Term insurance is a type of life insurance that provides coverage for a specific period of time or years.
Term Insurance is the most affordable form of insurance that provides high life cover for a specific period of time.
Term insurance is a pure life insurance product, which provides financial protection to the policyholder.
In case of death of the insured during the policy period, the beneficiary receives a death benefit as defined under the chosen term insurance plan.
You can avail a Term Insurance policy by paying a low premium and secure the financial needs of your family in your absence
This type of life insurance provides financial protection to the nominee in case of any unfortunate event with the policyholder during the policy term.
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Term insurance is one of the market’s most popular types of insurance schemes. You must have come across term insurance once in a while.
Term insurance is a protection plan for your family.
A “term” plan not only offers financial security to your family but also is capable of fulfilling its future needs such as your child’s higher education, child’s marriage, etc.
EXAMPLE: A 24-year-old healthy, non-smoking male can secure a cover of Rs. 1 crore for his dependents for the next 25 years. If he buys a term insurance policy, he will only pay approximately Rs. 537 per month, exclusive of taxes (Premium for Max Life Online Term Plan).
Eligibility Criteria of Term Life Insurance:
Before anyone can take a life insurance policy, they will have to meet certain eligibility criteria which can be:
- The minimum age of the policyholder will have to be 18 years old when taking the plan.
- The maximum entry age will depend on the minimum tenure of the policy.
- The maximum age at the time of maturity for these policies can be 75 years but this could change from one insurer to the next.
- The minimum age for maturity will be determined based on the minimum age at entry and the minimum tenure offered.
- The sum assured will also be a factor in calculating the eligibility as many policies have a fixed minimum sum assured.
- This may not be mandatory but some insurers may ask you to undergo a medical check-up prior to taking the policy.
Top Features of Term Insurance Policy
| Key Features | Benefits Offered |
| Death Benefits of Term Life Insurance | A predefined amount is paid out to the nominee in case of the unfortunate demise of the policyholder |
| Maturity Benefits | Available under Term Insurance with Return of Premium option |
| Tax Benefits | Available under all types of term insurance plans. |
| Riders/ Add-on Covers | A number of rider benefits or add-on covers such as critical illness, waiver of premium, and extra payout on accidental death/disability are available with Term insurance plans. |
| Coverage Against Various Liabilities of Term Insurance | Most Term insurance policies provide coverage against various liabilities of the policyholders like mortgages, loans, and other types of debts. |
| Buying Process | Online and Offline |
| Claim Assistance | Available |
| Claim Process | The easy online and offline claim process |
| Physical Paperwork | Only in case of offline policy purchase |
| Premium Payment Frequency in Term Life Insurance | Annual Quarterly Half-yearly Monthly Single |
| Payout Options of Term Plan | One Time Payout, One Time Lump-Sum Plus Fixed Monthly Payouts, Fixed Monthly Payouts, and One Time Lump Sum Payment Plus Increasing Monthly Payouts |
| Sum Assured (Min/Max) | Minimum – Starts at Rs. 5 Lakhs/ Maximum – No Limit |
Types of Term Insurance Plans
Just like every other insurance plan, there are different variants of term insurance. Each is unique with its own set of features and benefits. But the underlying death benefit payout remains the same.
These are the most popular term plans in the market:
Standard Term Insurance Plan
This is the most common and basic type of term plan. All insurers offer it. Under this plan, you pay the premium regularly to avail of the high sum assured. In case of your death, the sum assured will be paid to your family members. There is no maturity and survival benefit in this variant.
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Term Return of Premium
As the name suggests, you get back all of the premium paid in case you survive till the end of the policy period. It is an excellent option to take if you want all your money back.
Increasing Term Insurance Plan
This is similar to a standard term insurance plan with an added benefit. The life cover regularly increases by a specific percentage, usually 5%-10% of the original cover annually. This plan is ideal for beating inflation.
Decreasing Term Insurance Plan
This is the opposite of the plan mentioned above. Under this policy, your life cover decreases on an annual basis at a specific percentage.
Life Stage Event Term Insurance Plan
This is a new type of term policy. Under this plan, you have the option to increase the life cover at a particular milestone of life such as marriage, the birth of children, children’s graduation, etc. You can select different milestones.
Convertible Term Insurance Plan
Under this plan, you have an option to convert your standard term policy into an endowment savings plan or a whole life insurance policy.
