection for their loved ones for a minimum sum assured of Rs.10 lakh.

    Canara HSBC OBC iSelect Term Plan

    The iSelect Term Plan from Canara HSBC OBC Life Insurance is a non-participating, non-linked, term insurance policy that is available to those between the ages of 18 years and 70 years. The maximum maturity age under this plan is 80 years. Customers can opt for terms of 5 years to 40 years with a premium payment term that is equal to policy term. Customers will benefit from a minimum sum assured of Rs.25 lakhs.

    This plan offers the policyholder a cover against death and also against terminal illnesses. Further, a policy buyer can choose to enhance this policy by purchasing the Accidental Death and Accidental Total and Permanent Disability rider, which will provide an additional benefit in case the life assured meets with an accident. Lower premium rates are offered to women and non-tobacco users.

    LIC e-term Plan

    LIC offers its e-Term Plan to individuals between the age of 18 years and 60 years. Customers are required to pay the premium annually and in return will receive a minimum death benefit of Rs.25 lakhs if the policyholder dies during the policy term. Individuals who belong to the non-smoker category can opt for a minimum sum assured of Rs.50 lakh.

    When purchasing this policy, the policy buyer can opt for a policy term between 10 and 35 years. The maximum maturity age for this plan is restricted to 75 years. The policyholder will have to pay the due premiums on a yearly basis, for the duration of the policy tenure. This policy is solely available through online channels. The insurer will only consider insurance applications/proposals made by policy buyers on their own lives. Further, preferential premium rates are offered to non-smokers.

    SBI Life eShield Plan

    SBI Life’s term plan, eShield, is an individual, non-participating, non-linked, pure term insurance plan that is available online on the insurer’s official website. This plan offers a minimum sum assured of Rs.35 lakhs as a lump sum benefit payable to the nominee upon the demise of the policyholder. In order to purchase this policy, the policy buyer will need to be over the age of 18 years.The maximum entry age is 65 years for the Level Cover and 60 years for the Increasing Cover.

    Premiums can be paid on an annual, bi-annual, or monthly basis. The minimum policy tenure that should be opted for at the time of purchasing the policy is 5 years for the Level Cover and 10 years for the Increasing Cover. The maximum policy tenure that can be chosen is 30 years. The premium payment term will be the same as the policy term.

     

    • Myths Busted About Term Life Insurance

      Term insurance is one of the purest forms of insurance that one may purchase. The aim of having term insurance is to ensure that the future of your loved ones is safe and secure even if you are not around in the future. The nominee gets paid a lump-sum amount called the death benefit in case of your sudden demise and the term insurance policy ceases to exist.

      However, due to the lack of information regarding term insurance policy, there are various misconceptions people have harboured over a period of time. This prevents people from buying a term insurance policy for themselves and ultimately missing out on the benefit of having one.

      Some of the myths about term insurance are given below:

      • Purchasing term insurance online is difficult: Many people, especially those who are not very tech savvy and are not too familiar with the internet, believe that purchasing term insurance is difficult. They believe that the process is long and takes a lot of time just like it takes when they purchase a policy offline. Today, purchasing not only term insurance but any type of insurance policy online has become very simple. Insurers have ensured that the process of buying term insurance is simple, user-friendly, and hassle-free in nature. Today it takes only a few minutes for a person to buy term insurance online.
      • Your claim cannot be settled if the term insurance policy is purchased online: People often believe that their claim may not get settled if they purchase their term insurance online. When you purchase a term insurance policy online, you go through the specific process of buying one and paying directly to the insurance company. When it comes to settling your claims, the insurance company settles your claim only after taking you through various verification and eligibility processes. Your claim may get rejected on the lines only if you have failed to provide correct information or did not abide by the guidelines mentioned in the policy document. If you furnish the information required correctly, an insurance company has no reasons to reject your claims.
      • You cannot cancel your policy if purchased online: When you purchase a term insurance plan online, you can access all the information online. Regardless of whether you purchase a term insurance online or offline, the insurance company provides you with a free-look period during which if you are not satisfied with the terms and conditions of the plan, you can easily cancel your policy free of cost. The process of cancelling your policy is seamless in nature. All the help is available online and you can hence cancel/return your policy in a hassle-free nature.
      • Your payment and personal information are not secure online: It is always recommended that you purchase your term insurance policy either from the official website of the insurance company or from genuine third-party companies. Recheck and confirm the link to check whether the website is genuine in nature or not. One of the ways to ensure that the website is not fake is to see if the URL has https:// embedded to the URL or not. Insurance companies and genuine third-party companies take a lot of care regarding your payment and personal information and do not share it with any other party. You can always contact the insurance company or the third-party company in case of any doubt and get your doubts resolved instantly.
      • You do not enjoy returns after purchasing term insurance online: You may not purchase a term insurance policy since you do not get to enjoy any returns on it. Term insurance does not invest your money and hence there are no returns. However, you have the peace of mind knowing that in case something happens to you, your family will receive the death benefit which will help them take care of any financial liabilities. The premium you will pay is also extremely cheap and affordable and thinking long term, it is a great investment considering that you can get high covers by paying affordable premiums. Your life is precious and there can be no greater investment than insuring it.
      • You cannot increase your cover: Yes, you can. There is a type of term insurance policy called increasing term insurance, where you have the option of increasing your cover amount as you grow in age.
      • You have a group term policy, you don’t need a private term plan: Your employer provides you with a group insurance policy. Is it enough? You are only eligible to receive its benefits till the time you are a part of the company. Once you resign or retire, you are no longer eligible to receive any benefits. Also, the cover amount may not be sufficient since it is fixed and you may have to pay slightly extra in order to upgrade your cover amount. It is better to purchase a personal term insurance policy and ensure that regardless whether you are working or not, the future of your family is secured even if you are not around in the future.
      • You must be young to purchase term insurance: You can purchase term insurance even if you are not young enough. Of course, the premiums will vary and might be slightly expensive when you purchase a term insurance policy at the age of 50 as compared to when you buy one at the age of 25. There are various insurance companies that provide term insurance policies up to the age of 65, however they come with a lot of terms and conditions. Although it is always recommended that you purchase term insurance when you are young, you can purchase a policy later in your life as well.

       

      Hence, term insurance is a brilliant instrument that you can avail. You may not know much about term insurance since people prefer more popular options such as ULIPs, endowment policies, money back plans etc. Also, one of the major problems is that people often buy term insurance only to save on tax and thus in the process end up with wrong plans which come back to affect them. Term insurance is the purest form of insurance you can come across and you can purchase it just like any other plan. It is important to understand that you must buy term insurance only as per your needs and requirement and only after comparing and researching should you buy term insurance for yourself.

     

    • PAN and Aadhaar to be linked with Insurance Policies

        The Insurance Regulatory and Development Authority of India (IRDAI) has made it compulsory for policyholders to link their insurance policy with their Aadhaar and PAN by 31 March 2018. The regulator has also said that since these directions have statutory force, all life, general, and standalone health insurance firms will have to implement these rules without any further instruction.

        Thus, insurance companies have been sending reminders and notifications to policyholders to link their PAN and Aadhaar numbers with their policies. As a policyholder, you can choose to link your Aadhaar and PAN with your insurance policy through both online and offline channels.

      • Online Linking: If you are a registered user, you can log into the ‘Customer Portal’ on the insurer’s website and update your Aadhaar number and PAN. Certain insurance firms also make a provision for you to link your particulars without logging in by simply navigating to the website and keying-in certain details, such as your policy ID, Aadhaar number, PAN, date of birth, contact information, etc. After you have furnished your PAN and Aadhaar number to the insurer on the website, an OTP (one-time password) will be sent to your registered mobile number. You will have to enter this number on the insurer’s website to complete the linking process.

      • Offline Linking: You can also choose to link your Aadhaar and PAN with your insurance policy through offline channels. Thus, you will have to contact your insurance agent or visit the nearest office of your insurer with all relevant documents, including a self-attested copy of your Aadhaar. You can submit these documents to an insurance representative and get your policy linked.

      • Things to Note

      • Currently, all new policy buyers are required to submit their Aadhaar number at the time of purchasing the policy.

      • In case a policyholder does not have a PAN, he/she can furnish a copy of Form 60 to meet this requirement.

      • In order to successfully link your policy with your Aadhaar number, your mobile number will have to be registered in the Aadhaar database.

      • Linking your Aadhaar and PAN to your insurance policy will prevent malpractices. Further, it also makes the administration process simpler.

    Term Insurance Premiums Explained

    Term Insurance is very simple to understand. You purchase a term insurance plan which promises to provide you cover for a certain period of time. You pay premiums in order to keep the policy in force, and in case if something happens to you, the insurer will pay the nominee a lump-sum amount called the death benefit and the policy ceases to exist.

    Premium payment mode

    There are two modes of payment one can come across from a premium payment point of view. They are:

    • Regular policies premiums:If you have availed a policy term where the mode of premium payment is regular, it means that you will pay your premiums in installments during a particular interval of time - which can be on a monthly, half-yearly, quarterly, or on a yearly basis.
    • Single policies premiums:If you have availed a policy term where the mode of premium payment is single in nature, it means that you will pay your premium only once. You generally pay a lump-sum amount during the inception of the policy in return in exchange for protection.

    Premium payment term

    Premium payment term is nothing but the period of time for which you will be required to pay your premiums.

    Premium payment frequency

    Premium payment frequency is the number of times you will have to pay your premiums in a policy year. For a single term policy, the number of times you will pay your premiums will only be one, which will be at the inception of the policy. If you are availing a regular term policy then you can choose to pay your premiums on a monthly, half-yearly, quarterly, or on a yearly basis.

    Why is a term insurance premium cheaper as compared to a whole life insurance premium?

    Premiums form an important part of your policy. The premium you pay will depend on various factors such as your age, policy term, premium payment term, etc. However, one of the questions which is often raised is why is term insurance premium cheaper as compared to a whole life insurance premium?

    The reason a term insurance premium is cheaper as compared to the premium of a whole life insurance policy is that term insurance covers you for a limited period of time and is likely to end before you die as compared to whole life insurance which provides you coverage for your whole life as the name suggests. Thus, the premium paid in case of term insurance is utilised to pay you a lump-sum amount called the death benefit in case of your death. Whereas, the premium paid by you in case you have purchased a whole life insurance is utilised not only to pay you the death benefit in the event of your death but also pay you a lump-sum amount called the maturity benefit in case you survive the policy term.

    Apart from that, there are various types of insurance products such as ULIP which not only utilises a part of your premiums to provide you cover, but also uses the rest for investment purposes i.e. a part of the premiums paid by you is invested by the insurer in various market instruments which helps in the maximisation of your savings.

    Best Term Insurance Plans With Rs.1 Crore Coverage

    1. ICICI Pru iCare II Term Insurance Plan: The iCare II Plan from ICICI Prudential Life provides financial security to your family in the event of an untimely death, thus ensuring that your family has the means to carry on with their lives even in your absence.
    2. Key Features of ICICI Pru iCare II Term Insurance Plan:

      • Policyholders can choose a protection cover as per their needs.
      • This policy can be purchased by prospective policy buyers between the ages of 18 years and 60 years.
      • Policy buyers can choose to pay their premium as a lump sum amount or in regular instalments throughout the policy tenure.
      • The policy will provide insurance coverage to the policyholder until he/she attains the age of 65 years.
      • The minimum premium payable for this policy is Rs.2,400.
      • Tax benefits can be availed under Section 80C and Section 10(10D) of the Income Tax Act.
    3. HDFC Life Click2Protect 3D Plus Plan: This is a non-participating, non-linked, pure term insurance policy that provides financial protection to one’s family at an affordable price.
    4. Key Features of the HDFC Life Click2Protect 3D Plus Plan:

      • The insurer provides 9 plan options to the policy buyer.
      • Differential premium rates are offered to non-tobacco users and women.
      • Policyholders can increase their coverage during key milestones of their lives.
      • Tax benefits can be availed as per the prevailing tax laws.
    5. Aviva i-Life Plan: The i-Life Plan from Aviva Life Insurance is an affordable term insurance plan that can be purchased online, through Aviva’s official website.
    6. Key Features of the Aviva i-Life Plan:

      • This policy can be purchased by any individual between 18 years and 55 years of age.
      • The maximum maturity age for this policy is 70 years.
      • Premiums towards this policy can be paid on a half-yearly or yearly basis.
      • The insurer offers a rebate if the policy buyer opts for a large sum assured.
      • Tax benefits can also be availed in addition to the other plan benefits.
    7. Max Life Insurance Online Term Plan Plus - Basic Life Cover + Monthly Income: This is a non-participating, non-linked, term insurance policy that provides policy buyers a choice of 3 death benefit payout options.
    8. Key Features of the Max Life Insurance Online Term Plan Plus - Basic Life Cover + Monthly Income:

      • The insurer offers policy buyers the option to pay their due premiums up to the age of 60 years and enjoy coverage till the end of the policy tenure.
      • Policy buyers can purchase additional riders along with the base plan.
      • The insurer offers policyholders a reward for maintaining a healthy lifestyle.
      • Lower premium rates are offered for female lives.
      • The maximum maturity age for this policy is 85 years.
      • The minimum and maximum premium payable for this policy are Rs.2,200 and Rs.2,18,44,600, respectively.
    9. SBI Life - eShield Plan: The SBI Life – eShield Plan is a non-linked, individual, non-participating, pure term insurance policy that prospective customers can purchase through online channels. This policy offers a comprehensive coverage to the policy buyer at an affordable cost.
    10. Key Features of the SBI Life – eShield Plan:

      • This policy comes with two plan options – level cover option and an increasing cover option.
      • To purchase this plan, the policy buyer will have to be over the age of 18 years.
      • The minimum premium payable for this policy is Rs.2,779 under the annual premium payment mode. For half-yearly and monthly payment mode, the minimum premium payable will be Rs.1,418 and Rs.237, respectively.
      • Policy buyers can customize their policy with add-ons or riders.
    Plan Name Sum Assured Policy Tenure Age at Entry
    ICICI Pru iCare II Term Insurance Plan
    • Minimum Sum Assured: As per policy brochure
    • Maximum Sum Assured: Unlimited
    • Regular Pay Policies: 5/10/15/20/25/30 years
    • One Pay Policies: 5/10 years
    18 – 60 years
    HDFC Life Click2Protect 3D Plus Plan
    • Minimum Sum Assured: Rs.10 lakh
    • Maximum Sum Assured: No limit
    • Life Long Protection and 3D Life Long Protection variants: Whole life policies
    • Other variants: 5 – 40 years
    • Life Long Protection and 3D Life Long Protection variants: 25 years – 65 years
    • Other variants: 18 years – 65 years
    Aviva i-Life Plan
    • Minimum Base Sum Assured: Rs.25 lakh
    • Maximum Base Sum Assured: No Limit
    10 – 35 years 18-55 years
    Max Life Insurance Online Term Plan Plus
    • Minimum Base Sum Assured: Rs.25 lakh
    • Maximum Base Sum Assured: Rs.100 crore
    10-50 years Minimum entry age is 18 years and above
    SBI Life - eShield Plan
    • Minimum Sum Assured: Rs.35 lakh
    • Maximum Sum Assured: No limit
    • Minimum Policy Term:
      • For Level Cover: 5 years
      • For Increasing Cover 10 years
    • Maximum Policy Term: 30 years
  • Minimum Age at Entry: 18 years
  • Maximum Age at Entry: 65 years for the Level Cover and 60 years for the Increasing Cover
  • Best Term Insurance Providers in India with the Highest Claims Settlement Ratios

    The claim settlement ratio refers to the total number of death claims that the insurance provider has paid against the total number of death claims received by them in a given financial year. A high claim settlement ratio is desirable since it indicates the insurer’s willingness to settle claims, and will, thus, ensure that your nominee doesn’t have to face any undue hassles during the claim settlement process.

    If you are looking to purchase a life insurance policy, it is highly advisable to check the claim settlement ratio of various companies, since it is a good indicator of the insurance firm’s ability to settle received claims. The Insurance Regulatory and Development Authority of India (IRDAI) publishes the claim settlement ratios of various life insurance companies in their annual report. We have listed the claim settlement ratios of various term insurance providers in the table below.

    Insurance Provider Claims Settlement Ratio Claims Received Claims Paid
    LIC 98.31% 769386 756399
    SBI Life 96.69% 17610 17027
    ICICI Prudential 96.68% 10901 10539
    HDFC Standard 97.62% 12724 12421
    Bajaj Allianz 91.67% 16239 14887
    Max Life 97.81% 9821 9606
    Birla Sun Life 94.69% 6048 5727
    Kotak Mahindra 91.24% 2831 2583
    Reliance Nippon 94.53% 11079 10473
    IndiaFirst Life 82.65% 1741 1439
    PNB MetLife 87.14% 3879 3380
    Tata AIA 96.01% 2707 2599
    DHFL Pramerica 90.87% 471 428
    Shriram Life 63.53% 2926 1859
    Star Union Dai-ichi 84.05% 1473 1238
    Exide Life 96.40% 653 620
    IDBI Federal 90.33% 1065 962
    Bharti AXA 92.37% 878 811
    Exide Life 96.40% 653 620
    Aviva Life Insurance 90.60% 1245 1128
    Future Generali 89.53% 1366 1223
    Edelweiss Tokio 93.29% 164 153
    Aegon Life 97.11% 588 571
    Sahara Life 90.21% 725 654

    “The data listed above is as per the report released by IRDAI (2016-17).”

     

    Term Plan Benefits
    Term Plan Benefits

    Loan Against Term Life Insurance Policy

    Insurance providers offer life insurance plans with a varied range of benefits in order to make these policies seem like an attractive investment option to policy buyers. While the primary purpose of a life insurance policy is to provide financial security to the policyholder’s dependents in case of an unfortunate eventuality, these plans can also sometimes serve as a savings/investment tool and can even provide funds if you are in need of emergency liquidity.

    The key benefit of availing a loan against your life insurance policy is that the interest rates are typically not as high as the interest levied on personal loans and credit card loans. However, before you decide to avail a loan against your insurance policy, here a few points that you will have to keep in mind.

    Eligibility Criteria

    Firstly, it is essential to check if you are eligible to avail a loan against your insurance policy. Not all life insurance policies offer this benefit to policyholders. In most cases, if your life insurance plan doesn’t acquire a cash value, you will not be able to avail a loan against it. Thus, you cannot take a loan against a term insurance policy. On the other hand, other insurance policies such as money-back plans, endowment plans, whole life plans, etc. will allow policyholders to take a loan against the policy after the policy has acquired a surrender value. Life insurance policies only acquire a surrender value if the policyholder has paid all due premiums for a period of 2-3 years without missing any premium payments. Thus, before you even consider taking a loan against your policy, make sure to read through the brochure or log into your insurer’s Customer Portal to check if you are eligible to opt for a loan.

    Loan Amount and Interest Rate

    While insurance providers give you the option of taking a loan against your policy after it has acquired a surrender value, they will seldom provide you the full surrender value as the loan amount. In most cases, the amount that you will be eligible to avail will be a certain percentage of the policy’s surrender value – typically between 60% - 85%. One of the benefits of taking a loan against an insurance policy is that since you are borrowing from the policy’s surrender value, the loan amount you receive will not be considered as a source of income, thus you will not be taxed for this. Once you take a loan against your insurance policy, the rights of your plan will be effectively transferred to whoever the lender is. Since this is a loan, you will also have to pay an interest on the amount borrowed. The rate of interest that you will be charged will vary from lender to lender. However, in most cases, lenders or insurance companies charge an interest between 10% and 15%

    Repayment of Loan

    Just like a regular loan, you will need to repay your loan amount to the insurance company during the policy tenure. The terms and conditions for repayment of loans will vary slightly based on the insurance provider, and this will be communicated to you at the time of taking the loan. However, in most cases, lenders give policyholders the option to pay back the interest alone or the interest and principal amount as regular installments. If you choose to only pay the interest on your loan, you will have to remember that the principal loan amount will be deducted from the death/maturity benefit payout, whenever it happens. Thus, it is advisable to pay both the principal and interest and repay your loan in order to keep your policy’s cash value intact.

    Things to consider before availing a loan against your policy

    Most individuals remain unaware of the many benefits of taking a loan against their insurance policy. Since you are essentially borrowing from the payout that you are eligible to receive from the insurer, the interest rate that is levied is usually lesser than the interest that you will have to pay for a personal loan. Also, the documentation process for loans taken against life insurance policies is also simpler and more hassle-free.

    That being said, it is vital that you keep in mind the actual purpose of purchasing the life insurance policy. Life insurance policies can safeguard your dependents financially and ensure that they have the financial means to carry on with their lives in case of an unfortunate and untimely eventuality. Thus, since you are borrowing from the policy when taking a loan, you are essentially putting the financial security of your loved ones at risk. If you take a loan and happen to pass away before repayment of the dues, your insurance provider will simply deduct the pending amount from the death benefit and pay only what is left of the death benefit to your nominee.

    Thus, before you take a loan against your life insurance, make sure to carefully consider the pros and cons of your decision and talk to an insurance advisor to understand the terms and conditions of your loan.

    Term Life Insurance Covers Sponsored by the Government of India

    The Central Government of India sponsors various social security schemes, including pension covers, health schemes, crop insurance schemes, etc., for the benefit of the economically underprivileged sections of society. These schemes were launched in order to provide financial security to the masses at a nominal cost.

    The government also offers certain term life insurance schemes, by way of which policy buyers can safeguard their dependents financially. A term insurance plan, which is one of the most basic types of life insurance coverage, offers a significant sum assured to the policy buyer at an affordable price. Listed below are the various term/life insurance schemes offered by the Government of India, along with their key features and benefits.

    1. Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY): The Pradhan Mantri Jeevan Jyoti Bima Yojana is a non-participating, non-linked term insurance policy that can be renewed on an annual basis by policyholders.
    2. Key features of the Pradhan Mantri Jeevan Jyoti Bima Yojana:

      • This policy offers a life cover of Rs.2 lakh.
      • The premium charged for this plan is Rs.330 per annum.
      • Policy buyers are not required to undergo a medical examination in order to purchase this policy.
      • Individuals between 18 years and 50 years can purchase this policy.
      • Tax benefits can be availed as per the prevailing tax laws.
    3. Pradhan Mantri Jan-Dhan Yojana (PMJDY): The Pradhan Mantri Jan-Dhan Yojana scheme aims to provide access to certain key financial services to policy buyers in a convenient and affordable manner. Further, this scheme also provides a life cover of Rs.30,000 and accidental insurance cover for Rs.1 lakh.
    4. Key features of the Pradhan Mantri Jan-Dhan Yojana:

      • Savings bank accounts opened under the PMJDY scheme can be opened with zero balance.
      • Members will receive an interest on their deposit.
      • Members will be provided an overdraft facility six months after opening and successfully operating their account.
      • Upon the death of the policyholder, a sum of Rs.30,000 will be provided to the nominee.
    5. Aam Aadmi Bima Yojana: The Aam Aadmi Bima Yojana was formed as a merger of two social security schemes, namely the Aam Aadmi Bima Yojana and the Janashree Bima Yojana, which previously existed. This scheme provides a life cover of Rs.30,000 per life to enrolled members.
    6. Key Features of the Aam Aadmi Bima Yojana:

      • To subscribe to this scheme, members need to be between 18 years and 59 years.
      • The initial premium that will be charged for this scheme is Rs.200, out of which 50% of the premium amount will be subsidised from the Social Security Fund.
      • In case of the untimely death of the policyholder, the nominee will receive Rs.30,00 as the death benefit.
      • This scheme also provides accidental death/disability benefits and a scholarship benefit.

    Government-backed schemes offer a range of benefits at an affordable price to policy buyers. Make sure to walk into the nearest insurance office or research online for more details about the various term insurance schemes offered by the government.

    Income Tax Benefits That Can Be Claimed from Term Life Insurance Policies

    Life insurance plans offer a risk cover against death on the life of the policyholder, and thereby provide financial security to the policyholder’s dependents in case of an unfortunate eventuality. While there is a range of life insurance solutions with varied benefits and features, these policies also provide tax benefits to the policy buyer. Read on to know more about how you can save on tax with a life insurance plan:

    • Tax Deduction under Section 80C: As a policyholder, you can claim tax benefits up to a sum of Rs.1.5 lakh in a given financial year, under Section 80C of the Income Tax Act, for the premiums that you pay towards maintaining your policy.
    • Tax Deduction under Section 80U or Section 80DDB: Individuals who have purchased their policy before 1 April 2013 can claim tax benefits on premiums paid for the life insurance policy of an individual suffering from a disability.
    • Tax Deduction under Section 80CCC: Individuals who have purchased annuity plans can avail tax benefits under Section 80CCC of the Income Tax Act. However, one should ensure that the tax deduction claimed does not exceed a total of Rs.1.5 lakh under Section 80C, 80CCC, and 80CCD(1).
    • Tax Deduction under Section 10(10A): Policyholders can claim tax rebates under Section 10(10A) for any lump sum amount that they may receive through pension plans.
    • Tax Deduction under Section 10(10D): Your maturity/death benefit is also exempt from tax, as per Section 10(10D) of the Income Tax Act.

     

    • NOT TO BE MISSED..

      Term insurance and ULIP looks good to rule the insurance industry

      The Indian insurance industry is going through a roller coaster ride. Despite the structural growth experienced by the industry is promising, there are certain risks which can stop the industry from gaining profits. Higher surrender penalty and pricing in credit protect are some of the reasons which will keep the insurance industry on its toes.

      It is believed that a majority of new business profits comes from surrender charges. If a high penalty is implied, it means that the policyholder will experience more capital loss even if they surrender at the end of the fifth year. A ULIP does not have such risks associated with it and shows that a person is better off purchasing a ULIP. The fact that policyholders experiencing loss due to high charges is a concern to which the IRDA is looking into.

      It is also a common misconception that the insurance industry hasn’t penetrated to the level it is capable of. This fact is incorrect as LIC is one brilliant example and has existed for over 60 years. More than 50% of people who can afford getting insured have an insurance plan. The only concern is that the average cover amount is only Rs.3 lakh for each policy. It is also expected that the new business premium will grow at 15%.

      It is believed that regular suppression of credit life is bound to happen since higher prices mean that the policyholder does not get their value for money. Credit life has been one of the fastest growing segment and has contributed to the value new business (VNB) growing between 4% to 13% and more private players are expected to throw in their hats into the ring. This has resulted in more competition and the cost of distribution rising significantly.

      It is also believed that in the relative future, the private players will be more interested in term insurance and ULIP. The latter easily offers more proposition due to strict cap on surrender charges.

      Players with strong banking networks will continue to grow. The popularity of standardised insurance schemes and banks stake in different insurance subsidiary will ensure that bancassurer players continue to flourish better than the overall insurance industry despite the latter being expected to grow at a rate of 15%.

      Backdating in Term Life Insurance – Should you consider it?

      In life insurance, the premium that is charged for an insurance policy is linked to certain factors such as an individual’s age at entry, policy tenure, sum assured, etc. Thus, the older you are, the more you will have to pay for an insurance policy. That being said, you can also choose to backdate your life insurance policy if you wish to reduce the premium payable.

      Essentially, when you backdate a life insurance policy, you are altering the policy’s date of issue. Backdating is a completely legal practice in the life insurance sector and insurance policies can be backdated by a few weeks or months, as per the policyholder’s requirement.

      When should you backdate a life insurance policy?

      While backdating is an extremely attractive option, you should keep in mind that not all life insurance policies can be backdated. Most insurers, for example, do not offer this option for ULIPs since the returns that you receive from a ULIP are market-linked. Further, backdating is also not free. When you backdate an insurance policy, you will need to pay the due premiums for the backdated period.

      Certain insurance companies might also charge the policyholder an interest if the insurance policy is backdated by over a month. Thus, before you choose to backdate your life insurance policy, you will need to assess whether the benefits of doing so outweigh the possible expenses that you might have to incur. Listed below are a few instances when backdating a life insurance policy might prove to be useful:

      • To reduce the premium payable: Life insurance companies usually determine the premium quote on the basis of one’s last birthday. As you age, your premium payable will increase significantly every year. Thus, for example, if you are purchasing your policy soon after your 45th birthday, you can backdate your policy by a few months and pay a lower premium.
      • To coincide with a significant date: Many individuals like to purchase life insurance plans to coincide with significant dates in their lives, such as the birthday of a child, an anniversary, etc. However, it might not always be possible to purchase the policy on the exact date of your choice. Thus, in such cases, policyholders can backdate their policy to coincide with a certain date.
      • To claim tax benefits: While the primary purpose of a life insurance policy is to provide financial security to a policyholder’s dependents, life insurance policies are also an efficient tax-saving instrument. Thus, if you are nearing the end of a fiscal year and are looking to invest in a financial product that also provides tax benefits, you can purchase a life insurance policy and backdate it. In this case, you will be able to pay the due premium for the current fiscal year in a lump sum and pay premiums for the following years in instalments as per your chosen premium payment mode.
      • To claim the benefits of a policy on an earlier date: If you have a money-back policy or a policy that provides guaranteed benefits, you can backdate the policy if you want to receive the first benefit payout on an earlier date. This is especially useful if you anticipate a need for funds.

       

      Things to consider before backdating an insurance policy

      It is a fairly common practice to backdate life insurance policies. However, there are certain things you should consider before you backdate your policy.

      • Policy Tenure and Savings: When you backdate a policy, you will have to pay the due premiums for the backdated period to the insurer. Further, you might also be charged an interest for backdating your policy. Thus, while it can help you save on premiums, it can also cause a significant amount of expenses initially. Hence, it only makes sense to backdate an insurance policy if you have opted for a long policy tenure since you will have more time to make up for what you initially paid while getting the policy backdated.
      • Your age at entry: It is true that premium rates are linked to your age at entry. However, if you are still quite young, backdating a policy to secure a lower premium might not be the best option for you since the annual increase in the premium charged might be negligible. On the other hand, if you are in your 40s or 50s, backdating a policy can be quite useful since it is likely that the premium rate will increase significantly with each birthday.
      • Type of policy: Backdating can be useful for endowment or money-back policies since not only does it reduce the premium payable but it also advances the payouts that a policyholder is eligible to receive. On the other hand, in the case of term insurance plans, backdating the policy might not be the best option. Term insurance plans provide a pure risk cover to the policyholder. The insurance provider will only pay the death benefit amount if the policyholder passes away during the policy term. No other benefit is payable in the case of term plans. Thus, by backdating a term insurance policy, you are essentially paying for a period of time when there was no need for coverage, and are, also, reducing the actual coverage period.

       

      In conclusion, while backdating can be a useful way to save money on your life insurance policy, make sure to only choose this option if it is in line with your financial objectives and your current stage of life.

      7 Mistakes you should avoid when buying a term life insurance policy

      A term insurance policy is a type of life insurance product that offers financial protection to the policyholder’s dependents. Thus, in case the policyholder succumbs to an untimely death, the sum assured will be paid out to the nominee. Given how important these policies can be in providing financial security to your loved ones, it is vital that you pick the right policy and avoid making the mistakes mentioned below:

      1. Buying insufficient coverage: Since the purpose of a term insurance policy is to provide financial security to one’s dependents, it is of utmost importance that you purchase sufficient coverage. Many financial advisors recommend that the sum assured should amount to at least 10 times the annual income of the policy buyer, if not more. Thus, before choosing the sum assured, take your needs, liabilities, investments, and inflation into consideration.
      2. Opting for a short policy tenure: Purchasing a term insurance policy with a short policy tenure and then renewing it periodically will work out to more expensive than a policy with a long tenure. This is because your age at entry is linked to the premium payable. Thus, each time you renew your policy, you will have to pay a higher premium.
      3. Concealing information: It is important to not conceal any information from the insurer when purchasing an insurance policy since insurance companies can declare the policy null and void if they find any inconsistencies with the data you provided.
      4. Not comparing plans: It is essential to compare at least a few different policies before you purchase a particular insurance plan. Make sure to compare the features and payouts, the prices, and even go through the insurer’s history and claim settlement ratio in order to ensure that you are making the right choice.
      5. Delaying purchase: When you are young, purchasing a term insurance policy might not seem very important. However, it is advisable to purchase a policy at the earliest since premium rates are linked to one’s age at the time of purchasing the policy. Thus, you are likely to be offered a lower premium rate and a higher coverage when you are still young.
      6. Picking a policy with the lowest premium quote: Insurance firms, sometimes, advertise policies with extremely low premium rates. However, you should remember that such policies might also come with loopholes, hidden charges, and many exclusions. Thus, make sure to compare the premium rates of various plans and opt for a policy offered by a reputed company at an affordable rate.
      7. Not purchasing riders: Purchasing riders along with your base policy will give you an enhanced coverage, without having to spend too much. Thus, make sure to check if your insurer offers any riders that you can purchase along with your insurance policy.

      Purchasing an insurance policy is a significant financial decision that requires much thought. Thus, make sure to do your due research before you pick a particular policy. Further, once you receive your policy document, it is imperative that you go through the terms and conditions of your policy to ensure that it meets your needs. If you find that you unsatisfied with the policy, you can return it to the insurance provider during the free-look period and purchase another policy.

    Rights of Nominee in Term Life Insurance

    The primary objective of a life insurance policy is to provide financial aid to the deceased person’s family members. It is therefore important to ensure that the policyholder chooses a nominee to whom the life insurance amount will be provided to. The individual who purchases the policy has the right to nominate the person who will receive the benefit when a death claim is made.

    All about nomination

    Policyholders typically nominate their spouses, children, or close relatives as nominees. While unrelated individuals like friends can also be nominated, the insurable interest should be proved in such cases. The insurer may or may not approve the nomination because insurers believe that nominating an unrelated individual may increase the risk of the policy.

    The policyholder can also nominate multiple individuals and decide the percentage of the sum assured that each individual would receive on his/her demise. If a nominee is a minor i.e. below the age of 18, an appointee would have to be named to handle the documentation and benefit amount until the nominee becomes a major.

    To make a nomination, the policyholder will have to provide complete details of the individual including the name, age, address, and the relationship he/she shares with the policyholder.

    The policyholder can change the nominee any number of times during the policy term. All he/she has to do is fill in a form with details of the new nominee and submit it to the insurer along with the form containing details of the previous nominee. The latest nomination will supersede all former nominations. Change of nominee is essential when the nominee dies before the policyholder.

    In case the policyholder does not choose a nominee, the insurer will provide the death benefit to the legal heir - spouse, children, or mother.

    What is a beneficial nominee?

    A beneficial nominee is basically the individual who is authorised to use the benefit provided on death claim. The beneficial nominee mentioned in the policy will receive the benefit as directed by the policyholder. Parents, spouses, or children automatically becoming beneficial nominees of a policy.

    Documents required by a nominee to make a claim

    On the death of the policyholder, the nominee can claim the death benefit by submitting a few important forms and documents.

    • Death claim form
    • Physician’s certificate
    • Hospital certificate
    • Employer or school certificate
    • Original document of the policy
    • Death certificate
    • Cancelled cheque/photocopy of the passbook
    • Post-mortem report
    • Claimant’s photo ID and address proof

     

    • Benefits of Purchasing a Term Insurance Plan at an Early Age

        Currently, term insurance plans are one of the most sought-after life insurance products, in the country. The popularity of these plans stem from the fact that they offer the policyholder a high sum assured at a comparatively low premium rate, thereby being easy on the pockets while guaranteeing financial security to one’s dependents. Most financial experts recommend purchasing a term insurance policy at a young age, in order for you to make the most out of these plans. Read on to know a few reasons and benefits of purchasing a term insurance policy while you are still young.

      • Premiums are linked to age: When quoting the premium rate, insurers take several factors into account, such as the sum assured opted for, the policy buyer’s age at entry, policy tenure, etc. A young policy buyer poses less risk to the insurer, since the chances of them being diagnosed with a critical illness or a lifestyle disease is relatively lower. Thus, an insurer is likely to charge you less as premium if you purchase the policy in your 20s or 30s, as opposed to buying it when you are older.

      • Financial security of dependents: There is nothing that can replace the loss of a loved one. However, an insurance policy, at the very least, ensures that your dependents have the means to carry on with their lives, in the event of an unfortunate eventuality. While a term insurance plan does not acquire a cash value, it does offer a high sum assured to one’s nominee in case of the policyholder’s untimely death. The lump sum amount your family receives, by way of the policy, can help them pay for immediate financial needs, plan for future milestones, and pay off any debts or liabilities that you may have, in a hassle-free manner.

      • Level premium rate: Under certain types of general insurance policies, the premium payable is likely to increase on an annual basis or whenever the policy is renewed. Since most life insurance firms offer term insurance plans with policy tenures ranging between 5 and 30 years, you can opt for your desired coverage period and pay the same premium amount for the duration of the policy tenure. Thus, you are assured of a level premium, which does not increase with age or inflation, for as long as your policy is active.

      • Helps in tax savings: Although not directly linked to your age, a key benefit of a term insurance plan is that it also helps you avail tax benefits. Thus, in addition to the policy benefits, you can also save on tax by purchasing a term insurance policy. You can claim tax benefits, up to specified limits, for premiums paid towards a term insurance plan under Section 80C of the Income Tax Act, 1961. Also, if a death benefit is paid out, your nominee can claim tax benefits for this lump sum amount under Section 10(10D) of the Income Tax Act, 1961.

      • Given the popularity of term insurance plans, all leading life insurance firms offer term insurance policies as part of their product portfolio. However, it is advisable that you compare various plans that are available in the market, request for premium quotes, and opt for one that provides you a suitable level of coverage at an affordable cost, before you purchase an insurance policy.

        How Do Insurance Providers put a value of your life?

        Purchasing a life insurance policy with a suitable coverage is a must for every individual, especially if one has dependents or liabilities. Unlike in the case of general insurance policies where the insurance provider will ascertain the value of the asset before providing you insurance for the same, it is often difficult to put a price on a human life.

        The main purpose of a life insurance policy is to provide the policyholder’s dependents a payout in the event of the life assured’s death. This payout will help the family pay for immediate expenses and also help them meet future financial goals. Further, this benefit payout can act as an income replacement. Thus, it is necessary that you compare various insurance plans that are offered by insurance providers and opt for a plan that offers suitable coverage and adequate benefits.

        How much coverage should you opt for?

        At the time of purchasing your life insurance policy, you will be asked to select a sum assured. In most cases, this is the amount that will be paid to the nominee in the event of the policyholder’s death. Thus, it is vital that you choose a sum assured that is neither too less nor too much. A sum assured that’s too less will do little to help your family, whereas opting for a sum assured that’s too high will increase the premium payable.

        Thus, before you opt for the sum assured, it is advisable to calculate your Human Life Value or HLV. A Human Life Value Calculator will help you calculate the financial or monetary value of your life, after taking your income, liabilities, savings, and investments into account. While most life insurance providers in India offer online Human Life Value Calculators, on their websites, for prospective customers to use before they purchase an insurance plan, there is also a simple formula that you can use to calculate the HLV.

        Formula to calculate HLV: 70% of the policy buyer’s annual income/current rate of annuity + liabilities, loans, and debts that the policy buyer may have.

        Things to be considered

        • When calculating the HLV, 70% of the policy buyer’s annual income is considered, assuming that 30% of one’s income will go towards self-maintenance expenses.
        • The annuity rate offered by life insurance providers might change from time to time. Thus, it is necessary to check the current annuity rate offered by an insurer before calculating your HLV.
        • The HLV can also change from time to time as per your changing liabilities and debts.

         

        Conclusion

        Regardless of the type of insurance policy you purchase, be it a basic protection-oriented term insurance plan or a savings-oriented endowment plan, it is essential that you calculate your HLV before opting for a policy. Also, when you purchase an insurance plan, make sure to consider your coverage needs and opt for a suitable policy tenure. Further, before selecting a particular plan, make sure to research policies offered by insurers, check the claim settlement and grievance solved ratio of the insurance provider, request for premium quotes, and compare the main features and benefits of various plans.

    Term Insurance For IT Professionals

    People may envy an IT professional. People working in the IT sector are known to get a hefty package and have a comfortable lifestyle. However, one also needs to understand that an IT professional also leads an extremely stressful life as he/she has deadlines to worry about which means that the person has to spend long hours in the office. All these can take a toll on his/her health and thus a need for term insurance becomes extremely important.

    Some of the reasons how term insurance is beneficial for an IT professional are given below:

    • The pay factor: People working in the IT sector receive healthy packages. Most of them are young and ambitious, and dream of having a leading a higher standard of life. This leads them to take loans so that they can have their own house or car. People working in IT sector tend to have a very stressful lead which exposes them to the risk of getting diagnosed with a serious health condition. If they are the sole breadwinner in their house, it becomes even more important for them to have a term insurance policy.
    • The benefits of availing riders: Most of the term insurance plans also offer riders or add-on plans. These riders offer an extra layer of protection. Since an IT professional spends long hours in the office, he/she is susceptible to be diagnosed with various types of health issues. Riders such as Critical illness riders are helpful as it provides cover for various types of serious health conditions. Thus, it becomes even more important for a person to purchase term insurance.
    • Tax benefits: A term insurance policy also helps an IT professional save money as he/she can enjoy tax benefits under Section 80C of the Income Tax Act,1961, and Section 10(10D) of the Income Tax Act, 1961. Hence, it becomes an important reason for a person working in the IT sector to purchase a term insurance policy.

    Mutual Funds with Term Insurance Cover

    One of the newest additions to mutual funds is the complimentary life insurance cover provided alongside a Systematic Investment Plan (SIP). These schemes have been in the market for a while but did not have a great demand compared to other mutual fund products. In the recent days, they have made a comeback mainly to make mutual fund investments competitive over other schemes in the market. Following the Union Budget 2018, the taxes introduced on long-term capital gains obtained through mutual funds may have made investors unhappy. However, this additional feature is likely to provide them with some more incentives for investing in mutual funds.

    Features of mutual funds with term insurance

    This type of insurance coverage along with SIP investment is available only with some companies in the market. The success of this model is likely to influence other companies to offer similar products to their customers. The insurance cover provided under this scheme is a term insurance plan that pays for the unexpected death of the insured person. In other words, there is no maturity benefit offered along with this insurance. Some of the notable features of this scheme can be listed as follows:

    • This facility is available only for those who have chosen an investment tenure of at least three years.
    • If the SIP is discontinued before three years, the cover will cease immediately.
    • The premium amount required for providing term insurance coverage will be borne by the company.
    • The coverage amount offered under this scheme will be a specific multiple of the SIP amount chosen by the investor. The multiple will vary in the first, second, and third year as the investment progresses.
    • The coverage value cannot exceed the maximum coverage limit set forth by the company.
    • Most companies provide this coverage for anyone between the age of 18 years and 50 years.
    • The coverage will continue till the age limit mentioned in the policy document even if the SIP is completed after a 3-year period.

    How it works ?

    As mentioned above, the term insurance coverage value is determined by the SIP amount and tenure. In some plans, the maximum sum assured for the complimentary term cover will be 10 times the SIP monthly instalment in the first year, 50 times the SIP monthly instalment in the second year, and 100 times the SIP monthly instalment in the third year. If an investor is investing Rs.10,000 per month in the SIP plan, his/her term insurance coverage will be Rs.1 lakh in the first year, Rs.5 lakh in the second year, and Rs.10 lakh in the third year. The coverage available here will continue till the investor reaches 50 or 55 years (depending upon the age limit mentioned in the policy document) unless the plan has been cancelled by the investor.

    Advantages of SIPs with insurance cover

    Some of the key advantages of SIPs with insurance coverage are listed as follows:

    • They offer free life insurance coverage without the need to pay extra money.
    • The investor has the option of stopping the SIP fund midway if it is deemed unnecessary.
    • There is no exit load if the investment is made for at least three years continously.
    • The extra insurance coverage may come in handy for the family of the insured during unexpected circumstances.

    Limitations of SIPs with insurance cover

    Some of the limitations of this scheme are listed as follows:

    • The term coverage offered here is a group policy, which may not be as efficient as an individual one.
    • There may be an initial waiting period of 60 to 90 days for death due to illnesses.
    • An exit load up to 2% is applicable if the SIP investment is stopped before a tenure of three years.
    • The life insurance cover will cease even after the partial withdrawal of the SIP fund.
    • The maximum age of coverage is restricted to 50 years or 60 years depending upon the SIP fund chosen.

    The complimentary term insurance plan offered along with a mutual fund investment plan is certainly a welcome addition. However, the main focus here must be on the investment or savings part rather than the insurance coverage. It is always easy to find a comprehensive term insurance plan in the market at an affordable price. Hence, it is not a good idea to choose an SIP just for the sake of insurance coverage. Also, most industry experts suggest people to keep their insurance separate from their investments. However, if the investment plan is up to your expectations and the complimentary term insurance comes as an add-on, there is no reason why you shouldn’t opt for this type of SIP.

    Life Stage Event Term Insurance Plan

    At the time of purchasing a life insurance policy, you are required to opt for a sum assured. The sum assured is the minimum amount of money that will be paid to one’s nominee in case of an unfortunate eventuality. While the sum assured is fixed for the duration of the policy for most term insurance plans, certain plans provide policy buyers the option to make enhancements to this sum during certain key milestones in their life. This type of a term insurance policy is called life stage event term insurance plan.

    The milestones or events during which you can most commonly increase your sum assured include marriage, birth of the first child, and birth of the second child,legal adoption, etc.. You will have to keep in mind that when you make an enhancement to your sum assured, your insurance provider will also charge you a higher premium.

    Thus, in case you purchase a term insurance plan with a certain sum assured and find that the coverage amount is not sufficient for you, you can choose to increase the coverage if you have a life stage event term insurance plan. However, not all term insurance plans come with this option. Thus, if you would like to have the option to increase the sum assured of your insurance plan, make sure to opt for a life stage event term insurance plan.

    Income Protection Insurance Plans

    You may have asked yourself the question that who would take care of your loved ones in case something happened to you? If you are the sole earning member of your family then asking this question to yourself becomes extremely important and hence, you must take adequate steps to ensure that the future of your loved ones is safe and secure even if you are not around with them in the future.

    Thus, insurance companies have introduced insurance products called the income protection plan which ensures that your family continues to receive a regular payout even in your absence so that they can continue to live the standard of life provided by you for which you have worked so hard.

    So, how does an income protection plan works?

    If you have availed a regular term insurance plan, then the nominee appointed by you will receive a lump-sum amount called the death benefit in case of your death and the plan will cease to exist. However, one of the problems that the beneficiary may face is that he/she may not be able to stretch the amount for a long period of time and there is a risk that the amount may get exhausted quickly.

    Thus, an income replacement plan is the best way forward as you can decide the amount and also how you would like your beneficiary to receive the amount i.e. on a monthly, quarterly, half-yearly, or on a regular basis.

    Thus the aim of an income protection plan is to ensure that your loved ones continue to receive payouts on a regular basis so that they do not face any financial problems and continue to fulfill their needs and live a standard life. These plans cover till the age of 60 years.

    Why should you purchase an income protection plan for yourself?

    You must purchase an income protection plan if:

    • If you the only earning member in your family
    • You want to ensure that your loved ones continue to receive a regular sum of money to take care of their financial needs even if you are not around.
    • You want to ensure that your loved ones are able to take care of their future needs regardless of the rate of inflation.
    • You must purchase an income protection plan if your loved ones are financially dependent on you.
    • You must purchase this type of plan if you want to ensure that there is a tool taking care of your family in case of your death or you suffering from any form of disability.

    Understanding income protection plan better

    Let us take the help of an example in order to have a better understanding of an income protection plan. For example, you are a 30 years old person with an initial monthly income of Rs.75,000. You purchase an income protection plan with a policy term of 30 years and where you have to pay a premium of Rs.1,970 on a monthly basis.

    Suppose, you die during your 5th policy term, the insurance company will immediately pay the nominee a lump-sum amount of Rs.11 lakh as a death benefit. Thereafter, the insurance company will pay the nominee a sum of Rs.92,000 on a monthly basis. The monthly benefit will increase by 5% every year keeping in mind the inflation rate.

    Similarly, if you meet with an accident in your 5th policy term which hampers your ability to work, the income protection plan then ensures that your family does not have to face any financial problems. You will be first of all be paid 50% of your monthly income as per the plan post the accident. Thereafter, the insurance company will pay you a monthly income of say Rs.45,000 which will increase by 5% every year up to Rs.50,000 for the rest of your policy term. Your future premiums will also be waived by the insurance company.

    Of course, it is important to understand that the sum assured, policy term, and the premium payable will depend on various factors such as your age, annual income, financial needs etc.

    You can see that under such plans, the income will rise by 5% for a very simple reason that the cost needed to sustain today’s life requirements may not be enough for tomorrow keeping in mind the inflation and thus the insurance company increases the monthly payout by 5% every year.

    You may have various dreams that you want to fulfill for which you may take loans and EMIs. In case something happens to you, your family would be under severe pressure and may not be financially adept to repay back the loans and EMIs. An income protection plan is the best way to ensure that the future of your loved ones is safe and secure even in your absence.

    How to Choose a Term Plan in India?

    With a variety of term plans available in the market, it’s difficult to make a choice knowing that you made the right decision. When opting for a term plan, you need to ask yourself the following questions:

    • How much premium can I afford to pay?
    • How much cover do I want from the term plan?
    • How many dependents do I have?
    • What are the benefits I would like my nominee to receive?
    • What kind of lifestyle does my nominee have?
    • What is an optimum amount of cover in order to secure a comfortable future for my nominee?
    • What are the tax benefits I can avail?
    • Can I add riders to a term insurance plan? If yes, is the extra premium worth the extra cover?

    How Much Term Insurance do I Need?

    Ideally, your term insurance cover should be 10 times your annual income. Anything below this might not be sufficient to take care of your nominee in your absence. Any amount above this is a good option, however, it’s not advisable to take a higher sum, as the extra premium paid towards the plan can be diverted to better investment avenues that are profitable. Listed below are certain factors that you need to check before selecting a sum assured amount:

    • Your Annual Income: In the event of the policyholder’s death, the nominee will be provided the death benefit payout. This payout can act as income replacement for your family until they are able to get back on their feet. Thus, it is essential to consider your annual income and opt for a sum assured that amounts to at least 10 times your annual income, if not more.
    • Your expenses: Before you opt for the sum assured, it is necessary to calculate your monthly expenses in order to determine how much you can pay as the premium. Since the premium payable is linked to the sum assured, you will need to first determine your premium payment ability.
    • Your liabilities: If you have several loans and debts to clear, it is advisable to opt for a large sum assured since it will ensure that your nominee is able to pay off your debts without any hassle in the event of your death. However, if you are relatively debt-free, you can get away with opting for a lower sum assured.
    • Your investments and savings: Since the point of opting for a life insurance policy is to provide financial security to your dependents, it is essential to first assess the value of your assets, investments, and savings. This will, in turn, help you determine how much you need to opt for as the sum assured in order to provide sufficient financial security to your loved ones.

    Documents Required for Term Insurance

    You will be required to provide a valid ID to the insurance company. Some of the accepted ID proofs are:

    • Driving License
    • Voter's Identity Card issued by Election Commission of India
    • Passport
    • PAN Card
    • Job card issued by NREGA duly signed by an officer of the State Government
    • Aadhaar Card or Letter issued by the Unique Identification Authority of India

    Proof of Residence

    • Utility bill which is not more than two/three months old of any service provider (telephone, electricity, postpaid mobile phone, gas, water bill)
    • Bank account or Post Office savings account statement
    • Property or Municipal tax receipt
    • Pension or family pension payment orders (PPOS) issued to retired employees by Government Department or Public Sector undertakings, bearing the address
    • Documents issued by Government departments of foreign jurisdiction and letter issued by Foreign Embassy or Mission lndia
    • Letter of allotment of accommodation from employer issued by State or Central Government departments, public sector undertakings, Statutory or Regulatory bodies, scheduled commercial banks, financial institutions and listed companies

    Additional documents

    • Proof of age
    • Proof of income
    • Photograph
    • Any other documents as requested by the insurance provider

    How to Avoid Term Insurance Claim Rejection?