Joint Life Term Insurance Plan
This is a standard term insurance variant under which you can cover yourself and your spouse. In case of death of anyone, the surviving partner will receive the death benefit. In case the surviving partner also passes away, the payout will be given to the legal heirs.
Group Term Insurance Plan
A group term policy covers a group of employees of a specific company. It covers all the members employed by a company. You will lose this benefit once you have resigned from your company.
Best Online Term Insurance Plans in India:
Term Plans Entry Age (Min / Max) Maturity Age Policy Term Premium Payment Option Minimum
Sum Assured LIC's e-Term 18 / 60 Years 75 10-35years Annual Rs. 25 lakh for Aggregate
category Rs. 50 lakh for Non-smoker category Max Life Online Term Plan 18 / 60 Years 70 10 - 35 years Annual Rs 25 lakh BSLI [email protected] 18 / 55 Years 80 5-30 years Monthly (ECS), Annual & Single Rs. 50 lakh Tata AIA iRaksha Supreme 18 / 70 Years 80 10-40 years Annual, Semi-Annual, Single Rs 50 lakh ICICI prudential - iProtect Smart Plan 18 / 65 Years 75 5-40 years Monthly, Halfyearly, Annual & Single Subject to minimum premium paid PNB Metlife - Mera Term Plan 18 / 65 Years 75 10-40 years Monthly & Annual Rs. 10 lakh Bajaj Allianz iSecure 18 / 60 Years 70 10 | 15 | 20 | 25 | 30 years Monthly, Quarterly, Semi-Annual, Annual Rs.2.5 lakh for general category
Rs.20 lakh
for the categories split by Preferred Non-Smoker,
Non-Smoker & Smoker Kotak Preferred e Term Plan 18 / 65 Years 75 10-40years Monthly, Yearly, Single Rs 25 lakh HDFC Life Click 2 Protect Plus 18 / 65 Years 75 10 – 40 years Monthly, Quarterly, Semi-Annual, Annual Rs 25 lakh AEGON Life iTerm Plan 18 / 65 Years 75 5 - 40 years; or upto 75years Annual Rs10 lakh SBI Life - eShield 18 / Max: 1.For Level Cover & Level Cover with Accidental Death Benefit: 65 years 3.For Increasing Cover & Increasing Cover with Accidental Death Benefit: 60 years 70 Min: For Level Cover & Level Cover with Accidental Death Benefit: 5 years For Increasing Cover & Increasing Cover with Accidental Death Benefit: 10 years MAX- 30 years Annual Rs. 20 lakh Reliance Online Term 18 / 55 Years 75 10 | 15 | 20 | 25 | 30 | 35 years Annual Rs 25 lakh Future Generali - Flexi Term Plan 18 / 55 Years Min: 10 years , Max: Smoker: 65 years minus Entry Age, Non-smoker: 75 years minus Entry Age Annual Rs. 50 lakh Aviva I Life 18 / 55 Years 70 10 - 35 years Half-Yearly, Yearly Rs 25 lakh Bharti Axa Life – eProtect 18 / 65 Years 75 Fixed Policy Term - Minimum - 10 years, Maximum - 30 years Customised Policy Term - Up to 60 years, Up to 65 years, Up to 70 years, Up to 75 years Annual Rs. 25 lakh IDBI Federal - iSurance 18 / 50 Years 75 10-25 years Annual Rs 50 lakh IndiaFirst Life - Anytime Plan 18 / 60 Years 70 5-40 years Monthly (ECS), Half-Yearly, Annual, Single Rs. 10 lakh Edelweiss Tokio - MyLife+ 18 / 60 Years 80 10 | 15 | 20 | 25 | 30 | 35 | 40 years; & 80years minus Age at Entry Annual Rs. 25 lakh
List of Top 10 Best Term Life Insurance Plans In India