    The main purpose of purchasing a term life insurance policy is to ensure that one’s dependents are taken care of in case of an unfortunate eventuality. Thus, to make sure that your dependents don’t face any hassles at the time of making a claim, make sure to keep the points mentioned below in mind:

    • Pay your premiums on a regular basis to keep your policy from lapsing.
    • Disclose all required information at the time of purchasing your policy.
    • Reveal pre-existing medical conditions to your insurer even if you are not required to undergo a medical screening.
    • Read through the claims settlement process, and make sure to notify your nominee about the same.
    • Keep the policy document in a safe yet accessible place.

    How to Buy Term Insurance Online?

    While traditionally insurance policies were always sold by agents, prospective policy buyers, today, have the option of purchasing term insurance plans through both online and offline channels. Purchasing insurance plans online is a hassle-free and convenient process. The key benefit of purchasing an insurance plan online is that you can view various policies that are offered, compare the key features and premium rates of these policies, and opt for one that is best suited to your needs. Further, you will also find that insurers offer online term insurance plans at a lower premium rate, when compared to offline term insurance policies. Thus, if you are looking to purchase an online term insurance policy, here is how you should go about it.

    • Visit the insurer’s official website and click on the respective tab/menu option for online term insurance plans.
    • If the insurer offers more than one online term insurance plan, you will have to select the policy that you are interested in purchasing.
    • Next, you will have to enter certain details such as your name, contact number, sum assured, policy tenure, premium payment term, etc. Post this, you will able to see the premium quote for the policy.
    • If you are satisfied with the policy terms and conditions and the premium quote, you can proceed to pay the premium.
    • In order to pay your premium, you will need to choose your preferred premium payment mode. You will be able to view an acknowledgment if your payment/transaction was successful.
    • Post this, your insurance provider will usually get back to you in a few days to let you know if your insurance application was approved by them.
    • If your application has been approved by the insurance provider, they will send you a soft copy of your policy document. You will also receive the actual physical copy of your policy document.

    *Note: This is a general procedure to purchase an online term insurance plan. The actual procedure might vary from insurer to insurer and plan to plan.

    Why you must focus on the 3D's in your term insurance portfolio

    Term insurance is one of the most overlooked investment options in India. However, it is one of the most important investment options that you must consider if you have beneficiaries and assets to take care of. Though you may not like to think of your death, eventually this is a reality for which you must prepare yourself and hence you must purchase a term insurance plan so that you can work towards achieving your goals while also having a peace of mind. Also, there is nothing better than having the assurance that the future of your loved ones is safe and secure even if you are not around with them.

    Buy a term insurance for a lifetime of peace

    It is not everyday that you will be purchasing a term insurance plan for yourself and you need to do it once, and hence you must buy a plan so that you can secure your finances. One of the biggest issues with term insurance is that not all the plans are the same and is designed differently keeping in mind the different needs of the customers. Hence, if you don’t know how term insurance works, choosing a policy for yourself can be a difficult task. Thus, you must make efforts to know how term insurance works so that you can choose an appropriate plan for yourself and secure yourself against death, disability, and disease.

    Death

    Term insurance works on a very simple mantra i.e. providing a lump-sum amount called the death benefit to the nominee in case of your sudden demise. In case you survive the tenure, you do not receive any benefits whatsoever. Thus many people due to this fail to understand that there is no bigger investment then securing your future and ensuring that the future of your loved ones is safe. Apart from this, purchasing a term insurance policy allows you to enjoy various tax benefits as well. If you are the sole earning member in your family, then it becomes even more important for you to purchase a term insurance policy for yourself. Having a term insurance plan is one of the most reliable ways in which you can protect the future of your family members. There are insurance policies which provide guaranteed payouts after the policy term comes to an end irrespective of whether you are alive or not. These types of policies are called Whole Life Insurance policies, which are expensive as compared to a term insurance plan. Term insurance is cheap and affordable in nature, for example, you can buy a policy with the cover amount of Rs.1 crore where you may have to pay a monthly premium of Rs.650 - Rs.850 depending on the benefits that you may have availed for yourself. If you are looking for a WTP then the premiums you may have to pay may range between Rs.1,200 - Rs. 6,500 per month.

    Disability

    You must not purchase term insurance thinking that it is supposed to provide you cover only in case of your death. A term insurance plan also ensures that the future of your loved ones do not suffer in case you meet with an accident and become disabled which would lead to a considerable loss of income since you will have to take a leave of absence. According to various international reports published, it was revealed that a 20 years old adult has over 26% chances of being temporarily disabled for a minimum period of one year before retiring.

    Term insurance plans come with riders or add-on plans which ensures that you are covered and your family does not undergo any financial trauma in case you are disabled due to an accident either on a temporary basis or on a permanent basis. On purchasing a rider, you will receive a monthly income for a fixed period of time, or a lump-sum amount if you are disabled permanently. The amount that your nominee will receive will depend completely on how critical your disability is. In case you suffer from a permanent disability, the insurance company will pay you the cover amount, you will receive the partial sum assured in case you suffer from a disability which is temporary in nature. However, the conditions for pay-out may vary from insurer to insurer.

    Diseases

    One of the benefits that you can avail for yourself on purchasing a term insurance plan is a Critical Illness Benefit which provides you cover in case you get diagnosed with a major health condition. There are various term insurance plans in the market which provides cover for various health conditions such as cancer, stroke, multiple organ failure, heart attack, etc. Since the medical inflation is expected to rise in times to come, paying the expenses arising due to the treatment of the condition may punch a deep hole in your pocket, and thus it is important that you purchase a critical illness cover so that even if you are diagnosed with any major health condition, you do not have to worry about the expenses. These types of plans are fixed benefit plans which pay out a lump-sum amount. You can purchase a critical illness plan in two ways. One as a rider along with your term insurance plan, or as a standalone plan which is offered by insurance companies along with standard life and health insurance policies.

    How to Calculate the Sum Assured Required in Term Life Insurance Policy?

    Purchasing a life insurance policy is a smart way to ensure that your dependents have the financial means to meet the key milestones in their lives in the event of your untimely demise. However, for a life insurance policy to be of help to your dependents, it is vital that you opt for a sufficient sum assured or life cover when purchasing the policy.

    When you buy a policy, you will be required to opt for a sum assured. Insurance providers will usually specify the minimum and maximum sum assured that you can opt for when purchasing a policy. A policy buyer will, thus, have to opt for a suitable sum assured within the limits specified by the insurer.

    In case the policyholder succumbs to an untimely death during the policy tenure, a death benefit, usually amounting to the sum assured amount, will be paid to the nominee. Thus, it is necessary to opt for an adequate sum assured to ensure that you are not underinsured and that your dependents won’t have to face any financial troubles in the future.

    Factors to consider to determine how much sum assured you need

    • Add-up the value of your assets, savings, and investments: Firstly, you will need to calculate the total value of your investments, savings, and assets. This can be in the form of bank account savings, fixed deposits, mutual funds, jewellery, property, etc. If you have a sufficient amount of savings and investments, you can proportionally reduce the sum assured since your dependents will have an adequate amount of savings to fall back upon in case of an unfortunate eventuality.
    • Take stock of your loans and debts: Next, if you have accumulated debts or have taken loans, it is vital to calculate the total amount that you owe to different creditors. You will then need to deduct this amount from the total value of your assets. Doing so will give you an accurate representation of how much of your savings can be used by your beneficiaries for their needs.
    • Consider your family’s monthly expenses: Make sure to add-up all the day-to-day expenses that you and your family incur during the month. These expenses can include bill payments, costs to run the household, school fees, etc. Thus, the sum assured that you opt for should be sufficient to meet the family’s day-to-day expenses at least for a few years after your death.
    • Calculate one-time expenses: During your lifetime, it is likely that you will incur a few significant expenses, such as your child’s wedding expenses, higher education costs, the purchase of a new house, etc. You will need to list down all the events where you might have to shell out a significant amount of money and calculate the total expenses. Make sure to factor this in to your sum assured calculation.
    • Work out the number of years that you need to provide financial protection for: When you opt for a sum assured amount, you will need to consider the number of years for which you will have to provide financial security. This is usually linked to your present age and the number of years that you have left to retire.
    • Consider the rate of inflation: When opting for the sum assured, you should take into account the effects of inflation in order to ensure that the sum that you opt for today is sufficient for your dependents even in the future. For this, make sure to look at the inflation rate of the previous few years and the estimated rise in the cost of living over the next few years. You can use this as a guide to calculate the approximate rate of inflation.
    • Current income: Your current income is an important factor to consider when opting for the sum assured. Since your family’s lifestyle is dependent on your income, it is essential to, at the very least, opt for a sum assured that is 10 times your yearly income.
    • Option to make enhancements to the sum assured: Several insurance companies give policyholders the option to increase the sum assured during certain stages of their lives, such as the birth of a child, legal adoption, etc. If your insurance provider does not provide you this option, you will have to accordingly opt for a higher sum assured while purchasing the policy.

    Ideally, the sum assured that you opt for should be representative of the total value of your liabilities and debts, your family’s annual expenses, and the expenses that will have to be borne by your family members during significant events or milestones in their lives. While the importance of purchasing a life insurance policy cannot be understated, it is important to remember that choosing the right sum assured is just as important.

    Do You Need Term Insurance Post-Retirement?

    We all know that it is extremely important to have an insurance especially during the time when you have various responsibilities to fulfill and many financial goals to achieve. Having an insurance in place ensures that your family is safe and secured monetarily even if you are not around. Life post-retirement means that you are not working anymore. You are also free of your responsibilities and you may have achieved all your goals. Your children are probably independent by now and capable of taking care of themselves. So, do you need an insurance post your retirement? In some cases you do. It is generally recommended that you purchase a term insurance for yourself since it covers you for a specific period of time. But why do you have to be covered at all after you have retired? We discuss the reasons.

    • Early retirement-You may not wait till the age of 60 to retire from your job. You may do that at the age of 50 in order to fulfill your other dreams which may not be possible while you are still working. An early retirement does not mean that you are relieved of your responsibilities. You may still have immediate financial liabilities to take care of and you don’t want your family to be burdened with any financial problems in your permanent absence. Hence, it is important that you purchase a health insurance for yourself.
    • Spousal support-You may want to ensure that your spouse is financially secured even in your absence and he/she does not have to depend on your children for financial support. You wouldn’t want any financial liabilities to bother your better half in case you are not there. Keeping that in mind, it is always advisable to purchase a term insurance policy for yourself.
    • Children still dependant on you-You may have children who might still be still dependant on you even after you have retired. Thus, it becomes important to ensure that their future remains secure and they are able to achieve their dreams regardless of whether you are there or not. A term insurance policy will ensure that your dream of seeing your kids get educated and married do not get disrupted even if you are not around.
    • Working after retirement-You may choose to work after you have retired. Various people are self-employed post-retirement. This means you are still a financial contributor to your family and your absence might affect your family from a financial point of view. Hence, it is recommended that you purchase a term insurance policy in order to ensure that your family does not face any problem monetarily.
    • Covering the cost of your death-In case you die, your funeral might be an expensive affair. A term insurance policy will ensure that a corpus fund is created that will not only take care of your final rites but also financially support your family and help them achieve their future dreams.

    It is generally difficult to purchase a term insurance policy post-retirement as insurance companies are not willing enough to provide one. The premiums that you might have to pay might be expensive and become difficult for you in terms of affordability. Hence, it is important that you have planned well in advance regarding your life. For example, it is rare to have children still being dependant on you after you have retired, but if you are aware that a case like this can arise in the future, it is recommended that you purchase a term insurance well in advance.

    The reasons mentioned above are strong enough for you to contemplate whether you need a term insurance post-retirement. If you still have responsibilities to take care of post your retirement then it is advisable that you act and buy a suitable term insurance plan for yourself.

    Top Online Term Plans

    1. LIC’s e-Term Plan: The e-Term Plan from LIC is a non-participating, term insurance policy that can be purchased through the insurer’s official website without the involvement of any agents or intermediaries. This policy offers a death benefit to the nominee in case of the policyholder’s death. Preferential premium rates are offered to non-smokers.
    2. Key Features of LIC’s e-Term Plan:

      • In the event of the policyholder’s death, the nominee will be paid the full death sum assured by the insurance provider.
      • No benefit is payable at maturity of the policy.
      • The minimum sum assured that must be opted for by individuals belonging to the Aggregate Category is Rs.25 lakh. The minimum sum assured for the Non-Smoker Category is Rs.50 lakh.
      • Individuals who purchase this policy need to be between 18 years and 60 years.
      • The cover provided by this policy can be availed up to the age of 75 years.
      • When purchasing this policy, a policy tenure between 10 years and 35 years can be chosen.
      • Premiums must be paid on an annual basis to the insurance provider.
    3. Max Life Online Term Plan: Individuals who purchase the Max Life Online Term Plan are offered three death benefit payout options– Basic Life Cover, Basic Life Cover with Monthly Income, and Basic Life Cover with Increasing Monthly Income. Further, policy buyers can also customize the coverage offered by this policy by purchasing riders.
    4. Key Features of Max Life Online Term Plan:

      • In the event of the policyholder’s death, a death benefit will be paid to the nominee. The death benefit payout type and amount will vary as per the payout option chosen and the sum assured opted for.
      • Policyholders will not receive a maturity benefit at completion of the policy term.
      • In order to purchase this plan, policyholders need to be a minimum of 18 years of age. The maximum age at entry for the Regular Pay option is 60 years, while the maximum entry age for the ‘Pay till 60’ option is 50 years.
      • The maximum maturity age for this policy is 85 years.
      • For the base policy, prospective policy buyers must opt for a policy term between 10 years and 50 years.
    5. ICICI Prudential iProtect Smart Plan: This is a term insurance policy that also provides coverage against 34 critical illnesses. Thus, in addition to the life cover, policyholders will also be provided a lump sum payout upon being diagnosed with a critical illness.
    6. Key Features of ICICI Prudential iProtect Smart Plan:

      • This policy comes with 4 benefit options.
      • Individuals between 18 years and 65 years can purchase this plan.
      • The minimum and maximum age at maturity for this plan are 23 years and 75 years, respectively.
      • The minimum premium payable for the Life Option is Rs.2,400. The sum assured is subject to the premium chosen.
      • The premium can be paid as a lump sum amount, or can be paid on an annual, bi-annual, or monthly basis.
    7. SBI Life - eShield Plan: This is a non-participating, non-linked, individual, pure term insurance policy. Policy buyers have the option of purchasing riders along with this policy to customize the coverage. Further, customers can also opt for a level cover or an increasing cover, when purchasing this policy.
    8. Key Features of the SBI LIfe - eShield Plan:

      • Individuals who are over the age of 18 years can purchase this policy.
      • The minimum sum assured that must be opted for when purchasing this policy is Rs.35 lakh.
      • Premiums can be paid on a yearly, half-yearly, or monthly basis.
      • Policy buyers must opt for a minimum policy term of 5 years for the Level Cover and 10 years for the Increasing Cover. The maximum policy term that can be selected is 30 years.
      • Policy buyers can also purchase additional riders, such as the SBI LIfe - Accidental Death Benefit Rider and/or the SBI Life - Accidental Total & Permanent Disability Benefit Rider along with this policy.
    9. Bajaj Allianz iSecure Plan: This policy offers a high sum assured at a competitive premium rate to policy buyers. Further, policyholders have the option of extending the coverage offered by this plan to their spouse. Policy buyers are also eligible to receive a rebate if they opt for a high sum assured.
    10. Key Features of Bajaj Allianz iSecure Plan:

      • To purchase this plan, policy buyers need to be between the age of 18 years and 60 years.
      • People belonging to the General Category can choose a minimum sum assured of Rs.2,50,000. Others can choose a minimum sum assured of Rs.20 lakh.
      • At the time of purchasing this policy, one can opt for a policy term of 10, 15, 20, 25, or 30 years.
      • The maximum maturity for this policy is 70 years.
    Plan Name Age at Entry Maximum Maturity Age Policy Tenure Minimum Sum Assured
    LIC's e-Term Plan 18-60 years 75 years 10-35 years
    • Aggregate Category: Rs.25 lakh
    • Non-Smoker Category: Rs.50 lakh
    Max Life Online Term Plan 18-60 years (will vary based on premium payment term chosen) 85 years
    • Base Plan: 10 to 50 years
    • Critical Illness Cover: 10 to 40 years
    • Base Plan: Rs.25 lakh
    • Critical Illness Cover: Rs.5 lakh
    ICICI Prudential iProtect Smart Plan 18 – 65 years 75 years Minimum policy term is 5 years Subject to the minimum premium
    SBI Life - eShield Plan
    • Minimum Entry Age: 18 years
    • Maximum Entry Age: 65 years for the Level Cover and 60 years for the Increasing Cover
    • 75 years for the Level Cover
    • 70 years for the Increasing Cover
    • Minimum Policy Term: 5 years for the Level Cover and 10 years for the Increasing Cover
    • Maximum Policy Term: 30 years
    Rs.35 lakh
    Bajaj Allianz iSecure Plan 18 – 60 years 70 years 10, 15, 20, 25, or 30 years Rs.2,50,000 (for general category)

    Top Offline Term Plans

    1. SBI Life – Smart Shield Plan:The Smart Shield Plan from SBI Life is a non-participating, traditional term insurance plan that provides policy buyers a large sum assured at an affordable cost.
    2. Key Features of SBI Life - Smart Shield Plan:

      • Only individuals between 18 years and 60 years can purchase this policy.
      • The maximum maturity age for this policy is 65 years.
      • This policy comes with two plan options - Level Term Assurance and Increasing Term Assurance.
      • One must opt for a minimum sum assured of Rs.25 lakh when purchasing this policy.
      • Policy buyers can opt for a policy tenure between 5 years and 30 years.
      • Policy buyers can also purchase riders offered by SBI Life along with this policy.
    3. LIC’s Anmol Jeevan II Plan: This is a pure protection plan that provides financial security to the life assured’s dependents, in the event of his/her untimely death.
    4. Key Features of LIC’s Anmol Jeevan II Plan:

      • In case of the policyholder’s death, the sum assured will be paid to the nominee.
      • Policy buyers can opt for any sum assured between Rs.6 lakh and Rs.24 lakh.
      • To be eligible to purchase this policy, the policyholder needs to be between 18 years and 55 years.
      • The maximum cover ceasing age is 65 years.
      • One can opt for a policy term between 5 years and 25 years.
      • Premiums can be paid on an annual or bi-annual basis.
    5. Max Life Super Term Plan: The Super Term Plan from Max Life Insurance provides comprehensive coverage to the policy buyer. Policy buyers/nominees can also choose the death benefit payout option – lump sum amount or lump sum amount with increasing monthly income – as per their needs.
    6. Key Features of Max Life Super Term Plan:

      • This policy provides a guaranteed death benefit to the policyholder.
      • Individuals between 18 years and 65 years of age can purchase this policy.
      • The maximum maturity age for this policy is 75 years.
      • Policy buyers can opt for a policy term between 10 years and 35 years.
      • The minimum sum assured that must be chosen when purchasing this policy is Rs.25 lakh.
    7. LIC’s Amulya Jeevan II Plan: The Amulya Jeevan II Plan from Life Insurance Corporation of India (LIC) is a pure protection policy that provides financial security to the policyholder’s dependents, in case of an unfortunate eventuality.
    8. Key Features of LIC’s Amulya Jeevan II Plan:

      • Policy buyers can opt for a minimum sum assured of Rs.25 lakh.
      • In order to purchase this policy, customers will need to be between the age of 18 years and 60 years.
      • Policyholders can avail the coverage provided by this policy up to the age of 70 years.
      • When purchasing this plan, policy buyers can opt for a policy tenure between 5 years and 35 years.
      • Premiums will have to be paid on an annual or bi-annual basis.
    9. HDFC Life CSC Suraksha Plan: This is a non-participating, traditional term life policy that is specially designed to provide coverage to individuals living in rural parts of India. This policy can only be purchased through CSC or Common Service Centres, across the country.
    10. Key Features of HDFC Life CSC Suraksha Plan:

      • Policy buyers between the age of 18 years and 55 years can purchase this plan.
      • The minimum maturity age for this policy is 23 years, and the maximum maturity age is 60 years.
      • One must opt for a minimum sum assured of Rs.30,000 to purchase this policy. The maximum sum assured that can be selected is Rs.2 lakh.
      • The minimum annual premium for this policy is Rs.112.
      • Any policy term between 5 years and 15 years can be chosen.
      • Premiums can be paid on a monthly, quarterly, bi-annual, or annual basis.
    Plan Name Age at Entry Maximum Maturity Age Policy Tenure Minimum Sum Assured
    SBI Life – Smart Shield Plan 18 – 60 years 65 years 5 – 30 years Rs.25 lakh
    LIC’s Anmol Jeevan II Plan 18 – 55 years 65 years 5 – 25 years Rs.6 lakh
    Max Life Super Term Plan 18 – 65 years 75 years 10 – 35 years Rs.25 lakh
    LIC’s Amulya Jeevan II Plan 18 – 60 years 70 years 5 – 35 years Rs.25 lakh
    HDFC Life CSC Suraksha Plan 18 – 55 years 60 years 5 – 15 years Rs.30,000

    Income Replacement Term Insurance Plans

    A term insurance policy is a type of life insurance product that provides a risk cover against death to the policy buyer. Thus, in case the policyholder passes away while the policy is still in-force, a death benefit, will be paid to the nominee. Traditionally, the death benefit is paid to the nominee as a lump sum amount.

    While the purpose of a lump sum death benefit is to help the policyholder’s dependents pay for immediate financial needs and to save some money for their long-term needs, the fact remains that many people do not know how to best invest this payout for maximum returns, and, as a result, might have to face financial problems a few years down the line.

    Keeping this mind, life insurance firms have started to offer income replacement term insurance plans as a part of their product suite. In the case of an income replacement term insurance plan, which is a variant of a regular term life policy, the death benefit or payout will usually be split into two parts – a lump sum payout that is paid to the nominee upon the policyholder’s death and a fixed monthly income which the nominee is eligible to receive for a certain number of years, usually between 10 years and 15 years. Thus, income replacement term insurance plans are ideal if you want to ensure that your dependents are provided a regular and fixed source of income in case of an unfortunate eventuality.

    Variants of Income Replacement Term Insurance Plans

    Income replacement term insurance plans usually come with a few payout options, from which a policy buyer can choose an option as per the needs of his/her dependents.

    • Lump Sum Payout + Fixed Monthly income: In this variant, the nominee will be paid a lump sum benefit, which will amount to a certain percentage of the base sum assured, upon the policyholder’s death to pay for any immediate financial needs that might arise. In addition, the remaining sum amount will be split into equal monthly instalments that will be payable for a certain pre-defined duration of time.
    • Lump Sum Payout + Increasing Income: Here, as soon as the policyholder passes away, a percentage of the sum assured will be paid to the nominee to pay for immediate expenses such as funeral expenses, household expenses, etc. In addition to this, whatever is left of the sum assured will be paid to the nominee in instalments that will increase every policy year for a certain number of years. Thus, these increasing payouts will help protect your loved ones against the effects of inflation and rising cost-of-living.
    • Fixed Monthly Income: In this case, a fixed amount will be paid to the nominee on a monthly basis for a specific number of policy years. Thus, the entire sum assured that is chosen by the policy buyer while purchasing the policy will be divided into guaranteed monthly payouts.
    • Increasing Income: In this variant, the sum assured chosen by the policyholder while purchasing the policy will be paid to the nominee upon the policyholder’s death on a monthly basis. However, the amount that is to be paid might increase by a certain percentage every policy year.

    Benefits of Income Replacement Term Insurance Plans

    • Financial Security: As the name suggests, the primary purpose of an income replacement term insurance plan is to provide the nominee a steady source of income in case the policyholder succumbs to an untimely death. Thus, this amount, which will act as an income replacement, will provide financial security to one’s dependents.
    • Affordable Pricing: In comparison to other life insurance products, term insurance policies are usually more affordable since they don’t acquire a cash value at any time during the policy tenure. Thus, you can provide financial security to your dependents without spending a large sum of money on premium payments.
    • Flexibility: In the case of income replacement term insurance plans, insurance providers usually offer a number of payout options to the policy buyer. You can choose a fixed monthly payout, an increasing monthly payout, or a lump sum payout along with monthly payouts. Thus, you can customise the payout as per the needs of your dependents. Further, you can also choose a sum assured amount as per your needs and opt for a suitable policy tenure.
    • Riders: Along with your income replacement term insurance plan, you can opt for additional riders if you want a more enhanced coverage from your policy. Some of the riders that you can consider purchasing with your insurance plan are the Accidental Death and Disability Benefit Rider Accidental Death Benefit Rider, Critical Illness Rider, Term Rider, Waiver of Premium Rider, etc. However, you will need to keep in mind the fact that the exact riders offered along with a policy will vary from plan to plan and insurer to insurer.
    • Tax Benefits: Life insurance policies offer policyholders and their nominee tax benefits. When you purchase an income replacement term insurance plan, you can claim tax benefits for the premiums that you pay towards your policy under Section 80C of the Income Tax Act. The death benefit payout that your nominee may receive in case of an unfortunate eventuality is also eligible for tax rebates under Section 10(10D) of the Income Tax Act, 1961.

    When should you purchase an Income Replacement Term Insurance Plan?

    The key benefit of a purchasing an income replacement term insurance policy is that you can ensure that your loved ones have the means to pay for financial expenses that they might incur in your absence. With this mind, you should ideally purchase an income replacement term insurance plan if:

    • You are the primary breadwinner of the family, and your family depends on your monthly income to meet their needs.
    • You have a number of dependents, including young children, dependent parents, etc.
    • Your nominee is not well-versed with the various investment options available and might not be able to get optimum returns from a large sum of money.

    An income replacement term insurance plan is a smart choice for any individual who wishes to provide financial security to his/her loved ones for a significant duration of time. However, the decision of which life insurance product to purchase should be based on your needs, liabilities, and future requirements. For example, if you have a number of debts, opting for an income replacement term insurance plan might not be the best choice since the lump sum benefit provided by a regular term insurance policy can help your dependents clear off all the debts at once.

    On the other hand, if you are looking for a financial product that will provide guaranteed monthly returns for a number of years, an income replacement term insurance policy is your best bet. Also, before you purchase an insurance plan, make sure to compare at least a few different policies offered by different insurance companies, check the pricing, and read through the policy benefits and features to make an informed decision.

    Things to Consider Before Purchasing a Term Life Insurance Plan

    Buying a Term life insurance cover is a must for everyone since it can provide your dependents financial security in case of an unfortunate eventuality. However, purchasing insurance can sometimes be a tricky business, given the number of choices that are available and the various jargons that are used by insurers to describe their products. Thus, we’ve listed down five moves that you should make, especially if you a first-time insurance buyer.

    • Research various types of Life Insurance: Life insurance plans come in various types, including term life plans, whole life plans, unit-linked plans, endowment plans, etc. These policies have varied features and benefits, thus making it all the more important that you purchase a policy that is best suited to your needs. Rather than opting for a policy that was recommended to you by a friend or an agent, make sure to do your due research and compare the features and benefits of various policies, and only opt for a policy if you are happy with the terms and conditions of the policy.
    • Compare Premiums: When it comes to deciding which life insurance policy to purchase, the premium payments are something you should certainly consider, since life insurance is a long-term contract and your premium payments can add up to a significant amount over time. Thus, it is recommended that you compare the premium quotes for various insurance policies, and select a plan that offers a comprehensive coverage at an affordable price. You can compare premium rates either through a third-party insurance comparison website or by visiting official websites of different insurance providers.
    • Ask for Discounts: When you purchase an insurance plan, it is vital that you ask your insurance provider for any discounts that you might be eligible for.Life insurance providers sometimes offer discounts to non-tobacco users, individuals who maintain a healthy lifestyle, policy buyers who opt for a high sum assured, etc.These discounts can reduce your premium payable, thus helping you increase your savings.
    • Bundle your insurance policies: There is a good chance that you might purchase more than one insurance plan. Insurance providers usually offer a loyalty discount to customers who purchase several insurance plans from them. Given the fact that most life insurance providers offer both life and health insurance plans as part of their product portfolio, it is advisable to consider purchasing both types of insurance plans from the same insurer.
    • Keep your beneficiary informed: When you purchase a life insurance policy, you will have to nominate another individual and provide their correct contact details. If something happens to you during the policy tenure, your nominee will receive the death benefit. In addition to this, it is also essential that you keep your nominee or beneficiary informed of your purchase. Make sure to take them through the claim settlement process and keep the policy document in an easily accessible place.
    • Make sure to consider your coverage needs, the needs of your dependents, liabilities, and future financial goals before purchasing any insurance plan.
    • Research the various policies available and compare premium quotes of these policies.
    • Familiarise yourself with the policy brochure and the policy terms and conditions.
    • Check the history, claim settlement ratio of the company, grievance solved ratio, etc.

    Term Life insurance plans can provide you something truly priceless – a sense of security and peace of mind. Thus, make sure to follow the tips mentioned above and invest in a plan that will give you sufficient coverage.

    Things to be Done After Purchasing a Term Life Insurance Policy

    Purchasing an insurance policy is a significant financial decision, one that requires both thought and time. While finding the right policy and purchasing it at a competitive rate is a task in itself, there are a few things that you should look at after buying the policy to ensure that you and your nominee are able to get the most out of the policy when the need arises. Thus, we’ve compiled a five-point checklist of things you need to do after purchasing your policy.

  • Read through the policy document: Immediately after receiving the policy document, you should make sure to read through it to ensure that everything is as per your expectations. Ensure to read the fine print, look at the benefits payable, premium amounts, and personal and nominee details that you may have furnished at the time of purchasing the policy. If you have any queries, you will need to call the insurer’s customer service team and get it clarified at the earliest. All insurance policies come with a free-look period, and if you are unsatisfied with the policy terms and conditions, you can still cancel the policy during this period.
  • Inform your nominee: The main purpose of a life insurance policy is to ensure that one’s dependents are financially safeguarded in case of an unfortunate eventuality. Thus, it is vital that you inform your nominee and family members as soon as you purchase an insurance policy. Make sure to inform them about the benefits that will be payable and the claim process. Also, ensure that you inform your nominee that the death benefit they receive by way of the policy is eligible for tax rebates, under Section 10(10D) of the Income Tax Act, 1961.
  • Consider automating your premium payments: It is essential that you make your premium payments on time, as per your premium payment mode, to keep your policy from lapsing. However, keeping a track of the premium payment schedule and making these payments in a timely manner is not an easy task, especially if you have more than one active policy. Thus, as soon as you purchase an insurance policy, make sure to automate your premium payments. You can set up an ECS or an Electronic Clearance System, by way of which the premium amount will be debited from your savings bank account automatically, provided there is sufficient balance. If your bank offers a Direct Debit facility, you can use this to have your premiums debited automatically.
  • Keep the policy document in an easily accessible but safe place: At the time of making a death claim, your nominee will be required to submit a copy of the policy document. In order to ensure that your nominee doesn’t face any hassles when raising a claim, it is vital that you keep your policy document in an easily accessible place and inform your nominee about the same.
  • Claim tax benefits: An indirect benefit of purchasing a life insurance policy is that it will help you save on tax. As a policyholder, you can claim tax benefits for the premiums that you pay during a given fiscal year under Section 80C of the Income Tax Act, up to the pre-defined limits. Thus, make sure to list your life insurance policy in your tax declaration form and submit the necessary proof to claim the tax benefit at the end of the financial year.
  • A life insurance policy is a must-have at all times, and purchasing it will give you a sense of security and peace of mind. However, to ensure that you can avail the maximum benefits from your policy, make sure to keep the points mentioned above in mind.

    Riders for Term Insurance Plans

    Riders or add-ons are offered by life insurance companies to policy buyers at the time of purchasing their base policy. While the coverage offered by the base policy is more or less fixed, riders give policy buyers the option to customise their policy as per their needs. Thus, riders offer the policyholder coverage over and above the life cover offered by the base policy. The key benefit of purchasing an insurance rider is that you can avail an increased protection by paying a nominal premium. Also, since the insurance rider is linked to your main insurance policy, you don’t have to go through the hassles of maintaining two policies.

    There are a number of riders available with term insurance plans depending on your choice of the insurance provider. Some of the main riders available with these plans are:

    • Waiver of Premium – This rider helps safeguard policyholder against policy lapse if they are unable to pay the insurance premiums. In case of loss of job, income source, or other financial crises, the insured may not be able to pay the premium. In this case, the rider will come into force and ensure that the term plan stays in force and future premiums will be waived.
    • Critical Illness – When diagnosed with a critical illness, the financial requirements to treat the illness may skyrocket. With this rider, the life insured will receive a payout upon the diagnosis of a critical illness that is specified in the plan.
    • Accidental Death – Accidental deaths can leave family members scrambling for finance as the death maybe sudden and unexpected. High medical costs and funeral expenses may also take a toll on the family’s finances. This rider provides an extra sum assured to meet such costs.
    • Partial and Permanent Disability – If the life insured suffers partial or permanent disability due to an accident, then the rider will either pay out a lump sum or staggered payments which are a percentage of the total sum assured of the insurance policy. This will help compensate the loss of regular income that may arise due to partial or permanent disability.
    • Income Benefit Rider – In case of the death of the policyholder, this rider offers a regular income source for the family.

    Why you need to Purchase a Critical Illness Rider with your Term Insurance Plan?

    A few popular riders that are offered by life insurance companies include the Waiver of Premium Rider, Accidental Disability Benefit Rider, Accidental Death Benefit Rider, Critical Illness Rider, etc. Each of these riders serve a unique purpose and offer varied benefits and features. In this article, we will look at the benefits and importance of a critical illness rider.

    What is a Critical Illness Rider?

    A critical illness rider is attached to a term insurance policy to protect the life assured from financial expenses that he/she might have to incur in the event of being diagnosed with a critical illness. Thus, a critical illness rider covers a number of pre-specified critical illnesses, and if the life assured were to be diagnosed with any one of those illnesses, a lump sum benefit would be paid out to him/her. Thus, given the increasing number of critical illness cases and rising medical/healthcare costs, it is smart to purchase a critical illness rider along with your base insurance policy.

    Reasons why you need to purchase a Critical Illness Rider

    • Lump Sum Payout at Diagnosis: Most critical illness insurance plans offer a lump sum benefit to the policyholder when the disease is diagnosed. Thus, this sum of money can be utilised to pay for hospitalisation and medical expenses.
    • Extensive Coverage: While the exact number of diseases covered by critical illness riders vary from insurer to insurer, the main diseases covered include cancer, heart attack, coronary artery bypass, renal failure stroke, organ transplant, etc. Typically, most critical illness riders offer coverage to a number of major diseases and surgeries.
    • Tax Benefit: As a policyholder, you can avail tax benefits under the Income Tax Act, 1961, when you purchase a critical illness rider.
    • Long Rider Tenure: Critical illness riders usually come with a longer tenure than health insurance plans. Certain insurance providers will also give you the option of choosing a rider tenure that is equal to your policy tenure. Thus, you will not have to go through the hassle of renewing your rider on a regular basis.
    • Acts as an Income Replacement: A critical illness is not only expensive to treat, but it might also cause the diagnosed individual to become unemployable for a certain period of time. Thus, the payout offered by a critical illness rider can act as an income replacement and will help the policyholder pay for day-to-day expenses.

    Things to consider before purchasing a Critical Illness Rider

    • While critical illness riders do provide coverage for a number of illnesses, you will need to pay close attention to what diseases have been specified in the policy brochure. Thus, if you have a family history of cancer or are a smoker, make sure to check whether the critical illness rider covers cancer. It is best to opt for a rider that provides coverage as per your requirements.
    • For most critical illness plans and riders, the policyholder is required to survive for a certain number of days after diagnosis of the disease to be eligible to receive the lump sum payout. The number of days that you need to survive to receive the benefit is called the survival period. The survival period for critical illness riders usually ranges from 30 days to 90 days. Thus, when looking for a critical illness rider, make sure to opt for one that has a low survival period.
    • Almost all critical illness riders come with waiting periods. During the waiting period, the insurance company will not entertain any claims raised by the life assured. Thus, make sure to purchase a rider with a short waiting period.
    • All insurance policies and riders come with exclusions. An event or disease that is listed as an exclusion will not be covered by a policy. In the case of a critical illness rider, make sure to check if any particular diseases that you specifically require a cover for are listed as exclusions.
    • If you have a pre-existing ailment or condition, it is important that you check whether the rider offers coverage for pre-existing diseases and whether there is a waiting period that is applicable to pre-existing diseases.

    Purchasing a critical illness rider along with your term insurance policy will provide you an extensive and comprehensive coverage. Given just how expensive it can be to treat critical illnesses, purchasing a critical illness rider as a precautionary measure is a smart move. Also, even if the rider ceases to exist after the benefit is paid out, your base policy will still continue to remain in force. Thus, you can continue enjoying the life cover provided by your term insurance policy even after the rider coverage ceases.

    Term Life Insurance Exclusions

    Term insurance plans are one of the most popular insurance plans in India. A term insurance plan provides the policyholder a risk cover against death, thereby offering financial security to his/her nominee. If the policyholder meets with an untimely death during the policy tenure, a death benefit will be paid to the nominee. That being said, there are certain limitations with regards to the kinds of death that are covered by a term life insurance plans.

    Types of deaths that are not covered by a Term Insurance Plan

    • Suicide: Term insurance plans, in general, do not pay-out a death benefit if the policyholder commits suicide after purchasing the policy.However, certain term insurance plans will return a percentage of the overall premiums paid, during the policy tenure, to the nominee.
    • Death due to self-inflicted injuries: Term insurance plans also don’t cover death caused due to self-inflicted injuries. Thus, if the policyholder succumbs to an untimely death as a result of a self-inflicted injury, no death benefit will be paid to the nominee.
    • Death due to alcohol/drug abuse: If the policyholder meets with an untimely death as a result of being intoxicated or under the influence of narcotic substances, such a death will not be covered by a term insurance plan.
    • Death due to HIV/AIDS: In most cases, death occurring due to HIV/AIDS and other related diseases will not be covered by term insurance plans, unless otherwise mentioned in the policy brochure.
    • Death due to homicide: If the life assured passes away as a result of a murder committed by the nominee, no death benefit will be paid out to the nominee. If the homicide results in an investigation, the death claim will be put on-hold by the insurance company until the nominee’s acquittal.
    • Death due to participation in criminal/illegal activities: If the life assured succumbs to an untimely death as a result of participating in a criminal or illegal activity or in any activity with a criminal intent, no benefit will be paid out to the nominee.
    • Death due to participation in adventure sports: Most term insurance plans do not cover death as a result of the policyholder participating in extremely-risky adventure sports or racing events, such as bungee jumping, water sports, motorbike racing, etc.

    Group Term Insurance Plans

    Group term insurance schemes or plans are specially designed to provide a risk cover against death to the members of a group. These plans are usually purchased by affinity groups or by employee-employer groups to provide additional benefits to enrolled members. Group term insurance plans are intended to provide financial security to the dependents of the enrolled members in the event of a member’s death.

    Eligibility Criteria for Group Term Insurance Plans

    • Group term insurance policies can be purchased by employer-employee groups, non-employer-employee groups, affinity groups, banks, etc.
    • Enrolled members will need to meet the age range specified by the insurer. Any individual under or over the specified age limits will not be able to avail coverage.
    • In order to be eligible to purchase a group term insurance plan, the group will need to meet the minimum group size that is specified by the insurer in the policy brochure.

    Features of Group Term Insurance Schemes

    Listed below are the general features of group term insurance plans. Please note that the exact features will vary from plan to plan and insurer to insurer.

    • In most cases, members of a group do not have to undergo a medical screening before enrolment. However, if the master policyholder is opting for a high sum assured, a medical test may be required.
    • In the event of a member’s death, the pre-decided sum assured will be paid to the deceased member’s nominee.
    • Certain insurance providers also offer additional riders that can be purchased with the base policy.
    • Most group term insurance plans offer a grace period for premium payments.
    • In the case of premium payments, most insurers offer multiple options to policy buyers. The premium can be borne entirely by the master policyholder or can be paid by enrolled members. The premium can also be paid by the master policyholder and enrolled members in a certain proportion.
    • Group term insurance plans offer a high degree of flexibility, wherein new members can be added at any time during the policy tenure and existing members may be allowed to leave at any time as well.
    • The application process is usually timely and hassle-free.
    • Certain group insurance plans also come with the option of providing coverage to the life assured’s spouse.
    • Most group term plans can be surrendered by the master policyholder. The applicable surrender benefit will be paid to the master policyholder by the insurance provider.
    • Group term insurance policies are usually annually renewable, unless otherwise specified.
    • Group term insurance plans also offer tax benefits.
    • Group insurance plans are also cost-effective since multiple members are covered under one plan.
    • Most group insurance policies offer worldwide coverage to enrolled members.
    • Premiums can be paid on an annual, bi-annual, quarterly, or monthly basis, as per the terms and conditions specified by the concerned insurance provider.

    Benefits of Group Term Insurance Plans for Employees

    • Group term insurance plans offer financial security to one’s dependents in case of an unfortunate eventuality.
    • If additional riders have been chosen, members can avail an enhanced coverage.
    • Most times, members enrolled under group term insurance schemes do not have to undergo a pre-policy medical screening.
    • The death benefit that is paid to one’s nominee in the event of a member’s death is eligible for tax benefits under Section 10(10D) of the Income Tax Act, 1961.
    • Members can avail a comprehensive life cover without having to shell out a hefty premium.

    Benefits of Group Term Insurance Plans for Employers

    • A group term insurance policy is a hassle-free way to provide life coverage to all members of the group under a single policy.
    • It serves as an employee retention tool.
    • Premiums paid during a given financial year are eligible for tax rebates as per the Income Tax Act, 1961.
    • Employers can opt for a high coverage at a nominal cost.
    • Group insurance schemes are both flexible and customisable.
    • Employers can opt for additional coverage by purchasing riders offered by the insurance provider.
    • Members can be included or removed from the policy in a hassle-free manner.

    Joint Term Insurance

    Term insurance plans offer the most basic type of insurance coverage to policy buyers. These plans are purely protection-oriented and provide a risk cover against death on the life of the policyholder. If the policyholder passes away during the policy tenure, the insurer offers a death benefit payout to the nominee. However, since these plans do not acquire a cash value, they don’t provide survival or maturity benefits.

    The growing popularity of term insurance plans can be credited to the fact that they offer the policy buyer a high sum assured for a low premium rate. Traditionally, term insurance plans were purchased on an individual basis. Thus, one policy could only cover one individual. However, with changing times, life insurance providers have started offer joint term life policies. As the name suggests, a joint term insurance plan provides life cover to two individuals under a single insurance policy or contract.

    Features of Joint Term Life Insurance Plans

    • Multiple payout options:Claim payout options usually vary from insurer to insurer. However, in most cases, policy buyers can choose between a number of claim payout options, at the time of purchasing their policy. Thus, certain joint term plans offer the surviving policyholder a lump sum benefit in case of one policyholder’s death. In some cases, the death benefit may even be paid out in the form of a regular monthly income to the surviving policyholder.
    • Easier to manage: Purchasing and managing a number of insurance policies is not an easy matter, especially since you will have to make it a point to pay your due premiums on a regular basis to the insurer, to keep the policy from lapsing. In comparison, maintaining a joint term insurance plan is easier since you only need to pay a single premium for the joint cover. This way, you get the benefits of two separate policies, without the hassle and effort that goes into maintaining them.
    • Affordable pricing: In most cases, the premium rate that you will have to pay for a joint term insurance plan will be lesser than the premium that you would have to pay for two separate insurance policies. However, that being said, make sure to compare premium quotes of various insurance plans before selecting a particular policy.
    • Option to purchase riders: Similar to regular term insurance plans, life insurance providers offer policy buyers the option to enhance the protection accorded by their base plan by purchasing add-on riders. While the riders offered will vary from insurer to insurer.
    • Tax benefits: All life insurance policies will provide you tax benefits. Thus, even in the case of a joint term insurance plan, you can claim tax benefits under both Section 80C and Section 10(10D) of the Income Tax Act, 1961.

    Things to Consider Before Purchasing a Joint Term Life Insurance Plan

    A joint term insurance plan offers policy buyers a number of advantages over regular term insurance plans. Further, several leading insurance companies are now also offering these policies to business partners and parents who want to assign the child as the co-owner of the policy. Thus, if you are looking to purchase a joint term insurance policy, make sure to compare the various plans available and opt for one that provides you adequate benefits, at a competitive price.

    Individual Term Insurance Plan vs. Joint Life Term Insurance Plan – Which should you choose?

    The purpose of a term insurance policy is to provide financial security to a policyholder’s dependents in case of an unfortunate eventuality. Term insurance policies are extremely popular among policy buyers due to their affordable premium rates and comprehensive coverage. When purchasing term insurance, you can opt to purchase a traditional individual plan or a joint life cover that will cover both you and your spouse under the same policy.

    Joint Life Term Insurance Plan: A joint life term insurance plan is meant to provide coverage to both spouses under a single policy. Thus, in this case, policyholders will need to pay a single premium in order to maintain the policy. The way the benefit is paid out will usually vary based on the policy’s terms and conditions. In certain cases, if one policyholder passes away, the surviving spouse receives the death benefit payout, after which the policy terminates. In other cases, the policy might continue even after one policyholder’s death. Insurers might also offer a number of payout options, wherein the death benefit can be paid as a lump sum or in the form of instalments.

    The main benefit of purchasing a joint life term insurance plan is that it is usually less expensive than purchasing separate individual term insurance policies for yourself and your spouse. Further, you also don’t have to go through the hassle of maintaining two different insurance plans.

    Individual Term Insurance Plans: An individual term insurance plan offers coverage to a single policyholder. In the event of the policyholder’s death, a lump sum payout will be offered to the nominee. After the benefit is paid out, the risk cover will cease to exist. In this case, there is no option to extend coverage to your spouse under the same plan. However, you can choose to purchase a separate term insurance policy for your spouse, if the need arises. Purchasing individual term insurance policies might be the better bet if you and your spouse have different coverage needs.

    Which should you choose?

    Both joint life policies and individual term insurance plans have their own sets of pros and cons. You should decide which type of term insurance policy to purchase only after assessing your coverage needs, the needs of your dependents, your premium payment ability, etc.

    Further, before you opt for a particular policy, make sure to visit an online third-party insurance comparison website and compare at least a few different policies. This will give you an idea about the benefits that are typically offered by insurers and the premiums that are charged. In the end, you should always opt for a policy that offers you coverage as per your needs at a premium that is affordable for you.

    Convertible Term Insurance Plans

    A convertible term insurance policy is one that allows policyholders to convert their plan into a different life insurance product type during the tenure of the policy. Convertible term insurance policies are ideal for those individuals who are unable to pay a high premium for an endowment or whole life policy at present but wish to increase their coverage in the future. Convertible term insurance policies can be offered as standalone insurance policies or riders by life insurance providers.

    Features of Convertible Term Insurance Policies:

    • The process of converting your convertible term insurance policy to a different life insurance product is quite simple. As a policyholder, you are only required to submit a written request to your insurance provider to do so.
    • Insurance providers will charge a higher premium for convertible term insurance plans when compared to regular term insurance policies due to the built-in conversion option that is provided to you.
    • In most cases, the policyholder is not required to undergo a medical screening when converting his/her term insurance policy. However, this is dependent on the insurer’s and the policy’s terms and conditions.
    • In order to avail the conversion option at a later time during the policy tenure, the policyholder is required to pay all due premiums and keep the policy active. When purchasing a convertible term insurance policy, make sure to check if there is any stipulated time frame within which you are required to convert the policy.
    • If you have purchased a convertible term plan, you will need to keep in mind the fact that for each year that you don’t convert the policy, the resulting conversion rate can increase by a significant percentage. Thus, if you are looking to convert your term insurance plan, it is best to do so during the initial policy years.

    Difference between Convertible Term Insurance Plans and Renewable Term Insurance Plans:

    There is a key difference between term plans that are labelled “renewable” and the ones that are labelled “convertible”. In the case of renewable term insurance policies, the policyholder can renew or extend the coverage period at maturity of the policy. During renewal, the policyholder might have to pay an increased premium due to his/her age. On the other hand, in the case of convertible term insurance policies, these policies come with an inbuilt option to convert the term insurance plan into another life insurance product, such as a whole life plan or an endowment plan.

    Term Life Insurance under the Married Women’s Property Act (MWP Act)

    The primary purpose of purchasing a life insurance policy is to ensure that your dependents are financially protected in case something unfortunate happens to you. The payout provided by a life insurance policy can act as an income replacement and can go a long way in helping your family maintain their standard of living.

    However, purchasing a life insurance policy and nominating a dependent alone does not guarantee the financial security of your loved ones. If you have taken loans or have other liabilities, it is likely that the death benefit payout will be first used to pay off creditors. In this case, your nominee will only receive whatever is left of the benefit amount, if anything. Thus, it is a must to purchase life insurance policies under the Married Women’s Property Act (MWPA), especially if you have dependents.

    What is the Married Women’s Property Act?

    The Married Women’s Property Act was originally created to protect the financial interests of married women across India. As per Section 6 of the MWPA, if a life insurance policy is purchased under the MWPA by a married man, the sum assured that is payable under the policy upon the policyholder’s death will be the property of his wife/children alone. No creditor or lender will be able to claim any part of this payout.

    Further, the MWPA also states that married women can purchase a life insurance policy under the MWPA with her children as the beneficiaries. In this case, the husband will not be able to claim any part of the payout provided by the life insurance firm.

    Who can purchase a policy under the Married Women’s Property Act?

    Any individual who is a married man and is a resident of India can purchase a life insurance policy under the Married Women’s Property Act. Further, policies under the MWPA can also be purchased by divorcees and widowers. If the policy is being purchased by an individual who is a widower or a divorcee, his children will have to be named as beneficiaries of the policy.

    Married women may also purchase life insurance plans under the MWPA and nominate her children as beneficiaries. However, one thing to keep in mind is that this benefit can only be opted for by the policy buyer at the time of purchasing the policy, and only if you purchase the policy for yourself. Any type of life insurance policy can be purchased under the MWPA, regardless of the premium amount, policy tenure, etc.

    Whom can you name as a beneficiary when purchasing a policy under the MWPA?

    If you purchase a life insurance policy under the MWPA, you can either name only your wife as the beneficiary, only your child/children, or you can name both your wife and children as beneficiaries. Further, you also have the option of dividing the sum assured among your beneficiaries, either equally or in varying percentages.

    One thing that you should remember when naming your beneficiaries is that once the beneficiary has been assigned and the policy has been issued, you cannot change the beneficiary at any time during the policy tenure.

    How to go about purchasing a policy under the Married Women’s Property Act?

    The process of purchasing a life insurance policy under the MWP Act is extremely simple. As a prospective policy buyer, you will need to fill-up an MWPA addendum form along with your life insurance policy application form at the time of purchasing the policy. This addendum will be available with insurance agents and can also be downloaded through the insurer’s official website. You will need to remember that a policy can only be brought under the coverage of the MWPA at the time of purchasing it.