Insurers Term Plan Claim Settlement Ratio Max Maturity Age Premium (for a cover of 1 crore) Aditya Birla Sun Life Insurance ABSLI LifeShield Plan 98.02% 75 years Rs. 623/month Aegon Life iTerm 98.01% 100 years Rs. 479/month Bajaj Allianz Life Cover 98.48% 85 years Rs. 458/month Canara HSBC OBC Life Insurance iSelect+ LumpSum 98.12% 99 years Rs. 480/month EXIDE Life insurance Exide Life Elite Term 98.54% 70 years Rs. 451/month Edelweiss Tokio Zindagi Plus+ Lump sum 97.0% 80 years Rs. 478/month Future Generali Future Generali Flexi Online Term-Lumpsum 95.2% 75 years Rs. 486/month HDFC Life Life Option 98.01% 85 years Rs. 709/month ICICI Prudential iProtect Smart Lumpsum 97.9% 85 years Rs. 647/month India First e-Term Plan 96.81% 65 years Rs. 422/month Kotak Life e-Term 98.5% 75 years Rs. 654/month Max Life Smart Term Plan Life Cover 99.35% 75 years Rs. 571/month PNB Metlife Mera Term Plan-Full Lumpsum payout 98.17% 99 years Rs. 585/month Reliance Nippon Life Insurance Reliance Digi-Term 97.71% 65 years Rs. 500/month SBI Life eShield 94.5% 80 years Rs. 589/month Tata Aia TATA Maha Raksha Supreme Lumpsum 98.02% 85 years Rs. 927/month
Disclaimer: “AFPR does not endorse, rate, or recommend any particular insurer or insurance product offered by an insurer.” We just Provide Information
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Best Term Insurance Companies in India
Following is the list of best-term insurance companies in India:
| Term Insurance Company | Claim Settlement Ratio (2019-20) |
| Max Life Insurance | 99.22% |
| HDFC Life Insurance | 99.07% |
| Tata AIA Life Insurance | 99.06% |
| Pramerica Life Insurance | 98.42% |
| Exide Life Insurance | 98.15% |
| Reliance Life Insurance | 98.12% |
| Canara Hsbc Life Insurance | 98.12% |
| Bajaj Allianz Life Insurance | 98.02% |
| Aegon Life Insurance | 98.01% |
| ICICI Prudential Life Insurance | 97.84% |
| Aditya Birla Sun Life Insurance | 97.54% |
| Aviva India Life Insurance | 97.53% |
| Bharti Axa Life Insurance | 97.35% |
| PNB MetLife Insurance | 97.18% |
| Daiichi Life Insurance | 96.96% |
| Life Insurance Corporation India (LIC) | 96.69% |
| India first Life Insurance | 96.65% |
| Ageas Federal Life Insurance | 96.47% |
| Kotak Life Insurance | 96.38% |
| Future Generali Life Insurance | 95.28% |
| SBI Life Insurance | 94.52% |
| Shriram Life Insurance | 91.61% |
| Sahara India Life Insurance | 89.45% |
| Edelweiss Tokio Life Insurance | 83.44% |
(Source: IRDAI Annual Report – Claim Settlement Ratio for the year 2019-20)
Top Offline Term Life Insurance Plans in India
Offline term insurance plans are more expensive than online plans. Irrespective of that, they provide a good amount of life insurance coverage for relatively low premiums.
Offline term insurance policies are far more cost-effective than endowment or money-back insurance policies. Some of the advantages of taking an offline plan include:
- Policyholders get the assistance of insurance agents while applying for the plan.
- Customers can get reminders from insurance agents on premium payment due dates, leading to timely payments.
Term Plans Minimum Entry Age Maximum Entry Age Policy Term Sum Assured Payout Type Riders Available Bajaj Allianz iSecure More 18 60 10, 15, 20 & 25 years Rs. 2.5 lakh Income Yes HDFC Life CSC Suraksha Plan 18 55 5 years to 15 years Min-Rs. 30,000 Max- Rs. 2 lakh Lumpsum No SBI Life - Smart Shield 18 60 Min: 5 years Min: Rs 25 lakh (in multiples of Rs.1 lakh) Income Yes SBI Life - Grameen Bima 18 50 5 years Min: Rs. 10,000 Max: Rs. 50,000*(*Aggregate Sum Assured under this plan will be capped at Rs. 50,000 for each life) NA NA
Term Plan Comparison
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For a better understanding of our readers, here we have shown the term plan comparison chart.