    Purchasing an insurance plan under the MWPA is a great way to ensure that your dependents are financially protected under any eventuality. Availing the benefits of the MWPA is all the more important for individuals who have taken loans or don’t have a steady source of income. Given how beneficial it can be to purchase a life insurance policy under the MWPA, it is a must that you don’t overlook this option at the time of buying your policy.

    What does a Term Insurance Plan cover?

    • Natural death: Term insurance plans provide a cover against natural death, i.e., if the policyholder were to pass away in his/her sleep, a death benefit will be paid out to the nominee.
    • Death due to a medical condition: If the policyholder happens to get diagnosed with an illness after purchasing an insurance plan and succumbs to an untimely death as a result of the illness, a death benefit will be paid out to the nominee.
    • Accidental death: Term insurance plans also provide a cover against accidental death. Accidental death can include death involving vehicles, death due to fire, death from accidentally falling off of a building, death due to a work-related accident, death due to electric shock, etc.
    • Death outside the country: In most cases, term insurance plans also cover deaths that occur outside the country. However, if you are planning to travel outside the country, you should make it a point to inform your insurance provider about your travel plans in advance. In certain cases, if you are travelling to a high-risk country or a country known to be unsafe, life insurance coverage can be denied to you during your stay in that particular country.

    In conclusion, you will have to keep in mind that the inclusions and exclusions mentioned above are a general list, and may vary from plan to plan. Different life insurance companies may have varied clauses with regard to the exclusion, thus make sure to read through the policy brochure before purchasing a term life insurance policy. Also, make sure to inform your nominee about the coverage offered by your plan in order to avoid any hassles, at the time of filing a claim.

    Term Life Insurance Policy Renewal

    If you have purchased a term life insurance policy, you will be expected to make the due premium payments to your insurance provider, as per the premium payment schedule. Typically, insurance companies provide a 15-day or 30-day grace period to policy buyers, during which time they can pay their premium amount without paying an additional interest charge. However, in case you haven’t paid the due premium amount before the completion of your grace period, your policy will lapse.

    You will have to remember that not all insurance plans lapse due to non-payment of premiums. For example, in most cases, term insurance plans lapse if the policyholder doesn’t pay the due premium amount within the grace period. On the other hand, if you have a traditional insurance plan that has already acquired a surrender value, your insurance policy will not lapse if you stop paying the premium. In this case, your insurance policy will simply continue as a paid-up policy with a reduced sum assured.

    Reviving a Lapsed Policy

    In the case of insurance plans that have lapsed, insurance providers usually offer policyholders the option to revive the insurance plan within a certain number of years - usually ranging between 2 years to 5 years. Post this revival window that is provided to you, insurance firms usually do not entertain policy revival requests.

    In order to revive a lapsed policy, you will need to pay all due premiums from the date of the first unpaid premium with the applicable interest rate. In addition, if your policy has been lapsed for a while, you might also have to undergo a medical test to prove your insurability to your insurer.

    Importance of Renewing a Term Life Insurance Policy

    Throughout our lives, we do everything we can to protect our loved ones. We ensure that our homes are safe and that the schools our children go to are well-protected. Along with such measures, we also need to ensure that our family is protected against our death. This is when we should realise the importance of life insurance policies. A life insurance policy offers financial protection to our family members in case the unfortunate were to pass. Various types of life insurance policies are available in the market - ones that offer savings, ones that offer a channel to make investments, etc.

    A term insurance policy is one such life insurance policy type that carries out the basic function of providing life cover. It does not offer savings or returns of any kind. Hence, term plans are one of the most popular life insurance policies. They are simple and affordable. A few insurance companies also provide certain riders to enhance the plans.

    As much as it is important to purchase a life insurance policy, it is equally important to renew the policy you hold. If you possess a term plan, you should ensure that you renew the plan so that the life cover is extended.

    While purchasing a term insurance policy, it is a good idea to pick one that has the renewability option. Renewability allows you to enjoy life cover after completion of the policy term chosen by you, initially, without having to purchase a new policy or undergo a medical examination.

    Here’s why renewing your term life insurance is important:

    • Extended life coverage:The primary purpose of a life insurance policy is to provide financial protection to your family. By renewing your policy, you will enjoy life cover for a duration as chosen by you. However, if you fail to renew your policy and you happen to face sudden death, your family may have to face financial distress. In the event that the death occurs while the policy is in force, your family will receive a lump sum benefit.
    • Avoids the hassle of buying a new life insurance policy: If at a later point in time, you decide to purchase a term insurance policy, it will turn out to be more expensive than how much it would cost if you had renewed the policy. Renewal of policies does not require medical examinations and even if the insurer changes the premium amount, it will only be a marginal change. But if you buy the policy a few years later when you’re older and your mortality rate is higher and also when you might be suffering from a health condition, the premium payable will be much higher than the current premium you pay.
    • Provides tax benefits: Life insurance policies qualify for tax benefits under the Income Tax Act, 1961. According to section 80C of the Act, you can claim the premiums paid in a year towards your life insurance policy. According to section 10 (10D) of the Act, the benefits you receive such as the maturity benefit or survival benefit are tax-exempted under certain conditions. Hence, renewing your term insurance policy will mean that you can continue to enjoy such benefits.

    Points to note about term insurance renewal

    • The renewal date of the policy depends on when the risk cover of your policy commenced. So, if you have a 5-year term insurance policy, the renewal date is, typically, 5 years from the day of commencement of the policy.
    • The insurance company is required to notify you about the date of renewal. The notice period for the same, in most cases, is 14 days. However, the period could differ based on the plan and the insurer.
    • Certain policies are designed in such a way that it is automatically renewed, provided you have paid the renewal premium, unless you notify them otherwise.
    • Insurance companies may allow certain changes to be made in the policy during renewal.
    • If changes can be incorporated, it is wise to renew the policy and ascertain if the policy suits your present-day lifestyle. If there has been a major change, like marriage or birth of a child, you may want to increase the sum assured amount.

    A term insurance policy is an assurance to you that your family will manage their expenses even in your absence. Renewing a policy is no rocket science and it can be done online through the websites of the insurance companies. So, don’t think twice to renew your term insurance policy which will secure the future of your loved ones.

    Term Insurance Plan vs. Endowment Plan vs. Unit Linked Insurance Plan (ULIP)

    Criteria Term Plan Endowment Plan Unit Linked Insurance Plan (ULIP)
    Purpose Pure protection Protection plus investment Protection plus more investment opportunities in equity and debt
    Benefits Death benefits Death and maturity benefits Death, maturity and withdrawal benefits
    Returns on Premium No Yes Yes
    Premium costs High sum assured at low premiums Premiums are higher for same sum assured Premiums are higher for same sum assured
    Loans Loans are usually not available Loans against policy is available Partial withdrawals can be made after 3 years

    Term Life Insurance vs Permanent Life Insurance

    Life insurance offers the much needed financial security to the dependents of a person following his/her unexpected demise. There are different types of life insurance policies including term insurance, permanent life insurance, ULIPs, etc. Term life and permanent life are the two most common forms of life insurance available for customers. When it comes to choosing between these two, the decision must be made based on your personal needs, affordability, financial goals, dependents’ needs, etc. Let’s discuss the pros and cons of these two plans in detail to help you narrow down the choices.

    Pros and cons of Term insurance

    Term life insurance is simplest form of life insurance. It is also the cheapest type of life insurance you can buy. Term plans can be bought for a specific period, say 5 years or 10 years or even 30 years, depending upon your requirement. The cost of insurance gets higher with your entry age. For instance, a term plan for a 30-year old person is much cheaper than a term plan for a 50-year old person. Once entered, the premium amount for term insurance remains the same as long as the policy is renewed. Hence, it is better to enter a term insurance plan at a very young age.

    There are a few limitations associated with term insurance plans. One of the major limitations of term insurance is that it does not offer any maturity benefits at the end of the policy term. If a policyholders outlives the policy term, the plan will come to an end and no payout of any sort will be paid to the insured person. If you need protection for a longer time, you must take a separate over after one expires or you need to convert your term plan into a whole life plan (a form of permanent life insurance plan). Lack of maturity benefit is one of the reasons why term plans are much cheaper than other varieties of life insurance.

    Pros and cons of Permanent Life Insurance

    Permanent life insurance is a kind of life insurance cover that remains active throughout a person’s life. This comes with an insurance as well as investment component to provide maximum benefit to policyholders. One of the major advantages here is that the death benefit is guaranteed to the dependents as long as the policy remains active. The cash value associated with the investment part grows steadily and matures at a guaranteed rate. Also, the premium amount remains the same throughout the life of the policyholder.

    Among the downsides of permanent life insurance, it has been often stated that these plans are a little more complicated than term life insurance plans. Since there is an assured return, permanent life insurance is way more expensive than term plans. The cash value growth in this type of insurance is extremely slow, and it takes more than 10 to 15 years to accumulate a decent amount.

    Choosing between Term or Permanent Life Insurance

    When it comes to choosing between term or permanent life insurance, various factors such as age, health condition, financial requirements, family needs, retirement plans, debts and liabilities, etc. must be taken into consideration. Also, the cost of insurance determines the choice in many cases. Term plans are ideal for replacing your income and paying for your liabilities. Permanent life plans are most suitable for estate planning. Also, permanent life is ideal if you have to provide for lifelong dependents.

    Conclusion

    Both term life insurance and permanent life insurance policies come with their own set of advantages. Choosing between these policies must be done after understanding of your financial situation and determining the type of protection you need for your dependents. There are various life insurance companies in the market that offer both plans to their customers. Make sure that you do a thorough research on the available policies before choosing a life insurance plan that meets your expectations.

    Level Term Insurance - All you to need to know

    A level term insurance policy is a type of term insurance plan that is most commonly offered by Indian life insurance providers. Under a level term insurance plan, the premium payable will be determined before the risk cover commences, and this premium rate will remain constant for the duration of the policy tenure. Policy tenures for level term insurance plans can range between 5 years and 30 or 40 years, in India.

    Under this type of policy, the premium rate does not rise with the policyholder’s increasing age since the premium payable for each policy year is averaged by the insurance provider. Thus, if you choose a longer policy tenure, you premium payable will be higher, and vice versa. Most level term insurance policies can be renewed by policyholders, at the completion of the policy tenure. However, at renewal, the insurer may charge you a high premium rate due to your increased age. Also, if the policyholder’s health has deteriorated significantly or if the policyholder has developed certain life-threatening diseases or ailments, the insurer may not allow the policyholder to renew the policy.

    Certain insurers also provide policyholders the option to convert their term insurance plan into a whole life policy or an endowment assurance policy. However, this option varies from insurer to insurer, and customers might not always be offered this benefit. Thus, when purchasing a term insurance policy, it is advisable to start young and opt for a long policy tenure, which can provide you adequate coverage during your employment years.

    Increasing Term Insurance Plans

    A term insurance plan is one of the most affordable insurance plans that you can purchase for yourself. This type of insurance plan works in a very simple manner. It provides you protection for a period of time. In case something happens to you during the policy term, the nominee receives a lump-sum amount called the death benefit and the policy terminates thereafter.

    The cover amount that you choose is of paramount importance. The sum assured should be such that it should be enough to take care of your family’s needs even if you are not around. The inflation is a huge factor, and hence the cover amount which might be sufficient in today’s time may not be enough a few years later. Therefore, you can choose an increasing term insurance plan, where your sum assured increases by a certain percentage. For example, if your sum assured is Rs.1 crore, then the cover amount will increase by 5% from the next policy term and will continue to increase until your policy is no more in force.

    We will find out a bit more about increasing term insurance plans and how it can be beneficial for you.

    Things to know about increasing term insurance plans

    • Premiums: One of the factors that make increasing term insurance plans so brilliant in nature is the fact that the premiums remain constant even if your cover amount continues to increase. The reason is that the insurance company has already calculated the premium amount you would have to pay as your coverage would increase with each passing term. It is also understandable that the premium for an increasing term insurance plan would be slightly higher than a normal term insurance plan. However, the premiums are still cheap and affordable which makes purchasing an increasing term insurance plan a very good option.
    • Sum assured: it is understandable that the coverage will increase with each policy term so that even if the economy inflates, your family will be able to take care of their financial needs in your absence. However, some plans may have a limit on the increment and the increment may stop after the maximum limit is reached. Fortunately, this information is relayed beforehand.
    • Benefits: When we talk about the benefits that you would receive from your increasing term insurance plan, there are not too many differences if compared to a normal term insurance plan. Just like a normal term insurance plan, if something happens to you, the nominee receives a lump-sum amount called the death benefit.The insurance provider gives the beneficiary or nominee the option to receive the death benefit in a lump sum or a part of it in instalments over a period of time.
    • Riders: There are various plans which offer riders. It is always recommended that you purchase a rider for yourself based on your needs, lifestyle, etc. as they provide extra protection to you. Though you may have to pay a slightly higher premium, it is worth purchasing a rider in the long run. Some of the types of riders that you may come across are Critical Illness Rider, Waiver of Premiums Rider, Accidental Death and Permanent Disability Rider, etc.
    • Tax benefits: Apart from the death benefit that your nominee would receive in case of your unfortunate demise, you can also avail various tax benefits under Section 80C of the Income Tax Act, 1961.

    Advantages of having an increasing term insurance plan

    There are certain advantages of availing an increasing term insurance plan such as:

    • Affordable in nature: An increasing term insurance plan, like any other insurance plan is extremely affordable. The premium remain constant throughout the policy term which makes purchasing an increasing term insurance plan a brilliant financial decision.
    • Helps in taking care of financial requirements: One of the major reasons why you should purchase term insurance for yourself is to help in taking care of your family’s immediate financial liabilities in case you are not around in future. Purchasing an increasing term insurance plan serves the same purpose.
    • Ideal product keeping inflation in mind: As mentioned earlier, inflation always play a major role in your decision to choose an appropriate cover amount. However, you may never know how much amount might be sufficient in the near future. The coverage that may be enough to take care of your family’s day-to-day needs at present may not be enough in times to come. Hence, an increasing term insurance plan ensures that your family is able to take care of their financial needs regardless of how the economy is performing and even if you are not around in the future.

    Some of the increasing term insurance plans that you can purchase

    Below are some of the term insurance plans that you can purchase for yourself:

    • SBI Life Smart Shield Plan
    • Birla Sun Life Protector Plus Plan
    • Aegon Life Increasing Term Plan
    • Max Life Super Term Plan

    Thus, these are some of the things that you need to know about how an increasing term insurance plan is beneficial for you. However, before purchasing a product, you will have to evaluate your needs and the amount of coverage you will require. You will also have to properly research and compare various other term insurance plans before you decide to purchase a term insurance plan which you feel will be suitable for you. You must only choose a plan based on your financial needs and capabilities.

    Decreasing Term Insurance Plans

    Term insurance is one of the purest forms of insurance you can purchase for yourself. It provides only a protective cover and in case something happens to you, the nominee appointed by you will receive a lump-sum amount called the death benefit. However, one of the problems that people are not aware of are the types of term insurance policies.

    There are various types of term insurance policies which you can avail for yourself based on your needs and other financial requirements. For example, the return of premium term plans, returns your premiums in case you survive the policy term. Similarly, increasing term insurance plans allow you to increase your cover amount as your responsibilities increase over a period of time, especially keeping in mind your other financial requirements, you may have to increase your cover amount. A decreasing term insurance plan is the opposite of an increasing term insurance plan, where you have the option of reducing your cover amount over a period of time.

    Why should you purchase a decreasing term insurance plan?

    You purchase a term insurance policy since you may have financial liabilities to take care of, and a term insurance plan provides coverage to you and your family. In case something happens to you, the death benefit provided to the nominee can help in paying back the loan and other financial liabilities that you may have. However, a decreasing term insurance plan works in a different manner. As you pay your loan installments on a yearly basis, the outstanding loan balance reduces and so does the requirement for a higher sum assured as well. The cover amount chosen by you helps in clearing off the loan liabilities in case something happens to you, and as these liabilities decrease, so should the cover amount. For example, if you are a 30-year old person and purchase a decreasing term insurance plan with a cover amount of Rs.20 lakh for a period of 20 years. According to your plan, the cover amount at the end of each policy term will decrease by 5%. Hence, your new sum assured after the end of the first policy term will be Rs.19 lakh, Rs.18 lakh for the second year and so on. In case you meet your demise when the term is still in force, the nominee appointed by you will receive the available cover amount post reduction. For example, if you die in the 10th year of your policy, then the nominee will receive a sum assured of Rs.10 lakh, which will allow the beneficiary to pay off the remaining financial liabilities.

    Advantages of having a decreasing term insurance plan

    There are certain advantages to having a decreasing term insurance plan. They are as follows:

    • Cheap and affordable premiums: A decreasing term insurance plan just like any other term insurance policy is cheap and affordable in nature. A decreasing term insurance plan is even cheaper than a normal term insurance plan since the cover amount decreases due to which the premium rates also decrease.
    • Provides financial security to your loved ones: Whatever types of term insurance plans you purchase for yourself, the basic idea behind buying an insurance plan is to ensure that the future of your loved ones remain safe and secure even if you are not around in future. A decreasing term insurance plan also provides a financial cover to your loved ones and ensures that even if you are not around in future, your loved ones do not have to face any monetary problems and they are able to take care of their day-to-day needs.
    • Tax savings: Just like any other term insurance plan, a decreasing term insurance plan also allows you to enjoy various tax benefits as well. You can enjoy a tax exemption of up to Rs.1.5 lakh on the premiums paid by you under Section 80C of the Income Tax Act, 1961 and on the benefits received under Section 10 (10D) of the Income Tax Act, 1961.

    In the end, a decreasing term insurance can be beneficial to you provided you have loans and other financial liabilities which are expected to decrease over a period of time. If you are sure that your loan and other financial liabilities are expected to decrease with time to come, then it is suggested that you purchase a decreasing term insurance plan for yourself. A decreasing term insurance plan not only provides you with a loan protection cover but also provides your loved ones with a protective cover and ensures that the future of your loved ones is safe and secure even in your absence.

    Term Insurance with Return of Premium(TROP) Plans

    The most unique feature about term insurance plans is that there is no return on premiums in the event that the policyholder survives till the end of the term. Many people do not opt for a term plan because if they survive the term, then the money is gone. There is no return on investment with a term plan. However, there are a few insurance companies in the market that offer returns on premiums with their term plans. There are not too many of these plans available, but with research one can find a term plan that provides this benefit. Under these plans, if the life insured is still alive at the end of the plan term, then they will receive the premiums paid minus any fees, administrative charges, and so on. Some of the top Return of Premium Term Plans in India are:

    LIC’s Jeevan Mangal Plan

    The Jeevan Mangal Plan from Life Insurance Corporation of India is a micro insurance product that returns all premiums paid during the policy tenure, on the date of maturity.

    Key Features of LIC’s Jeevan Mangal Plan:

    • Any individual between the ages of 18 years and 60 years can purchase this plan.
    • The maximum age at maturity under this plan is 70 years.
    • One can opt for a policy tenure between 10 and 15 years if it is a Regular Premium policy and a policy term of 10 years for single premium plans.
    • Since this is a micro-insurance plan, the premium rates are also extremely affordable. The minimum premium amount for this plan is Rs.15.
    • One can opt for a sum assured between Rs.10,000 and Rs.50,000.

    Max Life Premium Return Protection Plan

    The Premium Return Protection Plan from Max Life Insurance is a policy that guarantees the return of all premiums paid should the policyholder survive till the completion of the plan tenure.

    Key Features of the Max Life Premium Return Protection Plan:

    • A death benefit is paid as a lump sum amount if the life assured meets with an untimely death.
    • One can opt for a policy tenure of 20 years, 25 years, or 30 years.
    • The minimum age at entry is 21 years and the maximum maturity age under this plan is 75 years.
    • Premiums can be paid on a yearly, semi-yearly, quarterly, or monthly basis.
    • The minimum premium payable for this policy is Rs.8,500 p.a.

    ICICI Prudential LifeGuard

    The ICICI Prudential LifeGuard Plan comes with three plan options – Level Term Assurance, Level Term Assurance with Return of Premium, and Single Premium. Policy buyers can opt for any plan option as per their requirements.

    Key Features of ICICI Prudential LifeGuard Plan:

    • Policy buyers will have to be between the ages of 18 and 55 years to purchase this plan.
    • One can opt for a minimum policy tenure of 10 years and a maximum policy tenure of 30 years.
    • The maximum age at maturity for this plan is 65 years.
    • The minimum premium amount payable for this plan is Rs.2,400 p.a.

    Tata AIA Life Insurance iRaksha TROP

    The iRaksha TROP from Tata AIA Life Insurance is an online term insurance plan with a ‘Return of Premium’ feature. Thus, this plan provides a death benefit in the event of the policyholder’s untimely demise or a survival benefit if the policyholder survives till the end of the policy tenure.

    Key Features of Tata AIA Life Insurance iRaksha TROP:

    • The policy can be purchased by any individual between the ages of 18 years and 65 years. The maximum maturity age for this policy is 75 years.
    • The minimum sum assured under this plan is Rs.50 lakh.
    • One can opt for a policy tenure between 10 and 30 years, when purchasing this plan.
    • Premiums can be paid on an annual or semi-annual basis.
    • Policy buyers who opt for a high sum assured are eligible to receive discounts.

    MetLife Suraksha TROP

    This plan is a non-participating term insurance plan which is offered at a nominal cost by the insurer. Under this plan, upon maturity of the plan, the policyholder will receive the sum of all premiums paid and the Guaranteed Additions.

    Key Features of MetLife Suraksha TROP:

    • The plan pays a death/maturity benefit to the policyholder/nominee, based on the eventuality.
    • The policy can be purchased by any individual between 15 and 50 years of age.
    • The minimum sum assured for this plan is Rs.2 lakh.
    • One can opt for a policy tenure of 15 years or 20 years, at the time of purchasing the policy.

    Why Should One Have At Least Two Term Insurance Plans?

    Purchasing a term insurance plan is a brilliant decision that one can make. A term insurance policy provides your family with a protective cover in case something happens to you; your family will be financially covered and does not have to undergo any monetary turmoil in your absence. This allows you the necessary peace of mind while you go about taking care of any financial liabilities that you may have.

    However, having two term insurance plans can be even better. You are provided double cover and in case something happens to you, the nominee gets double cover, which ultimately ensures that he/she is able to take care of all the financial requirements in your absence without the fear of the cover amount getting exhausted anytime soon. So, what are the benefits of having two term insurance plans? We discuss below.

    The benefits of having two term insurance plans

    The following are the benefits of having two term insurance plans:

    • Extra protection: Having two term insurance policies means that you will you will have more protection. In case something happens to you, you can be at peace knowing that your family is getting a double layer of protection.
    • Death benefit: In case of your death, the nominee can get not one but two lump-sum amount called the death benefit.
    • Hedge against claim-rejection: You may not have to worry if you have provided the insurance company with all the correct and necessary information regarding your health before signing on the dotted line. However, there can be that small percentage of chance where your claim may get rejected which might ultimately put your family under severe financial trauma. Having two term insurance plans ensure that even if the claim for one of your policies gets rejected, you have the cushion of another policy which ensures that the nominee receives the claim amount. It is also important that you also check the claim settlement ratio of the insurance company before deciding to purchase insurance.
    • Reaching your milestones: Having two term insurance plans can help you plan for the milestones in your life. You will have the peace of mind and you will be able to take care of your future dreams such as building a home, getting your children educated and married, etc. Having two term insurance policies means that the nominee will be in a better position to take care of your financial liabilities in case of your absence.

    Having two term insurance plans will naturally be slightly expensive as compared to having one term insurance plan, but anyone will surely prefer to have that extra layer of protection. Having two term insurance plans means that you will be able to take care of your future goals without having to worry about the financial trauma that your family may undergo in your absence as two term insurance policies mean that the nominee will receive the extra cover amount. It is also perfectly legal to have more than one term insurance policy provided that you have disclosed all the relevant information about your health and lifestyle and the combined sum assured of all policies do not exceed your human life value. Having two term insurance policies also provides you the assurance that in case one of the policies do not work out and the claim amount gets rejected due to whatever reasons concerned, your family has the cushion of having extra insurance and are able to take care of their financial requirements even in your absence. Thus, these are some of the few reasons why you should have two term insurance policies for yourself.

    Term Insurance Claim Process

    In the event that you need to make a claim from the insurance company for the benefits of a term plan, the steps listed below is the general process to be followed:

    Step 1

    • Procure a claims form either on the official insurance company’s website, at the branch or through your agent.
    • Fill and submit the form online, through email, at the branch or through post.
    • Any documents required will also have to be sent to the insurer. You need to send a duly-attested photo ID and address proof.
    • The claim will be formally registered once the written request for claim settlement is received at the insurer’s branch or Claims cell.

    Step 2

    • The insurer or the claim’s team of the insurer will review the request submitted by you. All documents will be verified. If more documentation is required, the insurer will send you a request for the same.
    • You will receive SMS/Email updates or be informed of the status via phone.
    • You can also track the status of your claim online. Tracking the status can also be done through the customer care of the insurer.

    Step 3

    • If everything is in order and the insurer approves your claim, the benefit will be paid out. Nowadays, most insurance companies use electronic modes of payment, so your money will be credited directly to your bank account.
    • If the insurer finds that your claim is not valid, you will be sent a rejection notice stating the reasons why.
    • The general timeline for claims settlements as stipulated by the IRDAI is:
    • You need to raise the claim within 15 days from the date of the death or the incident.
    • For cases where the claim is made after holding the plan for 3 years (non-early cases), the claim should be settled within 30 days of receiving the claims request along with all necessary documentation.
    • For cases where the claim is made within 3 years of holding the policy (early cases), the claim should be settled within 180 days of receiving the claims request along with all necessary documentation.

    Term Insurance Premium Calculator

    Term Insurance Premium Calculators are handy tools that are specially designed to help potential term plan customers to calculate their premiums for the cover they wish to opt for. The calculators are easily available online and are very simple to use. Customers can adjust the sum assured to see different premium rates. To use these calculators, you need to follow the steps given below:

    • Enter your details such as date of birth, annual income, gender, marital status, number of children (if any), life cover and so on.
    • You may be asked about your lifestyle habits like if you are a smoker or not.
    • You can then choose a sum assured you desire and for how many years you wish to be covered.
    • You will then have a choice of allowing your nominee to receive a lump sum or a monthly income, or both.
    • Once you hit “Calculate”, you will get a list of term insurance plans available in the market with the premiums required.
    • You can view and compare different plans.
    • You can make adjustments to the sum assured to see different premium rates for different coverage.

    Term Insurance Guidelines

    The most important step while taking a term plan is to determine how much coverage would be sufficient. Ensure you choose a sum that will help fulfill the needs of your loved one in your absence.

    • Choose a tenure that gives you optimum cover.
    • Always research, compare and then buy.
    • Take into consideration inflation and rising costs of living before you settle on the coverage amount.
    • Analyse your budget to see if you can accommodate a higher premium in order to get more cover.
    • Don’t ignore the riders. Check to see if the additional premium is worth the additional protection.
    • Read the policy brochure before buying a plan.

     

    • What's Hot?

      A large number of Indians are uninsured: A report by IRDA shows

      According to a handbook by Insurance Regulatory and Development Authority (IRDA) published in 2016-17, only 32.81 crore Indians have life insurance. Even if one assumes that few of the policies were revived, the numbers would not go up more than 33 crore. If we also take into account the number of people who are holding group insurance policies such as PMJJBY, the number of Indians who are insured is more than 40 crore. This is a huge problem.

      This is a huge problem because, in developed countries, almost 90% of the people have a life insurance policy and also enjoy other social security benefits. In India, the number of people who have got insurance is grossly underinsured as they have inadequate coverage. According to IRDA, the average cover amount does not go more than Rs.3 lakh, and even if an individual purchases more than a policy, the chances are that he/she may not have more than Rs.4 lakh as the cover amount. Those who come under PMJJBY policy, do not get cover for more than Rs.2 lakh which is extremely inadequate.

      However, a large number of people are purchasing ULIPs, which has certainly helped in the growth of these insurance companies as customers are interested in purchasing a tool which not only provides them with insurance but also helps in maximising of their savings. 42% of the profits enjoyed by private companies are due to the selling of ULIP plans, but the real problem starts after that. A majority of Indians who have purchased a ULIP surrender their plan as soon as they start getting good returns on the investment. A very few people are interested in purchasing term insurance for the only situation where the nominee will get money is if the insured dies.

      It is clear that people do need other insurance products where apart from being provided with a cover, they also get money in return without any uncertainty looming over them. Till the time a product like this introduced, it is safe to say that the people of India are inadequately insured by miles and are living extremely dangerous lives.

      Reasons why Life Insurance is a great sector to invest in

      Life Insurance is one of the oldest forms of business to exist in India when Oriental Life Insurance Company was formed in 1818. Earlier it was difficult to purchase a share directly from an insurance company until ICICI Prudential Life Insurance Company got listed followed by SBI Life Insurance. There are various reasons why life insurance is one of the best sectors to invest your money in.

      Low penetration is one of the reasons why one should invest their money in a life insurance company. Some of the reasons are that India’s ratio of premium to GDP as compared to the world median is low and stands at 2.7% as compared to countries like Thailand which is 4% and South Africa which is 11%. One of the other ways to look at is the ratio of the number of policies doled out to the population of India which goes as low as 2% compared to 80% in developed countries.

      Other reasons why one should invest in a life insurance sector is that people are underinsured. Despite a majority of people in India who have an insurance do not have substantial sum assured to cover them. This means that, since a large number of people are not buying adequate coverage for themselves, there is a large opportunity for the insurance company to grow faster. The fact that India is one of the largest economies in the world and is growing at almost 1.2%, the chances are high that the per capita income will increase at a quicker pace. Apart from that pension funds and foreign institutional investors love investing in life insurance due to the visibility it has to offer. The fact that they have benefitted from the investment they had made, these bodies are likely to hold on to these stocks for a longer period of time. The insurance subsidiaries of companies like SBI and ICICI are getting exposed directly to these investment institutions which plays a huge role in how the face of the industry is changing.

      The budget which was held this year exempted the investments made through from Unit Linked Insurance Plan (ULIP) from the Long Term Capital Gains (LTCG) tax which means that more money is expected to flow into this tool which will help the insurance companies to grow. Also, the new business in life insurance premiums has grown at a rate of 24.3% and is expected to surge due to tax breaks. There are chances that the tax slab might be reduced to 12% in future which will also play a role in the growth of this sector.

      Due to these many reasons, the life insurance industry is likely to become one of the best sectors to invest one's money in. It is important that one looks at how much he/she is worth and then decide what should be the appropriate amount for him/her to invest his/her money in this sector.

      Why do agents not sell you a term insurance plan?

      It is extremely necessary to have insurance for you never know what can happen to you in the future and thus you would not want your family to suffer from a financial point of view. Term insurance is one of the most economical insurance plans that you can purchase. However, your agent may not be so keen on selling you a term insurance plan and there are various reasons behind this.

      • Low premium, low commission-Term insurance plans are considered to be the cheapest schemes that you can come across. Since the aim of these type of plans is to only provide you cover, the nominee receives a death benefit in case you are not around in the future. Hence, the premiums you pay are extremely cheap in nature. The commission which your agent will receive from the insurance company is part of the premiums you pay, which will subsequently be very low in nature. Hence, an agent is not so keen on selling a term insurance plan to their customers.
      • Lack of returns may not interest the customer-A part of the fault lies with the customer as well. Various consumers do not buy a term insurance plan since it does not provide any returns or benefits to them. A very common misconception among the people is that they will have to die for their family to avail the death benefit and hence they are not so keen on buying a term insurance policy. It becomes equally difficult for the agent to make them realise that only the death risk is covered and the coverage provided is quite large in comparison to the sum assured provided in other life insurance plans. Since the customers don’t make the effort of understanding how term insurance can be useful for them, an agent thus stays away from the hassle of explaining them the benefit of availing a term insurance plan.
      • Inadequate training provided to the agents-The agents are not trained properly when it comes to selling term insurance plans as they themselves do not have adequate knowledge regarding how a term insurance plan works. One the reasons for this is that the agency focuses on their people selling plans to their customers with high premiums as this fetches them more commission. Hence, not much importance is given to term insurance schemes.
      • Customers are unaware of such plans-Majority of the customers in India are unaware of term insurance plans. They do not know the objective these schemes carry and the benefits they provide to its consumers and hence they have no knowledge of the existence of such plans. Thus, an agent does not take the effort to help a person learn what a term insurance plan is and thus, sells other insurance policies which would fetch them a higher commission.
      • The agents themselves are unaware of such plans-Most of the agents themselves are unaware of the existence of term insurance plans. Since term insurance policies are cheap in nature and do not fetch high commissions, the agencies do not make any effort in helping them learn about the benefits offered by this type of insurance plan. Thus, it is the customer who has to bear the brunt of their agent’s careless attitude and lack of understanding of the product.

       

      What should you do in such cases?

      Purchasing not only a term insurance plan but any type of plan is an important process and hence it is always advisable that you have good knowledge regarding the type of insurance products available in the market.

      If you at all take the help of an agent, ask them to tell you about term insurance plans. If your agent avoids your query and tries hard to sell you other insurance plans, it is better that you move away from him/her and look for another person to help you buy an adequate term insurance plan for yourself.

      You may not need an agent to help you purchase a term insurance plan either as most of the information is given online. You can purchase them online instantly as it not only helps you but also the insurance company since they do not have to pay anything to the agent, and your premiums are utilised for the managing of your policy only. There are various websites which help you compare the best plans available for you based on your financial needs and thus, it is always advisable that you analyse the plans in which you are interested in before purchasing the most suitable one for you.

      Life Insurance Payouts and TDS

      A common misconception about life insurance policies is that the policyholder doesn’t have to pay any tax on the payout received, at maturity of the policy. However, the fact remains that maturity payouts are eligible for TDS deductions. Thus, if the policyholder’s PAN is available, TDS will be deducted at the rate of 1% of the total maturity payout. In case the policyholder’s PAN is not updated or unavailable, there will be a 20% tax deduction on the maturity claim amount, under Section 194DA of the Income Tax Act, 1961.

      However, you will have to keep in mind that payouts received under certain life insurance plans will be totally exempt from tax deductions, under Section 10 (10D) of the Income Tax Act, 1961. These policies are:

      • Life insurance plans that were purchased after 1 April 2003 but before 31 April 2012, where the premium payable per policy year was over 20% of the sum assured amount.
      • Life insurance plans that were purchased after 1 April 2012, where the premium payable is over 10% of the sum assured amount.
      • Life insurance plans that have been purchased post 1 April 2013 for disabled individuals or individuals suffering from certain ailments, where the premium payable exceeds 15% of the sum assured amount.

       

      Things to note

      • The TDS-related guidelines mentioned above are not applicable to death claim payouts.
      • TDS will only be applicable if the maturity claim payout is over Rs.1 lakh.
      • In the case of NRIs, if the policy is exempt from tax deductions under Section 10(10D) of the Income Tax Act, no TDS will be deducted. On the other hand, if the policy does not qualify for tax benefits under Section 10(10D), TDS will be deducted as per Section 195 of the Income Tax Act.
      • In case of individuals who live in countries where the DTAA (Double Taxation Avoidance Agreement) is followed, no tax will be deducted.
      • As per Section 194DA of the Income Tax Act, policyholders will have to declare their maturity income as part of the total income, for TDS to be deducted.

       

      Returns from Life Insurance Policies

      Life insurance prepares an individual for unforeseen circumstances. Individuals who have dependents should ideally buy a life insurance policy in order to financially support his/her family when they are not around to help them out.

      Though this is the primary reason why life insurance policies were created in the first place, most people tend to look for policies that help them get returns. Insurance agents try to lure their clients into buying policies that apparently give high returns. This leads the individual to make the wrong decision while buying a policy. While in actuality, the returns received on life insurance policies are very low. Traditional life insurance policies that promise returns in the form of savings only offer about 3-5% returns. This is regarded extremely low in comparison with other savings instruments.

      Final word

      Hence, purchasing a term plan for life cover and a different savings instrument for long-term returns would be a better idea compared to buying a life insurance policy hoping it would serve both purposes. One can buy a simple and affordable plan for life cover and use the amount he/she wishes to use to enhance the term plan to purchase a good savings product that would provide more profitable returns. Plus, policyholders can always enjoy tax benefits under section 80C of the Income Tax Act.

      The Effect of GST on Insurance Premiums

      The Goods and Services Tax, more commonly known as the GST, came into effect on 1 July 2017, after being passed by the Lok Sabha in 2016. The GST, which is a value-added tax (VAT), will be levied by the Government of India on the supply of most goods and services. Thus, after its implementation, the GST has replaced a number of indirect taxes that were previously levied by central and state governments.

      Impact of GST on Insurance

      Before the introduction of the GST, a standard service tax of 15%, which comprised of the Basic Service Tax (14%), Swachh Bharat Cess (5%), and the Krishi Kalyan Cess (50%), was levied on various goods and services. Currently, the tax levied on insurance under the GST regime amounts to 18%, which is a 3% increase on what was charged earlier. Thus, after the GST came into effect, the premium payable for various insurance products have risen. GST has had an effect on both life insurance and general insurance businesses in the country.

      • Life Insurance: A life insurance policy provides a risk cover against death on the life of the life assured. Thus, if the life assured meets with an untimely death during the policy tenure, a death benefit will be paid out to his/her nominee.Life insurance providers offer a range of different insurance plans, such as term insurance plans, endowment plans, whole life plans, money-back plans, ULIPs, etc. The payouts that you or your nominee will be eligible to receive will vary as per the terms and conditions of different insurance plans.
      • Term Insurance: A term insurance plan provides a pure risk cover to the policyholder. Thus, a benefit is paid only if the policyholder passes away during the policy tenure. Before implementation of the GST, a 15% service tax was levied on term insurance premiums. At present, the tax payable for term insurance policies is 18%. Thus, any individual who purchases a new policy now or a policyholder who renews his/her existing policy will have to pay a Goods and Services Tax of 18%, over and above the premium amount. Thus, if your premium payable is Rs.1,000, you will have to pay an additional sum of Rs.180 as the GST.
      • Endowment Plans: Endowment plans, in addition to providing a life cover to the policy buyer, also act as a long-term savings tool. Thus, these plans provide a death benefit in the event of the policyholder’s death or a maturity benefit at the completion of the policy tenure. Previously, endowment plans were charged a 3.75% service tax. Post implementation of the GST, a 4.5% tax is levied on the premium amount if the policy buyer is purchasing the policy for the first time. From the second policy year onwards, policyholders will be required to pay a 2.25% tax.
      • General Insurance: General insurance, or non-life insurance, is any insurance plan that doesn’t come under the purview of life insurance. Thus, general insurance providers can offer health insurance plans, travel insurance plans, home insurance plans, etc. These plans provide a payout in the event of the policyholder incurring a financial loss.
      • Health Insurance: Health insurance plans provide a cover against hospitalisation and medical expenses that the policyholder might have to incur in the event of a medical emergency. While previously a service tax of 15% was levied on premiums paid for health insurance plans, a tax of 18% is levied post implementation of the GST.
      • Travel Insurance: Most travel insurance plans cover cancellation of trips, evacuation, delay or loss of baggage, medical expenses incurred by the policyholder during the trip, etc. For travel insurance, policy buyers have to pay an additional 3% tax under the GST. Thus, the total tax now levied on travel insurance premiums will come up to 18%.
      • Automobile Insurance: Purchasing a motor insurance plan is a must if you are a vehicle owner, as per the Motor Vehicles Act. These plans provide a coverage against various expenses that you may incur in the event of a road accident, theft or loss of the vehicle, etc. Motor insurance policy buyers will now have to pay a tax of 18% on their premiums, as per the GST regime.
      • Insurance Before GST After GST
        Life Insurance Plans 15% 18%
        Health Insurance Plans 15% 18%
        Riders and Add-Ons 15% 18%
        Motor Insurance 15% 18%

         

        What should you do as a policy buyer?

        Regardless of the type of insurance policy you are planning to purchase, be it a life insurance plan, a health insurance plan, or a motor insurance policy, the premium payable should not be the only thing that you consider. The main purpose of a life insurance plan is to provide your beneficiaries financial security. Similarly, the purpose of general insurance policies is to provide you a cover against expenses that you may incur in case of an untimely eventuality.

        That being said, make sure to research various policies that are offered by insurance providers, request for premium quotes, compare the features and benefits of each policy, and purchase a plan that will provide your adequate coverage for a competitive rate.

    • KNOW MORE ABOUT TERM LIFE INSURANCE

      • Term insurance that provides critical illness riders
      •  

        Term insurance is the purest form of insurance you can avail. In case something happens to you, the insurance company will pay the nominee the lump-sum amount called the death benefit and the plan will cease to exist. However, you can also add rider plans which provide an extra layer of protection and covers your family in case you are hit by a critical illness. In various cases, if you suffer from a critical illness, the insurance company will pay the rider benefit and the plan will cease to exist. There are various health conditions which a rider plan will cover. Some of them are:

        • Benign brain tumour
        • Angioplasty
        • Chronic lung disease
        • Cancer
        • Loss of limbs
        • Liver disease
        • First heart attack
        • Strokes
        • Major burns

         

        There are various reasons why you should purchase a critical illness rider plan for yourself. One of the biggest reasons is that it acts as an income replacement. In case you are hit by an illness and have to take an absence of leave from your job, the rider plan ensures that your family does not suffer financially.

        A critical illness rider plan also covers your hospital expenses which otherwise would have taken a toll on your family financially. Also, in most cases, you may not be required to undergo any medical examination in order to purchase a critical illness rider plan.

        You may have to pay an extra premium on purchasing a critical illness rider plan. The premium thereafter will remain constant and will not be increased by the insurer unless mentioned by them.

        You will also receive tax benefits for the premiums paid towards your critical illness rider plan under Income Tax Act,1961.

        Some of the term insurance plans that offer critical illness rider plan are:

        • Aviva i-Term Smart Plan:Covers up to 16 illness and disability which includes a payout on the first diagnosis of the condition.
        • Aegon Life iTerm Plan:The critical illness rider plan under this scheme covers stroke, first heart attack, open chest CAG, and cancer.
        • Bharti AXA Life Flexi Term Plan:You can choose a comprehensive cover under this plan which provides coverage against 34 types of health conditions. The other is Major Illness Cover which provides cover against 15 types of critical illness and the Heart and Cancer Cover which covers 9 cancer and heart-related conditions.
        • SBI Life- Poorna Suraksha Plan:The policyholder can avail this benefit only once. The rider plan covers 36 major surgeries and illnesses.
        • ICICI Pru iProtect Smart Plan: You can receive benefits on the first diagnosis of the disease. This plan covers 34 types of different critical illnesses and conditions.

         

      • Why should you purchase an online term insurance plan?
      •  

        Term insurance is considered to be the purest form of insurance as it provides cover to you. In case something happens to you, the nominee receives a lump-sum amount called the death benefit and the policy ceases to exist. The premiums payable for a term insurance plan is also considered to be cheap and affordable and hence it is always advisable that you purchase a term insurance plan for yourself as soon as possible.

        However, in order to purchase a policy, you may have to visit an agent. An agent may not be so keen about selling you a term insurance policy since they are extremely cheap and it means that their commission will be less. A part of your premiums is paid to the agent as a commission which means that your premiums are not utilised completely. However, with the advent of technology, it has become to purchase a term insurance plan instantly and in a hassle-free manner.

        There are various benefits to purchasing a term insurance online. They are:

        • Easy to compare: It is important to compare various term insurance plans before zeroing on the one which is most suitable for you. Purchasing online means that before you actually buy one, you have the platform where you can compare and research various insurance plans.
        • Economical in nature: Purchasing a term insurance plan online is extremely cheap and affordable. The reason is that you are paying your premiums directly to the insurance company and there are no hidden charges or no part of your premiums is being paid to any agent or middlemen. Also, when you buy a term insurance plan from the insurer’s official website, the chances are high that the insurance company may offer you discounts as well.
        • Convenient in nature: It is hassle free and time saving when it comes to purchasing a term insurance policy online. All you have to do is visit the official website of the insurance company, provide information and documents as asked and select the plan. You can then instantly pay and your policy will be in force. The whole process is simple, time saving, and can be carried out from the comfort of your home.
        • Customer support: In case of any queries or doubts, you can always contact a customer care executive by visiting the official website of the insurance company. The website contains all the details of the toll-free numbers, email IDs, and other facilities through which you can contact the customer care executive.

         

        Before you purchase a term insurance plan online, you must keep certain things in mind.

        • You must be aware of your needs, financial requirements, annual income, your premium paying ability, and your future goals before purchasing a term insurance plan online. Based on these factors you should choose a term insurance plan as well as your cover amount.
        • While purchasing a term insurance policy, ensure that you are covered at least for the time you are going to work. This means that in case something happens to you, your family will be financially secured and you will have your peace of mind. Thus, accordingly select the policy term for yourself.
        • Never, ever withhold or conceal any information from the insurance company. For example, if you smoke, it is important that you let the insurance company know about it. If the insurer finds out at a later date that you had concealed or withhold important information from them, they are well within their rights to revoke the policy.
        • Before you purchase a term insurance policy for yourself, always check whether the insurance company is reliable or not. One of the ways to find this out is by checking the claim settlement ratio of the insurance company, their history, solvency ratio, and persistency ratio. This will allow you to decide whether it is suitable for you to purchase a term insurance policy from them or not.

         

        You must always purchase a term insurance policy from the official website of the insurance company or from a reliable third-party company. You must research and compare various plans properly. Also make sure that before you sign on the dotted lines, read the documents carefully so that you are familiar with the terms and conditions of the scheme.

      • Term insurance plans: Advantages and Disadvantages
      •  

        A life insurance plan is essentially an agreement between the insurance company and the policyholder. The insurance company offers to provide a certain amount to the policyholder’s dependents on his/her demise. The policyholder, in return, is required to pay a nominal amount known as the premium on a regular basis. Different types of life insurance plans are available in the market and term insurance plans are one of them.

        A term insurance plan is the purest form of life insurance which offers coverage for a specific period of time at an affordable price. The policyholder is given the flexibility to choose the term and the sum assured amount he/she wishes to be covered for. He/she can also attach riders such as the accidental death benefit rider, critical illness rider, return of premium rider, etc.

        Advantages of term plans

        There are a number of reasons why individuals should choose to buy a term insurance plan, here are a few reasons:

        • Low cost: Term insurance policies are the most inexpensive life insurance plan types in the market. The plan only offers a death benefit and no maturity benefit which means that no payout will be provided in case the life assured outlives the term of the policy. The premium payable towards the policy is determined by various factors, one of them being the sum assured chosen. Usually, the lower the sum assured chosen, the lower the premium amount payable.
        • Simple: Apart from term insurance plans, the life insurance market also offers plans like endowment plans, unit-linked insurance plans (ULIPs), whole life plans, etc. Since such plans come with other advanced investment and payout benefits, the plans may not be easy to comprehend by a layman. Term plans, on the other hand, are simple and easy to understand.
        • Staggered benefit payout option: A few term plans have the staggered payout option wherein the beneficiaries will receive the death benefit in multiple instalments for a specific period of time. This ensures the nominee receives benefits for a prolonged period and need not worry about exhausting the benefits received. The policyholder can opt for the option, if necessary, at the time of inception of the policy.
        • Backs an investment tool: The objective of a life insurance policy is to make sure that the assured person’s family members do not face any financial contingencies on the unfortunate death of an earning member of the policy. Endowment plans and ULIPs offer the benefit of investment as well but it may or may not be sufficient during an emergency situation. It is hence best to purchase a term plan that can act as a supplement to the investment tool held by the person. Term plans can be used in addition to other investment tools like mutual funds which may require a considerable amount of financial contribution from the person.

         

        Disadvantages of term plans

        While there are many advantages, term plans have a few drawbacks as well.

        • No maturity benefit: If a person purchases a term insurance policy for a period of 20 years and he/she survives the entire term, no benefit will be payable and the policy will be terminated. The premiums paid towards the policy will not be refunded unless the policyholder opts for the return of premium rider that is offered by a few insurance companies.
        • Cannot be purchased by older individuals: The age at entry range is generally limited for term insurance plans. Hence older individuals i.e. persons beyond 65 years or 70 years may find it difficult to purchase a term plan.
        • No wealth creation: Unlike endowment plans and ULIPs, term plans do not offer any investment option and hence provide no medium to create wealth.

         

        Therefore, a term insurance plan is the best life insurance plan type for individuals who want an inexpensive plan that provides optimum coverage.

      • How Much Life Insurance Coverage You Need
      •  

        Once an individual starts earning, it is a good idea for him/her to focus on financial planning. While saving and making investments are important parts of financial planning, being prepared to face the uncertainties of life is another. The purpose of a life insurance policy is to financially support the family members of the deceased person.

        The overall insurance penetration in the country is quite low but in the recent past, many people have started understanding the importance of life insurance and have started purchasing life insurance policies. One of the most common questions when buying a life insurance policy is how much insurance coverage one should opt for. Getting too much or too less coverage is certainly not a good idea.

        Consequences of being uninsured, over-insured or under-insured

        Not being covered by a life insurance plan could mean leaving one’s family members in a risky financial situation. The family members will be forced to cut down on expenditures and modify their lifestyle if the sole earning member of the family passes away and he/she was not covered by a life insurance plan at the time of death. While this is the downside of not being insured, being over-insured or under-insured can have negative effects too. If a person chooses a sum assured that exceeds the requirement, he/she will have to unreasonably shell out more from his/her regular income to pay for unnecessarily high life insurance coverage. Further, choosing too low a sum assured amount is also not a good idea. A low sum assured may be adequate only during the initial stage after the demise of the individual but leave the dependent members financially helpless shortly after.

        How to choose the right sum assured amount

        As established earlier, it is best to opt for the right sum assured amount that will help the policyholder’s family sustain their lives after the life assured’s death. Here are a few factors a prospective policyholder should bear in mind before choosing the sum assured:

        • Day-to-day expenses: One can assess the expenditures of the family by keeping a track of the everyday expenses that the family incurs. That will help determine approximately how much money will be required by the family when the breadwinner of the family is not around to provide for them.
        • Possible inflation in the future: Costs of items of everyday use, medicines, food items, etc. has been skyrocketing in the recent past. There is a possibility that the trend may continue in the near future too. It is hence important to take future inflation into consideration while opting for the sum assured. One can assume the average rate of inflation to be 5% per year. Anything lower will leave only a slightly higher amount with the family members which they can certainly put to good use.
        • Total debt or liability amount: It is essential to calculate the total loan and debt amounts while purchasing a life insurance policy so that the family members are not burdened with the repayment of loans and debts.
        • Future responsibilities: It is important to keep in mind the responsibilities that may come up in the future such as the child’s education, child’s marriage, moving to a new home, etc. Certain life insurance policies provide payouts at aforementioned milestones. So one can evaluate such possibilities and decide the sum assured amount.
        • Premium payment capacity: While getting the right sum assured is imperative, there is no need to pressurise oneself to contribute more than his/her capacity. Other responsibilities such as routine expenditures and EMI payments are just as important, so it is wise to pick a sum assured amount where the premium amount payable is affordable.

         

        Life insurance policyholders are required to pay a certain amount on a regular basis towards the policy so that they can enjoy the benefits provided by the insurance company. Since life insurance costs comparatively low for younger individuals, it is ideal to buy policies at a young age. The additional benefit of a life insurance policy is that one qualifies for tax benefits under section 80C of the Income Tax Act, 1961, on paying premiums towards the policy.