Plans Entry Age Policy Term Premium Paying Term Sum Assured Incurred Claim ratio Aviva Life Shield Advantage Plan 18 years/55 years 10 years-30 years Single pay, Regular pay Min-Rs.35,00,000 Max-Option A- No upper limit Option B- Rs.50,00,000 96.06% Bajaj Allianz iSecure Plan 18 years/60 years 10,15, 20,25 & 30 years Regular pay Min- Rs.2,50,000(general category)Rs.20,00,000 (split category) Max- No upper limit 95.01% Bharti Axa Life Flexi Term Plan 18 years/65 years 5, 10,15,20 years Regular pay Min- Rs.10,00,000 Max-Rs.25,00,000 97.28% Canara HSBC iSelect Term Plan 18 years/65,55, 50, 45 years N/A Single pay, limited pay Min-Option 1- Rs.25,00,00 Option 2- Rs.50,00,000 Option 3- Rs.15,00,000 Max- No upper limit 94.04% Edelweiss Tokio Life Protection Plan 18 years/60 years 10-30 years Single pay, regular pay Min- Rs.15,00,000 Max- No upper limit 95.82% Exide Life Elite Term Plan 21 years/60 years 10-40 years Regular Pay Min- 50L Max- 10 Cr 98.54% Future Generali Flexi Online Term Plan 18 years/55 years 10 years- 65 years minus entry age(smokers) 10 years-75 years minus entry age (non-smokers) Equal to policy term Min- Rs.50,00,000 Max- 10,00,00,000 95.16% HDFC Life Click 2Protect Plus 18 years/65 years 5 years-85 years minus the age at entry 10 years-40 years Regular pay, limited pay & single pay N/A 99.04% ICICI Pru iProtect Smart Plan 18 years/65 years 5,10,15,20 years Single pay, limited pay, regular pay N/A 98.58% IDBI Federal Termsurance Life Protection Plan 18 years/60 years 10-30 years Single Pay, regular Pay Min-Rs.5,00,000 Max- No upper limit 95.79% Kotak e-Term Plan 18 years/65 years 5 years-40 years Regular pay, limited pay, single pay Min-Rs.25,00,000 Max- No upper limit 97.40% LIC Tech Term Plan 18 years/65 years 10 years-40 years Equal to policy term Min-Rs.25,00,000 Max- No upper limit 97.79% Max Life Smart Term Plan 18 years/60 years Regular Pay- 10 years-50 years Limited Pay- 15 years-50 years Regular pay, limited pay Min-Regular Pay- Rs.25,00,000 Limited Pay- Rs.25,00,000 Max- Rs.100 crore 99.22% PNB Metlife Mera Term Plan 18 years/65 years 10 years-81 years Regular Pay & limited pay N/A 96.21% Pramerica Life TruShield 18 years/45,50,55 years 7 years, 10 years, 12 years, 15 years &20 years Regular pay, limited pay Min-Rs.5,00,000 Max-Rs.50 Crore 96.80% SBI Life eShield Plan 18 years/60 years, 65 years 5 years- 80 years minus the age at entry 10 years-75 years minus the age at entry Equal to Policy Term Min-Rs.35,00,000 Max-No upper limit 95.03% Shriram Life Smart Protection Plan 18 years/65 years 10 years-30 years Equal to policy term Minimum- Rs,1,00,000 Maximum-Rs.14,00,000 85.03% Star Union Dai-ichi Life Abhay 18 years/65 years 15 years-40 years Single pay, regular pay Min-Rs.50,00,000 Max-Rs. 100crore 96.74% TATA AIA Sampoorna Raksha 18 years/70,65,50 years 10years-85 years minus age at entry, 15 years-85 years minus age at entry For Whole Life- 100 years minus age at entry Limited Pay, Regular Pay Min-Rs.50,00,000 Max- No upper limit 99.07%
Benefits of Term Insurance Plan
- Your term plan can help you and your family in many ways. Here are a few:
Low cost of premium
- The best feature about a term insurance plan is that you can get a large cover at an affordable premium. Plus, the earlier you buy, the lesser the premium you pay.
Complete life cover
- May term plans come with an option of coverage till the age of 100 years. This is known as a whole life term insurance plan.
Financial protection
- Your family will receive the sum assured from the insurer in the form of a regular payout or as a lump sum in case of your death. The payout will take care of your family’s needs.
Tax benefit
- Premiums paid towards a term insurance plan and the money received on death are eligible for tax exemption under Section 80C and Section 10(10D) of the Income Tax Act, 1961.
Rider options
- You can get multiple rider options for your existing terms insurance plan such as Terminal Illness Cover, Critical Illness Cover, Accidental Death Benefit, Waiver of Premium, Daily Hospital Cash, Personal Accident Cover, Partial/Permanent Disability Cover, and many more.
- Riders come at the cost of an additional premium.
High protection at low premiums
- Life insurance policies are accessible to the masses since they provide a large cover at relatively low premiums.