      • Term Insurance without Medical Check Up
      •  

        Term insurance plans are a popular option for many policy buyers due to their high coverage and low premium rates. In order to purchase a term insurance plan, you, the policy buyer, will need to submit an application form with whatever documents are required by the insurance provider. In certain cases, the insurance provider may also require you to undergo a pre-policy medical screening before purchasing the policy.

        The pre-policy medical screening is to help the insurer ascertain that you don’t suffer from any adverse medical conditions. That being said, it is important to know that not all policy buyers are required to undergo medical tests before purchasing an insurance policy. In most cases, individuals who lead a healthy lifestyle and are under a certain age will be given the policy without a medical check-up.

        If you want to purchase a term insurance plan without undergoing a medical screening, it is vital that you do your due research and read the terms and conditions of various policies. You can also choose to contact a company representative or an agent if you have any queries about the same.

        While not all insurance companies will need you to go through a medical screening, you will still be required to provide a declaration of your health at the time of purchasing your insurance policy. It is important that you don’t conceal any information about your health since the insurer can cancel your policy if any discrepancies are found in the information that you provided.

      • Term Insurance for Diabetics
      •  

        Purchasing a life insurance policy is a must if you want to ensure that your loved ones are financially protected in case of an unfortunate eventuality. However, many individuals with adverse medical conditions like diabetes don’t purchase life insurance policies fearing that their applications will get rejected by insurance providers.

        However, if you are diagnosed with a lifestyle disease like diabetes, it is important to know that most life insurance providers will offer your policies as long as you have made the required changes to your lifestyle and have brought your health condition under control.

        You should, however, be prepared for certain questions that the insurance provider might ask you about your health. Thus, if you are a diabetic, the insurance provider might want to know when you were diagnosed with the condition, what type of diabetes you are diagnosed with, what your A1C level is, what treatments you underwent or are undergoing, how often you visit your specialist, whether you suffer from any other related health conditions or ailments, etc.

        Also, insurance companies might require you to undergo a pre-policy medical check-up before purchasing the policy. The medical test will help the insurer accurately assess the risks associated with your condition. If you are a diabetic and are looking to purchase a life insurance policy, it is important to research various plans that are available in the market and compare the features and prices of each policy. Doing so will ensure that you receive adequate coverage without having to pay a hefty premium.

      • A Term Insurance Plan with an Affordable Premium - The Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY)
      •  

        For those who wish to financially secure the lives of their family, loved ones, or dependents, by paying a nominal amount, they can choose the Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY). A yearly renewable plan, for just a premium of Rs.330, a policyholder can insure their loved ones of Rs.2 lakh. Backed by the Government of India, the policy is offered by Life Insurance Corporation (LIC) and various other private insurers and if offered by a number of popular banks across the country as well.

      • Term Life Insurance For Heart Patients
      •  

        If you feel that your life hangs by a thread and you have not much time left, apart from caring for yourself and attempting to improve your condition, you should think about your family and loved ones as well. A term insurance particularly for heart patience is the solution. By availing a term insurance plan, your family, loved ones, or dependents will be be financially secure once you’re gone. Being a financial turmoil is an added stress, you can choose to jump that hurdle for your family and loved ones.

      • Term Insurance Plans For Senior Citizens
      •  

        If you though that a term insurance plan can be purchased by the young and healthy, you’re wrong. In fact, term insurance plans are offered by the biggest life insurance companies for senior citizens as well. Coverage for a term insurance plan can extend till the age of 85 years. Senior citizens availing a term insurance plan can secure their loved ones and dependents financially and can also cover any pending loans - ensuring the burden does not fall on the surviving members of the family. In your mid 50s or 60s? Take a look at these term insurance plans that you can avail.

    Term Insurance Claim Acceptance/Rejection Scenarios

    1. Is it a good idea to take a premium waiver rider policy along with my insurance cover? I am about 45 years old and my policy will be active for the next 15 years.
    2. Premium waiver rider is a useful rider cover on many occasions. It is useful in policies where you wish to have the maturity amount after a specific period. For instance, in child plans, the policy continues to accumulate benefits even if the parent dies. The benefits here will be paid after the child reaches a specific maturity age. This rider is highly beneficial if the policyholder suffers a disability during the policy term. Some plans also offer this benefit if the policyholder is diagnosed with a critical illness. You may choose to opt for this rider depending upon your specific requirements.

    3. I will turn 55 years next month. My friends are advising me to buy a term plan for Rs 50 lakh. What should I do and how much will be the premium?
    4. Term insurance is one of the most cost-effective products that you can purchase for yourself. If you are looking for a product which would ensure that the future of your loved ones remains safe and secure even in your absence, then term insurance is an ideal product that you must purchase for yourself. Term insurance is cheap and affordable in nature and you can choose a higher cover amount as well for yourself. Since you are 55 years of age, you must ideally purchase a plan which covers you till you turn 60 years. However, depending on your needs and future financial dreams, you can also purchase a plan which would cover you till the age of 80 years. You must thus evaluate your future financial needs before you decide to purchase a term insurance plan for yourself. The premium amount, policy term and the benefits will deserve from insurer to insurer. Hence, ensure that you have done a fair amount of research and after you have compared various plans, should you purchase a proper term insurance plan for yourself.

    5. I am not sure whether to buy a child plan for my son who is five-year-old or invest in mutual funds for his higher education corpus. Please advise.
    6. Child insurance plans and mutual funds are two very different investment tools. While child insurance plans are a type of insurance plan where not only you get the assurance that in case something happens to you, your child’s future will not suffer. In case something happens to you, the nominee will receive a lump-sum benefit called the death benefit and all the premiums post that will be waived off. Your child will also receive a corpus at the end of the policy term which means that a child insurance plan offers the dual benefit of both insurance and savings and will be helpful keeping in mind the future of your loved ones. Mutual Funds is simply an investment tool which will ensure that you receive returns based on your risk appetite. If you already have a life insurance policy, it is suggested that investing in a mutual fund will suffice. If you don’t have any existing life insurance policy, then keeping in mind the future of your kid, you must purchase an appropriate child insurance policy for your kid.

    7. Should I buy two life insurance term plans in case one is rejected?
    8. The only reason your life insurance policy can get rejected is due to any exclusion in it which you may not have adhered to. Hence, if one of your policies gets rejected then the chances are extremely high that you are another insurance policy may get rejected too. Hence, whenever you are purchasing a life insurance plan, ensure that you declare correct information about yourself and do not withhold any information from the insurance company. Do undergo a medical examination so that the nominee appointed by you do not face any problems regarding the settling of claims in future.

    9. I purchased a term insurance policy for Rs.25 lakh nearly 10 years ago with a policy term of 25 years. I recently purchased another term plan with the same company for Rs.1 crore with a policy term of 20 years. Before purchasing the first term plan, I had a surgery for a condition in the hip. I forgot to mention this while taking the first plan. I did mention this while getting the second term plan. My doubt here is that whether my first policy will be repudiated due to non-declaration of a medical condition. Please advice.
    10. Your first term cover was purchased 10 years ago. As per the current laws, the insurer cannot repudiate your claims after the third year. Hence, your policy stays valid. Also, you have mentioned your condition to the insurer while taking the second policy. Since this one is accepted without any issues, there is no reason for you to panic about the first term plan.

      If you are still worried, you may contact the insurer directly and clarify these details. The insurer will most likely update the details and provide the policy cover. If there are any further issues, you may cancel this policy and take a new one for the specified amount.

    11. I am a 23-year old working professional who has just started my career. At the moment, I save Rs.10,000 per month. I would like to invest this money in some plans. What are my options here? Also, is it too early to get into a life insurance plan? I have a health and life insurance plan offered by my company. Is that sufficient for my age? Please advice.
    12. Since you don’t have any insurance plans, you need to consider buying a term insurance cover. Term insurance is a must for everyone irrespective of their age and income. Also, at this age, term insurance will be extremely cheap for you. Even if you don’t have any dependents right now, you will have in the future. When you enter that point in your life, the cost of a term insurance plan might be significantly high. Hence, it is better to buy high-value coverage at a cheap price now. For someone your age, a term cover with sum assured amount Rs.1 crore could be as low as Rs.5,000 per year. So, do not hesitate on investing in it right away. Also, the life cover provided by your employer will not be adequate and it stops when you resign from the company.

      Coming to investments, mutual funds are the best bet for you right now. It could be too early for you to invest in retirement plans or pension plans. Money-back plans are also ideal for your requirements right now. These plans provide periodic returns and they could help you save tax. You must consider investing in mutual fund SIPs regularly every month. Maintain a diversified portfolio of different types of funds. Also, you may invest in endowment plans or ULIPs depending upon your risk profile. Apart from this, you may also consider investing in other options like real estate, equities, government bonds, corporate bonds, etc. It is always a good idea to spread out the investments and minimise the risk.

    13. I am a 45-year old and I have a term insurance cover for Rs.2 crore. I am a businessman running a successful business. I have a wife and two daughters. I have savings in the forms of various assets. However, I also have outstanding loans to the tune of Rs.25 lakh. Will my family get the full settlement from the company if something happens to me? Or Will they settle the loans first?
    14. As per the Married Women’s Property Act (MWPA), it is not possible for lenders to get ahold of your insurance money. The proceeds will go directly to your main beneficiary (wife). This is a useful law to protect women against the liabilities of their spouses. However, the wife may choose the repay the outstanding loans if they wish to do so. There are no laws that could give away your insurance money to your lenders.

    15. I bought an endowment policy about 10 years backs for a policy term of 20 years. The sum assured amount is only Rs.3 lakh, and I pay an annual premium of Rs.17,000. Considering that my yearly income is around Rs.5.5 lakh now, should I surrender this policy and invest in something else? I also have a term insurance cover for Rs.1 crore.
    16. Before you proceed with the surrender, check the returns offered by this cover. Since this is an endowment policy, you are bound to get guaranteed returns on the invested amount. If the returns are not up to your expectations, you may go ahead with the surrender and invest the money in something else. In this situation, you need to calculate the potential returns and risks associated with the other investment you are thinking about. Also, you need to evaluate your financial situation in being able to proceed with both investments. You may also have to consider the surrender charges imposed on a policy. If the surrender charges are too high, it does not make much sense in surrendering it.

    17. I am a 38-year old investment banker. I have a term insurance cover for Rs.80 lakh. I bought this plan about 10 years ago. At that time, the sum assured amount was 10 times my annual income. Also, I have coverage only for the next 15 years. Now, my income has increased multiple times. Is there any way I can increase the sum assured amount in my term plan? Also, is it possible to increase the policy term by another 5 years? If these changes are not possible, what are my other options?
    18. Since your income has increased multiple times in recent years, it is quite normal that you expect higher sum assured for your term life insurance policy. Unfortunately, most term insurance plans in the market do not allow for an increase in the sum assured amount or policy term midway through the policy. There are some policies in the market that allow policyholders to make changes to their policies at specific milestones like marriage, new home construction, childbirth, etc. Check with your insurance company to know whether your policy allows such changes. If this is allowed, you may have to meet the medical requirements of the insurer.

      One other option you may consider is buying a second term insurance cover. Obviously, the cost of buying a new term insurance cover will be much higher than your existing cover. However, you may consider this option because it is the best choice available for you right now. It is legal to hold multiple term insurance policies from the same or different insurer. Since your earnings are high, your human life value (HLV) will also be high. You may check with the insurer to know the maximum possible coverage value available for you and decide accordingly. This time make sure that you choose the sum assured amount and policy term based on your future income and family requirements.

    19. I bought a term insurance plan about five years ago. I went with the general rule of setting the sum assured value at 10 times of my annual income five years ago. Now my income has increased significantly and so are my liabilities. I would like to increase the sum assured value of my life cover. Is there any way in which I can do it? I am 29 years old now and I have a cover for Rs.50 lakh. Right now, I earn around Rs.10 lakh per year. Please advice.
    20. As per the guidelines set forth by the IRDAI, insurance companies are not allowed to make any changes to the sum assured value in a policy. You can either take a second policy for the additional sum assured amount or buy a new policy altogether. As per the rules, it is perfectly legal to buy more than one life insurance cover. For instance, if you wish to have a sum assured amount of Rs.1 crore, you may take another policy for Rs.50 lakh. You have to pay the premium for this policy according to your revised age.

      Your second option is to buy a new life insurance policy for the entire amount. Here, you may have to cancel your existing life cover. When you do it this way, make sure that you get the new policy first before cancelling your existing policy. Since the cost of term covers tend to increase with age, you may take a decision by calculating the premium amount you have to pay in both cases. If the first option is cheaper, you may definitely go with that. However, you also need to think about the hassle of maintaining two separate policies with two different renewal dates.

      When you buy this additional life cover, you need to make sure that it will be sufficient for your future liabilities also. Otherwise, you might end up in a similar situation in the next few years. Apart from your yearly income, you may also consider your family’s current expenses and future liabilities before deciding on the sum assured amount.

    21. I am a 25-year old software engineer. I am looking to buy a term plan. Is it possible to buy two term covers from two different companies in case one of them get rejected?
    22. The number of term covers you buy is entirely up to you. However, there will not be any benefit in buying two term covers due to fear of rejection. The criteria for claim reject remain the same across all companies in the market. For instance, there is a one-year exclusion for suicide with regard to term insurance policies. This exclusion will remain the same for almost all insurance companies in the market.

      Claims are typically rejected for various reasons like fraud, death due to pre-existing health condition, death due to exposure to hazardous situations, etc. If any of this applies to the policyholder, all life insurance companies are likely to reject the claim. Hence, it is not a good idea to buy multiple term insurance covers on the possibility of rejection. With that being said, there is no specific rule against buying more than one term insurance policy.

      When buying a term insurance policy, you may have to consider the benefits offered by the policy. Another thing you have to consider is the possibility of losing out on discounts of high-value sum assured amount. If you split the sum assured amount into two different policies, most often you might end up paying more for the same value of coverage. If you are looking for term covers, choose the sum assured amount you need and buy it within the same company. This will be both beneficial as well as hassle-free for all your requirements.

    23. My wife and I are in our late thirties. Both of us are working professionals. We own the home in which we live and have rented out another home. Mortgage payments are over for both loans. We don’t have any other outstanding liabilities. We have taken endowment policies for life insurance coverage. We have one daughter who is 7 years old. We have enough savings for her higher studies and marriage. Is it a good idea to buy a term insurance policy now? What policy term can we choose if we decide to buy term insurance?
    24. Buying term insurance is certainly advisable even though your family is in a good financial position. Term insurance is mainly to avoid the uncertainty associated with the loss of the family’s primary earner. It is better if you opt for individual term plans for you and your wife. Also, term plans are highly beneficial if taken for your productive years. Hence, you can choose a policy term of 15 years or 20 years. Through this way, you can protect your family from financial uncertainty till the time of your retirement.

      Since you already have endowment policies, you need to check with the insurance company to determine what value of life insurance coverage is available for you as per the human life value (HLV) calculation. Term covers are essential to make sure that your family members don’t have to compromise on their lifestyle following an unexpected death.

    25. I started my career last year. I am earning Rs.6 lakh per year right now. I would like to buy life insurance to save tax. Which policy is best suited for my needs - term insurance or endowment policies? Is there a provision to invest higher when I start earning more?
    26. Tax saving is one of the benefits of investing in life insurance. However, this should not be the primary reason why you must buy life covers. Evaluate your needs and then decide to buy a life cover based on your needs. Term insurance is a must for every earning professional. Since you are young right now, the cost of term insurance covers will be extremely cheap. Make sure that you buy a term cover. When you buy a term policy, consider your dependents (if any) and other liabilities and choose the sum assured amount accordingly.

      Endowment policies are good if you prefer savings-oriented plans. You can invest a portion of your monthly income and get into a savings habit. You may also choose a shorter term for your endowment policies and buy a new cover at the end of this policy term with a higher sum assured amount. Through this way, you can invest more as you start earning more. There are plenty of policies available in the market right now. Browse through the plans and pick the ones that are suitable for your specific needs.

    27. My son is 12 years old right now. I have bought a money-back plan for him around five years ago. Is it a good time to invest in a child insurance plan? I need money for his higher education when he is around 16 years. Is there any other investment option I can consider other than life insurance plans?
    28. Since your son is going to need money in another 4 years, child insurance plans may not be adequate for your needs. The time period here is too short. Child insurance plans require at least 8 to 10 years to accumulate a big corpus. For your specific needs here, you may invest in mutual funds. Mutual funds have a lot of flexible options based on your requirements. You may choose the risk-level based on your needs. You may also consider endowment plans with single premium options. No matter what you invest in, it is better to back all your investments with a term insurance plan. Make sure that that you have a term insurance cover at least during all your productive years.

    Term Insurance Frequently Asked Questions (FAQs):

    1. Will my term insurance plan pay a surrender benefit if I cancel my plan during the policy tenure?

      Since term insurance plans do not acquire a cash value, you will not be paid a surrender benefit if you surrender the policy. If you cancel your policy during the free-look period, you will receive a full refund of your premium paid, excluding a nominal deduction. However, no term insurance plan will pay a surrender benefit to policyholders.

    2. How do I go about choosing an insurance provider?

      Before you select an insurance provider, make sure to consider the following things:

      • Insurance plans offered by the insurer and the benefits and features of various plans
      • Claim settlement and grievances resolved ratio of the insurer
      • History of the insurance company
      • Customer service channels
      • Online premium payment channels
      • Claim settlement process
    3. Given the fact that term insurance plans cover accidental death, why should I purchase an additional Accidental Death Benefit Rider?

      Term insurance plans do cover accidental deaths. In case the policyholder meets with an untimely death due to an accident, the insurance provider will pay the base sum assured to the nominee. However, in case you purchase an Accident Death Benefit Rider along with your term insurance plan, your nominee will be paid an additional rider benefit or rider sum assured. Thus, you can increase the benefit payable to your nominee by purchasing an additional rider.

    4. Can I purchase a term insurance policy for my spouse?

      Yes, you can purchase a term insurance plan for your spouse and pay the due premiums, as well. In this case, you will be the policyholder and your spouse will be the life assured.

    5. What are certain exclusions under term insurance plans?

      Most term insurance plans do not cover suicide, death as a result of self-inflicted injuries, alcohol abuse, drug abuse, participation in illegal activities, HIV/AIDS, etc. The exclusion criteria are likely to vary from plan to plan, and hence it is recommended that you read through your policy brochure and the policy terms and conditions in detail before purchasing any insurance plan.

    6. Will I have to pay a penalty or fee if I pay my premium during the grace period?

      No, premiums paid during the grace period will not attract a penalty. However, if you pay the due premium amount after completion of the grace period, you will have to pay a revival fee to your insurance provider.

    7. In case no death claim has been made during the policy tenure, will the insurer refund premiums paid during the policy tenure?

      Most term insurance plans do not return premiums paid during the policy tenure, at the completion of the policy term. However, certain insurance provider offers term insurance plans with a ‘return of premium on maturity’ option. In this case, if you survive till the date of maturity, all premiums paid by you will be returned by the insurance provider.

    8. Can I cancel my term insurance plan?

      Yes, you can cancel your term insurance plan at any time. If you cancel your policy during the free-look period, you will be provided a refund of your premium amount paid. You will have to notify the insurer within the free-look period of 15 or 30 days.

    9. What is the general age limit for term insurance plans?

      Most life insurance providers who sell term insurance plans will require you to be between 18 years and 65 years to be eligible to purchase the policy. That being said, make sure to read through your policy brochure or talk to an insurance advisor for policy-specific information.

    10. What documents should I submit in order to purchase a term insurance plan?

      While the documentation process will usually vary from insurer to insurer, a few basic documents that you will have to submit at the time of purchasing a term insurance plan are:

      • Photo ID Proof: You can submit your passport, Aadhaar card, or Voter’s ID for this purpose.
      • Address Proof: For address proof, you can submit utility bills, Aadhaar card, or your passport.
      • Income Proof: If the insurer requires you to submit income proof, you can submit your recent payslips and bank account statements.
      • PAN card
    11. How much cover should I opt for with a term plan?

      The ideal cover you should take is determined by the formula below:

      Minimum sum assured = Annual income x 10 (+ loans and liabilities, if any)

    12. If I am an occasional smoker, do I still fall under the “Smoker” category?

      Yes. You can declare yourself as a non-smoker only if you have not smoked in the last 12 months. Not declaring that you smoke can lead to your claim being rejected later for non-disclosure of important information.

    13. Why is the premium higher for smokers?

      Smoking is the cause of a number of health issues and cancers. The risk borne by insurers for smokers is much higher. Therefore, the premiums are higher for smokers.

    14. How long does it take to get a claim settlement from a term plan?

      Once you submit the request along with all the documentation, the insurer will usually take about 8-15 days. A claim settlement should not exceed 180 days for whatever reason.

    15. Is buying a term plan online cheaper?

      Yes, buying a term plan online is cheaper. If you buy a plan through an agent or a branch, the insurer incurs a higher cost to deliver the plan to you. Online, the plan is sold directly to the customer making it cheaper for the insurer. Therefore, premiums are lower on online term plans.

    16. What is a claims settlement ratio?

      The Insurance Regulatory Development Authority of India (IRDAI) publishes a report annually which details the claims status of every insurance company in the country. The public can view how many claims were made to a company and how many they settled.

    17. When purchasing a term insurance plan, what is the ideal policy term that I should opt for?

      Insurance providers offer term insurance plans with varying policy tenures, starting from a period of 5 years. Any policy that you purchase should be sufficient to meet your coverage needs. That being said, it is always advisable to opt for a long-term insurance policy since the premium rates will only keep increasing each time you renew your policy due to your advancing age.

    18. Are the same riders offered for all insurance policies?

      No, insurance providers do not offer the same riders under different policies, thus making it all the more important that you consider this factor when purchasing a policy.

    19. Can I purchase more than one term insurance plan? And in case of a death, will my nominee receive benefits payable by both plans?

      Yes, you can purchase more than one term insurance plan. Provided you have disclosed all facts to the insurer and have made your due premium payments, your nominee should be able to claim the payout from both policies.

    20. Do term insurance plans come with a free-look period?

      Yes, term insurance plans come with a free-look period. For most term life plans, the free-look period is usually either 15 days or 30 days. You can review the terms and conditions of your policy during the free-look period and return it if it doesn’t meet your expectations.

    21. Under what circumstances can a death claim be rejected?

      Most life insurance plans come with a suicide clause. Thus, if the policyholder, whether sane or insane, commits suicide within a year of purchasing the policy, the insurer will not be held liable to pay a death benefit. In this case, a percentage of the overall premiums paid will be returned to the nominee. Further reasons for claim repudiation are non-disclosure of key information at the time of purchasing the policy, misrepresentation, fraud, etc.

    22. Can term insurance plans be purchased by non-resident Indians (NRIs)?

      This will vary based on the insurer’s terms and conditions. Certain insurance providers will offer term insurance plans to NRIs, while other insurers might require you to be a resident of India in order to purchase the policy. Make sure to read through the eligibility criteria of the policy or reach out to an insurance advisor before purchasing a policy if you are an NRI.

    23. Do term insurance plans also provide a maturity benefit?

      Pure term insurance plans do not provide a maturity benefit at the completion of the policy tenure. However, there are a few term insurance plans that have a ‘Return of Premium’ feature, wherein you receive the sum of all premiums paid during the policy tenure at maturity of the policy.

    24. Will my premium amount change at the time of renewing my policy?

      For most term insurance policies, your premium amount will remain constant for the duration of the policy tenure. However, in most cases, you will have to renew the policy for a slightly higher premium rate. This premium will be decided primarily on the basis of your age at the time of renewing the policy and the sum assured.

    25. Will I get any benefit if I surrender my policy during the policy tenure?

      No, since term insurance plans do not have a cash value attached to them, you will receive no surrender benefit if you surrender this type of a policy. Since it is always good to have an active life insurance plan, ensure that you continue to pay the due premiums during the policy tenure.

    26. How long do insurance firms take to settle one’s claims?

      The exact claims settlement procedure varies from insurer to insurer. However, most insurers settle claims within a period of 7 – 30 days based on the timely submission of supporting documents and the prevailing conditions of the said claim.

    27. Can I change my nominee during the policy tenure?

      Yes, you can change your nominee any time during the policy tenure. You will, however, have to submit a request to the insurer for the same.

    28. Is it necessary to purchase riders?

      Riders are offered by insurance providers in an effort to help policy buyers customise their policy. However, you only have to purchase a rider if you are in need of it. Purchasing a rider can help you or your nominee receive an additional benefit, and thus increase the level of protection offered by the base plan.

    29. Is it safe to purchase a term insurance plan online?

      Yes, it is completely safe to purchase a term insurance plan online since policy payments are done via secure, authorised channels. However, when buying insurance, make sure to only purchase a policy from a reputed insurance firm or from a trusted third-party website.

    30. Do I have the option of availing a loan against a term insurance plan?

      No, since term insurance plans do not have a cash value attached to them, you cannot avail a loan against a term life insurance policy.

    31. Do term insurance plans offer tax benefits?

      Yes, policyholders and nominees are eligible to avail tax benefits under Section 80C and Section 10(10D) of the Income Tax Act, 1961, for premiums paid and the death benefit, post the policyholder’s death.

    32. What are the benefits of buying a term insurance plan online?

      Purchasing an insurance plan online, as opposed to offline channels, has several benefits. Firstly, since there are no agents involved, the process is likely to be more hassle-free as you can purchase the plan right from the comfort of your house. Also, when you purchase the insurance plan online, you can compare various plans offered by different insurance providers, and opt for a policy that is best suited to your requirements. Insurance providers selling online plans are also likely to have a simpler documentation process.

    33. Can term insurance plans be purchased by individuals post their retirement?

      Insurance providers will mention the eligibility criteria for each plan in the policy brochure. Thus, if your age at entry falls within the insurer’s age limits, you will be eligible to purchase the policy.