- The earlier in life you purchase term insurance, the lower the premium.
Add ons
- Due to unfortunate circumstances, the policyholder may be incapacitated due to an accident or the diagnosis of a critical illness. This would impact the income earning capability of the policyholder.
- In such cases, the policyholder’s family may find it difficult to manage expenses.
- To protect oneself against such scenarios, one can consider augmenting the term insurance plan with multiple add-ons or riders.
- Examples of some of these add-ons include critical illness coverage, an accidental disability rider, etc.
- A critical illness cover would provide a lump sum amount which is equivalent to the death benefit if the policyholder is diagnosed with any of the covered critical illnesses.
- The accidental disability rider will ensure that the policyholder gets paid a regular monthly income which would be a certain percentage of the sum assured for a specified period.
Financial security
- The death of the breadwinner of the family is not only distressing, but it also brings about financial liabilities.
- Life insurance ensures that daily expenses do not suffer as a result of the insurer’s death.
- The pay-out resulting from the insurance policy can be received in the form of a lump sum or installments to enable the family to cope with their living expenses.
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Top 6 FEATURES OF TERM INSURANCE
These are some of the Best features of term Life insurance plans:
Low entry age
Term insurance plans have a minimum entry age of 18 years only. You can buy a term plan and secure your loved ones as soon as you reach adulthood
Long term protection
The term plan offers long policy tenures of up to 40 years that allow you to protect your family members for a long time
Easy to Buy
Term insurance can be purchased online in minimal steps. You can compare different plans and features with a few clicks and pick a plan that suits your needs the best. The submission of documents, premium payment, and all other customer queries can be submitted online from the comfort of your home or office
Easy premium payment options
Term insurance plans offer flexible premium payment options like monthly, quarterly, or yearly payment
Adjustable cover
The term plan is flexible and allows you to increase or decrease the sum assured basis of your financial condition
Liability protection
The sum assured of a term insurance plan can be used to ensure your family’s financial security and protect them from debt liabilities like a loan repayment
HOW TO CHOOSE THE RIGHT TERM INSURANCE PLAN?
While buying a Term Plan, we always have questions like which Term Plan is best and how to compare the best Term Life Insurance Plan. Here are some parameters which may help you choose the best Term Plan for yourself:
- Claim Settlement Ratio
This ratio tells you how many claims for life insurance have been paid out as a proportion of claims made. The higher this ratio is, the better fact: ICICI Pru Life has a claim settlement ratio~ of 97.8%.
- Solvency Ratio
The solvency ratio tells you whether the insurer you choose will be financially capable of settling your claim if the need arises. IRDAI mandates that every life insurer should maintain a solvency ratio of at least 1.5
- Option to add Critical Illness Benefit
A critical illness like cancer or brain surgery can cost a lot of money and cripple the family’s finances. Critical illness protects your family from this risk. It pays out immediately on diagnosis, and only medical documents confirming diagnosis are to be submitted.
- Option to add Accidental Death Benefit
If you have opted for Accidental Death cover, your family will get an additional payout in case of death due to an accident, subject to a maximum of `2 crore.
- Waiver of Premium on Terminal Illness
In case the person covered by the policy gets affected by a terminal illness, his/her future term plan premiums will need not be paid.
Term Insurance Comparison Chart
Here is a comparison of a few term insurance plans:
BEST TERM INSURANCE PLAN AGE AT ENTRY SUM ASSURED POLICY TERM ICICI Pru iProtect Smart 18-65 years Rs. 10 lakhs min, no such limit on max amount 5-40 years Aegon iTerm Plan 18-65 years Rs. 25 lakhs min, no such limit on max amount 5-40 years HDFC Click 2 Protect Plus 18-60 years Rs. 10 lakhs min, no such limit on max amount 10-40 years Max Life Term Insurance Plus 18-60 years Rs. 25 lakhs min Rs. 100 Cr max 10-40 years LIC’s e-Term Plan 18-60 years Rs. 50 lakhs min, no such limit on max amount 10-35 years
Claim Settlement Ratio of Term Insurance Companies
| TERM INSURANCE PLANS | CLAIM SETTLEMENT RATIO |
|---|---|
| Tata AIA Life Insurance | 99.07% |
| SBI Life Insurance | 95.03% |
| Reliance Nippon Life Insurance | 97.71% |
| Birla Sun Life Protector Plus plan | 96.21% |
| PNB Metlife Insurance Company | 97.79% |
| Life Insurance Corporation of India | 97.40% |
| Kotak Life Insurance Company | 92.82% |
| India First Life Insurance Company | 95.79% |
| IDBI Federal Life Insurance Company | NA |
| ICICI Prudential Life Insurance Company | 98.58% |
| HDFC Life Insurance Company | 99.04% |
| Future Generali Life Insurance | 95.16% |
| Exide Life Insurance Company | 98.54% |
| Edelweiss Life Insurance | 95.82% |
| Canara HSBC OBC Life Insurance | 94.02% |
| Bharti AXA Life Insurance Company | 97.28% |
| Bajaj Allianz Life Insurance | 95.01% |
| Aditya Birla Sun Life Insurance | 97.15% |
| Aviva Life Insurance Company | 96.06% |
| Aegon Life Insurance Company | 96.54% |
Disclaimer: The above information has been sourced from the Insurance Company’s Website.