    34. I am planning to purchase an insurance policy for myself. What is the better choice – term insurance plans or ULIPs?

      Both types of insurance products serve different purposes. A term insurance plan offers only protection. Thus, if the policyholder passes away during the policy tenure, a payout is offered to the nominee. However, if the policyholder does survive the policy term, no benefit is paid. A ULIP or Unit Linked Insurance Plan, on the other hand, offers customers the dual benefit of a savings cum investment option. Thus, in addition to the risk cover, you are also provided the option of investing in funds that match your appetite for risk. Before opting for a certain type of policy, make sure to consider our stage of life, needs of your dependents, financial goals, and liabilities to find the right insurance policy.

    35. Are term insurance plans a good savings/wealth creation option?

      A term insurance plan is a pure protection policy. Thus, they offer a risk cover with a large sum assured for a relatively low premium. Considering this, they do not serve as a savings/wealth creation option.

    36. Are premium quotes/rates fixed by the IRDAI?

      No, life insurance premiums are decided by the insurer. Insurance companies consider various factors to measure the premium. A few factors that could affect premium rates include the policyholder’s age at entry, the gender, previous medical conditions, smoking/tobacco use, nature and type of occupation, the type of policy, etc. Since the premium rates offered various insurers will differ, it is recommended that you compare premium quotes on a third-party website and opt for a policy that will provide you optimum coverage for a competitive premium.

    37. Do insurers provide any offers/discounts that can help one secure a lower premium?

      Discounts and offers provided by insurers will vary from company to company and time to time. Thus, you will have to check on the insurance website or consult an agent to know if any discounts are being offered.

    38. Can a term insurance plan be bought for a child?

      The minimum age at entry for most term insurance plans in the market is 18 years. Thus, if your child is under the age of 18 years, you will not be able to purchase a term insurance plan for him/her.

    39. I am in my mid-40s. Would buying in a term insurance plan be a better option than investing in a pension plan?

      The decision of what insurance plan to buy will vary based on several factors, such as your liabilities, premium payment capacity, needs of your dependents, etc. The advantage of term insurance plans is that the policy buyer can opt for a high sum assured by paying a low premium. However, with increasing age, the cost of term insurance plans also rise slightly. On the other hand, a retirement/annuity/pension policy is best suited for those looking to secure their post-retirement years, by way of a steady source of income. Thus, make sure to consider these factors before purchasing any policy.

    40. Do life insurance providers offer the service of online premium payment?

      Yes, most insurance providers offer services like online premium payment, via the insurer’s official website.

    41. Why do claims get rejected by life insurance providers?

      A few reasons why claims get rejected are mentioned below:

      • Non-disclosure of information at the time of purchasing the policy
      • The policy being in a lapsed state at the time of making the claim
      • Non-coverage of the event
      • Event falling under the insurer’s exclusion criteria
    42. Can a minor be nominated when purchasing a term insurance plan?

      Yes, you can nominate a minor at the time of purchasing your insurance policy. However, since the nominee is a minor, you will also have to nominate an appointee. Thus, in case a claim is to be made, it will have to be raised by the appointee. If you do not nominate any appointee, the death benefit will be paid to your legal guardian.

    43. Why are premium rates lower for term insurance plans?

      Term insurance plans are offered at a lower rate by insurance providers since they don’t acquire a cash value. Term insurance plans are protection-oriented and thus provide a risk cover against death to the policyholder. If the life assured passes away during the policy tenure, a death benefit will be paid to the nominee. However, no benefit can be claimed at maturity of the policy.

    44. What are certain riders that I can purchase with a term insurance plan?

      The riders that you can purchase along with your term insurance plan will vary from insurer to insurer and plan to plan. Certain popular riders that are offered with term insurance plans include:

      • Accidental Death Benefit Rider
      • Accidental Death and Disability Benefit Rider
      • Critical Illness Rider
      • Waiver of Premium Rider
      • Income Benefit Rider
    45. Can I revive a policy that has been lapsed for a year?

      If a policy has lapsed due to non-payment of premiums, you will be able to revive the lapsed policy by paying all due premiums with the applicable interest charge, within a period of 2 to 5 years, in most cases. In certain cases, you might also have to submit a declaration of good health. The revival period will vary from insurer to insurer. Thus, you will have to read through your policy brochure or contact your insurer at the earliest for more information.

    46. Will I have to pay an additional sum of money if I opt to pay my premium through the insurer’s official website?

      No, as a policyholder, you are offered this feature at no additional charge. In most cases, you will simply need to navigate to the insurer’s website, click on the relevant tab, enter your policy details, select your preferred payment mode, and enter your payment details, in order to pay your premium online.

    47. I am currently looking to purchase a term insurance plan. How can I secure a lower premium rate?

      A few ways through which you can reduce your payable premium are listed below:

      • Choose a suitable sum assured and ensure that you are neither underinsured nor over-insured.
      • Purchase your term insurance policy online, since online insurance plans are significantly cheaper.
      • Purchase only whatever riders are required since you will have to pay an additional amount for each rider you purchase.
    48. Do policy buyers need to undergo a pre-policy medical screening before purchasing a term insurance plan?

      Most insurance providers will not require policy buyers to undergo medical tests for term insurance plans. However, this might vary based on your insurer’s terms and conditions. Thus, if you have reported being diagnosed with medical conditions in the past or are opting for a high sum assured, you might be required to undergo a pre-policy medical screening.

    49. How are premiums paid for term insurance plans?

      You can choose to pay your due premiums through online or offline channels. Most insurance providers will allow you to pay the due premium through their official website in a hassle-free manner. If you wish to pay it through offline means, you can directly walk into the nearest office of your insurance provider and pay it at the cash counter. Other premium payment methods will vary from insurer to insurer. Make sure to contact your insurer’s Customer Service Team for more information.

    50. Why do term insurance premiums increase with age?

      Premium rates for term insurance plans are linked to the policy buyer’s age at entry. Thus, an individual in his/her 20s will be offered a lower premium rate than somebody in their 40s or 50s. The reason why insurance premiums increase with age is that the insurance provider has to undertake a higher degree of risk with an older person than with a young policy buyer.

    51. Can I make changes to my sum assured amount after purchasing a policy?

      Most life insurance providers will give you an option of making enhancements to the sum assured at the time of renewing your policy or upon attaining certain key milestones in your life. However, this benefit/feature might vary as per the terms and conditions mentioned in your policy brochure.

    52. In case my nominee passes away before me and I have not nominated another person, who will receive the death benefit in case of an unfortunate eventuality?

      In such a case, the death benefit will be paid to one’s legal heir.

    53. How do I go about calculating term insurance premium quotes?

      As a prospective policy buyer, it is necessary to research various term insurance plans and compare the premium quotes offered by insurance companies. Most insurance providers offer online premium calculator tools on their website, through which policyholders can calculate the premium payable in a hassle-free manner by simply keying-in a few details. You can also visit a trusted third-party insurance website and compare the premiums and features of various insurance plans side-by-side.

    54. Will the premium be fixed during the policy tenure?

      For term insurance plans, the premium payable is fixed during the policy tenure, unless otherwise mentioned in the policy brochure. However, you might have to pay a higher premium at the time of renewing your policy.

    55. What is the maximum policy tenure that can be chosen?

      Most group term insurance policies are annually renewable. However, since this might vary from plan to plan, make sure to read through the policy brochure carefully for more information.

    56. Do group term insurance policies offer maturity/survival benefits to members?

      Since term insurance policies are purely protection-oriented, they do not offer maturity benefits or survival benefits.

    57. What riders can be purchased along with a group term insurance plan?

      The riders that can be purchased will vary from plan to plan and insurer to insurer. However, some of the popular riders that are offered include the Accidental Death Benefit Rider, Accidental Disability Benefit Rider, Critical Illness Rider, etc.

    58. Do group term insurance plans come with a free-look period?

      Yes, most group term insurance plans come with a free-look period of 15 days.

    59. What is the minimum age at entry for group term plans?

      The minimum age at entry will vary based on the insurer’s terms and conditions. However, for most policies, members will be required to be over the age of 16 – 18 years.

  • WANT TO EXPLORE RELATED AND DIVE DEEPER?
    • Life Insurance
    • Life insurance is nothing but a signed document where the insurer provides cover to the insured for a specific period of time. The insurance companies provide a protective cover in the event of the person’s death. The insured, in order to continue availing the policy pays a certain sum of money called premiums.

    • Unit Linked Insurance Plans
    • Also called ULIP, this kind of plan not only provides you a protective cover but also invests a part of your savings in different investment tools in order to see your money maximise over a period of time.

    • Endowment Plan
    • This type of plan not only provides you cover but keeps a part of your money aside as a savings amount. If you avail this plan, you can be assured of a lump sum even after your plan attaining maturity.

    • Whole Life Insurance Plan
    • This type of plan offers you protection for the rest of your life. Though the premium payable is slightly higher as compared to a term insurance plan, you can be eligible for various benefits including the tax benefit. Certain plans also offers a lump sum called the maturity benefit which you get as and when your policy attains maturity.

    • Pension Plan
    • Pension Plans helps in ensuring that you continue to live a standard life post your retirement. These type of plans are single term in nature where you decide the payout you want to receive including the frequency.

    • Money Back Plans
    • Moneyback plans ensure that you receive a continuous flow of income getting credited to your bank account. Apart from receiving a death benefit incase of your death, you are also eligible to receive a survival benefit in case you survive the policy term. This plan is perfect for those who do not wish to invest their money in various market tools but still want a regular sum of money to secure their family financially.

  • News About Term Insurance

    • Andhra Bank floats a request for IndiaFirst Life Insurance stake sale

      Andhra Bank informed the bourses that it floated a request for proposal (RFP) for the sale of IndiaFirst Life Insurance stake.

      IndiaFirst Life Insurance company is a joint venture between Bank of Baroda, Andhra Bank, and Legal General in which Andhra Bank holds a 30% stake.

      The board of directors of Andhra Bank, who had met last month, had granted the permission to approve the divestment of the bank’s stake in other joint ventures i.e. ASREC India Ltd and India International Bank (Malaysia) Berhad. The Bank holds a 25% stake in India International Bank (Malaysia) Berhad and 26.02% stake in ASREC India Ltd.

      5 December 2018

    • SBI life insurance looks at making its stakes public by next financial year

      With stakes in SBI insurance valued approximately Rs.12,000 crore, the insurer is looking on letting a few stakes go public in the next financial year - 2019-2020. For the first bid, there has been already a 4% dilution of the insurer, at approximately Rs.481.73 crore. Following the evaluation of the company in September 2018, SBI has stakes worth Rs.12,000 crore. According to the CEO of SBI Life Insurance, Pushan Mahapatra, SBI Life is looking at how much to dilute is a decision to be taken by both the shareholders. The IPO may take place towards the end of 2019-20. The recent dilution is to get an idea about the valuation. He added that SBI Life has a solvency ratio of 2.46% and return of equity percentage of just over 27%. In the present financial year, the company recorded a net profit of Rs.217 crore against Rs.132 crore the previous financial year. In order to correct its loan books, the insurer sold three of its NPAs, for a whopping deal of Rs.2,100 crore plus. The insurer said, in terms of the bank’s policy on sale of financial assets in line with the regulatory guidelines, we place these accounts for sale to banks/ARCs /NBFCs/ FIs on the terms and conditions indicated there against.

      3 December 2018

    • IRDAI’s proposal to reduce minimum sum assured could impact tax benefits

      The Insurance Regulatory and Development Authority of India (IRDAI), in a recent proposal, said that the minimum death sum assured for life insurance products should be at least 7 times the policyholder’s annual premium, regardless of the concerned individual’s age for regular premium and limited premium policies.

      However, income tax laws require the death sum assured to be at least 10 times the annual premium amount for the policyholder to claim tax benefits. Thus, if the minimum death benefit is reduced to 7 times the annual premium, policyholders who opt for a low sum assured might not be able to claim tax benefits unless the tax laws are also altered.

      That being said, if the minimum coverage amount reduces, the minimum premium payable will also decrease.

      29 November 2018

    • Max Life Insurance working on technology to enable auto-fill insurance policy forms

      Max Life Insurance is currently working on a pilot project, wherein technology will be used to read information from documents like PAN cards. Thus, given that almost two-thirds of the form will be automatically filled up once the required documents are scanned, the issuance time will be brought down to 12 minutes from the current 30-35 minutes.

      With regard to medical underwriting, the company has stated that there will an interactive system set in place to send SMSes to the policyholder to enable them to fill the required details accurately.

      Thus, when an insurance policy document is sent to a policy buyer, the policy buyer will first have to scan the required documents, which will then auto-populate the form. Post this, for health-related questions, interactive SMSes will be sent. The policy buyer can reply with a ‘yes’ or ‘no’ to these SMSes and the individual’s details will be filled in the form.

      Once the policy document is completed, further SMSes will sent to ascertain that the customer has understood the various features of the policy and the premium payment term. The next phase of this project will be to have systems like ‘Google Assistant’ fill up the form completely through a text-to-speech model.

      22 November 2018

    • Average Premium Equivalent of private life insurers growth 17% in September

      The Average Premium Equivalent (APE) of private sector life insurance companies witnessed a 17% growth in the month of October 2018, compared to the same period a year ago. Most of the top companies in the private sector performed really well with HDFC Life posting a 36% growth and Max Life posting a 27% growth on a year-over-year basis.

      Among the private companies, ICICI Life witnessed a 17% decline due to its focus shift toward lower-ticket business. State-owned life insurance company SBI Life witnessed a moderate 16% growth in its individual APE.

      Most of the private players have witnessed considerable growth in protection plans and other high-margin policies. After posting single-digit growth for three months, individual APE figures recovered during the month of September driven by a focus on higher-ticket business. Since the focus has shifted towards this high margin products, business growth is likely to remain strong for these players.

      21 November 2018

    • Future Generali Life Insurance launches Comprehensive Employee Benefits Plan

      Future General Life Insurance, one of the leading life insurance firms in India, has recently launched the Comprehensive Employee Benefits Plan. This policy will offer a solution for business owners or employers to manage employees’ gratuity scheme, in addition to offering a number of other benefits such as superannuation and leave encashment.

      The Comprehensive Employee Benefits Plan from Future Generali Life Insurance offers a total of 6 funds that have a portfolio allocation across equities, debt securities, and the money market. Thus, the employer/employee can opt for a particular fund based on market volatilities and their appetite for risk.

      The key benefit of this policy is that it provides an all-in-one solution for superannuation, gratuity, and leave encashment. It also provides loyalty additions at the end of the fiscal to boost policy returns. The insurer also offers systematic transfer of funds to help customers safeguard the fund value against market volatilities. The policy also offers a flexible premium payment schedule. Further, there is no policy administration charge and customers are offered unlimited free switches during the policy term.

      15 November 2018

    • DHFL aims to raise Rs.1,500 crore

      DHFL is aiming to raise Rs.1,500 crore through the sale of 10-year bonds. The bonds are likely to yield an interest of 9.5-10%. It is expected that LIC might subscribe to these bonds.

      The company has paid back commercial paper valued at Rs.9,465 crore since September 21 this year, which included a buyback of Rs.3,240 crore.

      It is also likely that Indiabulls Housing Finance might also raise around Rs.2,500 crore through bond sales.

      7 November 2018

    • IRDAI may allow insurance companies to reduce cover amount, up saving part

      A proposal has been put out by the Insurance Regulatory and Development Authority of India(IRDAI) to bring some changes and standardise life insurance product including some changes to the benefits given to the customer. One of the changes being proposed is the freedom to offer lower cover amount that will increase the savings component in the insurance policy leading to a higher return in exchange for a lower sum assured.

      One of the changes proposed by IRDAI is to make the minimum death benefit 7 times the regular premium products and 1.25 times the single premium products across all ages.

      The other proposal is to allow the insured to get a definite sum of money in case he/she surrenders the policy after two years. Currently, the policyholder is paid a lump-sum amount by the insurance company in case he/she decides to surrender the policy after three years. The regulatory body is yet to signify how the surrender value will be computed.

      30 October 2018

    • Customer service app, Khushi launched by PNB Metlife

      Khushi, a customer service app was launched by PNB Metlife which is one of the largest insurance companies in India. The app is powered by artificial intelligence (AI) and is available for the policyholder to felicitate customised service experience. The meaning of Khushi is Happiness which signifies the insurance company’s motive to bring happy experience to its customers. Khushi will provide 24x7 assistance to its customers.

      PNB Metlife aims to create a disruptive technology in order to provide a personalised experience to its customers.

      Khushi is designed in collaboration with Lumen Lab situated in Singapore. The customer can find information related to his/her policy, the details of premium due to be paid. The customer can also update his/her KYC detail, download receipts and statements, and set important reminder.

      Khushi can understand the intent of its customer and can provide a response to the customer based on the query. Not only can the app interact with the customer via text and speech, but it can also locate the nearest PNB Metlife branch, fix an appointment with advisors, as well as arrange a call back from a representative.

      Khushi is the latest addition to PNB’s tryst with technology led customer solution after it launched conVRSE in 2016, which was an award-winning virtual reality platform service

      29 October 2018

    • SBI General Insurance reports 64% net profit for HI FY2019

      The general insurance arm of State Bank of India (SBI) posted the performance of the first half of the fiscal year 2019. It reported that the company witnessed a 64.4 per cent increase in net profits when compared with the corresponding quarter of the previous fiscal. The net profit amounted to Rs.217 crore and was mainly because the company had a high underwriting profit equal to Rs.37 crore this year. Last year, however, the company had suffered underwriting losses equal to Rs.60 crore in the first half of the fiscal year. The company has said that it has mostly done well in most segments. However, it took a hit of Rs.30 crore during the Kerala floods. With respect to the motor insurance segment, the losses of the company are over 100%. The own damage losses, however, are low – equal to 70%. In the health insurance segment, the company has good underwriting profits. The credit for the health insurance profits is the fact that the company handles corporate as well as retail business under the segment. The year-on-year growth in gross written premium for H1 this fiscal is equal to 30%.

      25 October 2018

    Term Insurance Reviews

    • Max Life Insurance
      "Good"
      0.5 5.0/5 "Blown Away!"
      I have taken a term insurance with Max Life because of the low premium. They have explained me about the benefits and which am happy with it. I need to pay monthly 746rupees for the premium and done through online. I got the insurance papers and sum assured is 50L.
      Was this review helpful? 0
      , bangalore
      Reviewed on Dec 15, 2018
    • Bankbazaarinsurance.com Life Insurance
      "Good"
      0.5 5.0/5 "Blown Away!"
      The response was immediate in bankbazaarinsurance.com, after placing the request online for the term insurance and the representative have called me provided a better option. This is the first time and website is easy to access. overall it was a good experience.
      Was this review helpful? 0
      , bangalore
      Reviewed on Dec 15, 2018
    • SBI Life Life Insurance
      "Better"
      0.5 4.0/5 "Great!"
      I have taken a term insurance through agent with SBI Life before 2 years. They have explained about the benefits. The benefits are average. I pay the premium yearly above 10K through cheque. I got the hard copy for the insurance. The customer service is good.
      Was this review helpful? 0
      , mathura
      Reviewed on Dec 15, 2018
    • HDFC Life Life Insurance
      "Good"
      0.5 4.0/5 "Great!"
      I have taken a term insurance with HDFC Life and previously I had other plans with them since the benefits are good and the settlement rate is also okay. They did not contacted me to inform about the policy. I did not get the hard copy and have paid 9,300 rupees per annum. The sum assured value is around 50L.
      Was this review helpful? 0
      , hoshangabad
      Reviewed on Dec 15, 2018
    • Bankbazaarinsurance.com Life Insurance
      "Easy to approach"
      0.5 4.0/5 "Great!"
      I have taken a term insurance through bankbazaarinsurance.com. The customer service and response is excellent. After raising a request online and less than 5minutes they have called me and done the necessary requirements. This is the first time, It was a good experience.
      Was this review helpful? 0
      , visakhapatnam
      Reviewed on Dec 15, 2018
    • Bankbazaarinsurance.com Life Insurance
      "Excellent"
      0.5 5.0/5 "Blown Away!"
      I have taken a term insurance with the help of bankbazaarinsurance.com and it was recommended by friend. There is no delay in the service, they called me within 1 or 2 minute after placing the request. I have used both website and mobile app, I am comfortable with the website but mobile app is much better.
      Was this review helpful? 0
      , ghaziabad
      Reviewed on Dec 14, 2018
    • ICICI Prudential Life Insurance
      "Need to be quick and more responsible"
      0.5 2.0/5 "Expected more"
      I have not received the documents even I called the customer care thrice and they were informing I will get within a week or 2 weeks but it was not done. I am happy with the plan benefits and policy coverage so I took a term insurance for me with ICICI Prudential.
      Was this review helpful? 0
      , ghaziabad
      Reviewed on Dec 14, 2018
    • Max Life Insurance
      "Good"
      0.5 5.0/5 "Blown Away!"
      I never contacted the customer service, there is no requirement and they have done it on time. I have received the call at the time of processing the policy and explained about the policy to me. I took a term insurance for myself with Max Life. The premium is reasonable and they are offering good benefits.
      Was this review helpful? 0
      , ghaziabad
      Reviewed on Dec 14, 2018
    • HDFC Life Life Insurance
      "Average"
      0.5 5.0/5 "Blown Away!"
      I have taken a term insurance with HDFC Life through online portal. The customer service is better. The premium is reasonable compared to others. Am paying monthly Rs.1085 through ECS. I need to pay the premium till up to 30 to 40 years. The sum assured value is 50L.
      Was this review helpful? 0
      , cuttack
      Reviewed on Dec 11, 2018
    • Bankbazaarinsurance.com Life Insurance
      "Average"
      0.5 5.0/5 "Blown Away!"
      I am very much happy with the service what was offered by bankbazaarinsurance.com . I have used it for the first time through online search. I took a term insurance after comparing with multiple insurer. I don't find any difficulties on the website.
      Was this review helpful? 0
      , cuttack
      Reviewed on Dec 11, 2018
    • Aegon Life Life Insurance
      "They need to improve the interface with the customer"
      0.5 3.0/5 "Satisfactory"
      I have also taken a term insurance with Aegon for my wife. The sum assured value is 30L and I need to pay the premium for more of 10 years. I don't remember the premium. I am okay with the benefits of the policy only the payment mode has to be sorted out.
      Was this review helpful? 0
      , mumbai
      Reviewed on Dec 11, 2018
    • Aegon Life Life Insurance
      "They need to improve the interface with the customer"
      0.5 3.0/5 "Satisfactory"
      I have taken a term insurance with Aegon. I got a feedback from others as the terms and conditions, benefits were good with Aegon so I have proceeded. I had registered for post payment like ECS and every time I am making physical payment monthly which am not satisfied.
      Was this review helpful? 0
      , mumbai
      Reviewed on Dec 11, 2018
    • Aegon Life Life Insurance
      "Average"
      0.5 4.0/5 "Great!"
      The customer service is good. I have taken a term insurance with Aegon basically for the premium. I have to pay it for 20 years and the sum assured value is 50L. The payment mode is ECS and am convenient. I am paying monthly approx 650 rupees. I got the insurance papers on time.
      Was this review helpful? 0
      , mumbai
      Reviewed on Dec 11, 2018
    • Aegon Life Life Insurance
      "Good premium for middle class families"
      0.5 4.5/5 "Excellent!"
      I have taken a term insurance for my wife with Aegon through online portal. I am satisfied with the service and process. The premium is Rs.2848 for one year. The sum assured value is 100,00,000. The payment gateway does not have various option like other websites, its restricted to some other banks only.
      Was this review helpful? 0
      , hyderabad
      Reviewed on Dec 08, 2018
    • Aegon Life Life Insurance
      "Good premium for middle class families"
      0.5 4.5/5 "Excellent!"
      I took a term insurance for myself with Aegon, its very good and they are giving reminder call for the policy renewal. Am getting proper updates from the customer support. I am paying approx Rs.7452 per year through online, the tenure period is 45 years. Sum assured value is 1cr.
      Was this review helpful? 0
      , hyderabad
      Reviewed on Dec 08, 2018
    • Bankbazaarinsurance.com Life Insurance
      "Excellent"
      0.5 5.0/5 "Blown Away!"
      I have used the bankbazaarinsurance.com to purchase the term insurance. I came to know the site through online check. I don't have any issues with the good service. The process is immediate and I got a call on the same day. The website is user friendly.
      Was this review helpful? 0
      , mumbai
      Reviewed on Dec 08, 2018
    • review Life Insurance
      "Good"
      0.5 4.0/5 "Great!"
      I have taken a term insurance with Tata AIA Life before 2 years. The payment mode is online and am convenient. I got the insurance papers. I need to pay till 70 years and the policy value is 80L. I am paying the premium annually more than Rs.8000.
      Was this review helpful? 0
      , hyderabad
      Reviewed on Dec 08, 2018
    • Bankbazaarinsurance.com Life Insurance
      "Good"
      0.5 4.0/5 "Great!"
      The customer and response is good. I have used the bankbazaarinsurance.com for the first time to purchase term insurance. I have checked the details online and opted. Then representative called me and explained about the policy. The process was simple.
      Was this review helpful? 0
      , hyderabad
      Reviewed on Dec 08, 2018
    • ICICI Prudential Life Insurance
      "Good"
      0.5 4.0/5 "Great!"
      I took a term insurance with ICICI Prudential through online. The tenure period is about 75 years. They would consider in the extending term for 100 years. They have sent the insurance papers on time. I am not really satisfied with the benefits. I need to pay annually 12 to 14K through online. The payment mode is easy.
      Was this review helpful? 0
      , hyderabad
      Reviewed on Dec 08, 2018
    • LIC Life Insurance
      "Good policy"
      0.5 4.0/5 "Great!"
      I have taken a term insurance with LIC through offline. Last year, I got the online access to make the payment till that I go to the office and make the payment directly. The customer service is good. The policy name is Jeevan Suraksha and I pay the premium of 10K till my retirement. They will give me a pension after 80 years.
      Was this review helpful? 0
      , chandigarh
      Reviewed on Dec 06, 2018
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