Last updated on 16th Jule 2021.
Term Life Insurance Plans Offered by the Government of India
The Indian Government has taken multiple steps to ensure the financial security of the people and their dependents. These plans are also known as Government-sponsored social security schemes.
- PMJJBY – Pradhan Mantri Jeevan Jyoti Bima Yojana – This is a standard life insurance plan that offers Rs. 2 lakhs as cover to the family of the deceased policyholder. It comes at the premium cost of Rs. 330 per year. Citizens between the age group of 18 to 50 years are eligible.
- PMSBY (Pradhan Mantri Suraksha Bima Yojana) – This is a standard term insurance plan that offers Rs. 2 lakhs for accidental death and full disability and Rs. 1 lakh for partial disability. It comes at the premium cost of Rs. 18 per year, and individuals between 18 and 70 are eligible.
- PMJDY – Pradhan Mantri Jan Dhan Yojana – Although this is a savings bank account scheme established by the Government of India, it offers risk cover to the account holders. The account provides a life cover of Rs. Thirty thousand upon the death of the life assured and a build-in accident insurance cover of Rs. 1 lakh.
- Aam Aadmi Bima Yojana (AABY) – This is a group insurance social security scheme for the low working section of the Indian society. This policy covers death due to natural causes, accidents, partial disability, or permanent total disability.
WHEN SHOULD YOU BUY TERM INSURANCE?
When it comes to buying Term Insurance, it is best to begin as early as possible. The premium of your term insurance increases with your age. Hence, to make the most of your term plan, it is advisable to buy a term plan at an early age. The below table will help you understand how your term insurance premium increases as per your age. The examples are in relation to a non-smoker.
Age Base policy Premium(Life Cover ₹ 1 crore) With Critical Illness benefit(₹ 10 lakh) With Accidental Death Benefit(₹ 50 lakh) With Critical Illness(₹ 10 lakh) + Accidental Death Benefit (₹ 50 lakh) 25 years ₹ 573 ₹ 699 ₹ 860 ₹ 986 35 years ₹ 823 ₹ 1,151 ₹ 1,110 ₹ 1,438 45 years ₹ 1,790 ₹ 2,696 ₹ 2,077 ₹ 2,983 55 years ₹ 3,841 ₹ 5,939 ₹ 4,128 ₹ 6,226
The given premiums are applicable for a healthy non-smoker male with a monthly mode of payment and premiums paid regularly for the policy term of 15 years with an income payout option with Life Cover of ₹ 1 crore and optional add-on benefits respectively.
Features of a Term Life Insurance Policy in India
Term insurance is that form of life insurance that is most easy to understand. There are several advantageous features of a term plan that you should know before buying one.
Save Tax U/S 80C & 80D of income tax act 1961
The premium you pay for your term insurance plan can save tax for you. Critical illness premium paid under the term insurance policy saves tax for you u/s 80D, while term insurance premium is counted u/s 80C of Income Tax, subject to conditions. Tax benefits are as per prevailing tax laws which are subject to change.
Low Entry Age
Most term insurance plans have a minimum entry age of 18 years; that is, you can buy term insurance cover as soon as you hit adult age.
Long Policy Term
You can opt for a longer term for your term plan to stay protected. You can stay covered for up to 50 years with a term life insurance of Max life.
Death Benefit as Regular Income
Modern term insurance plans allow you to give your dependents a regular income along with the lump sum benefit in the event of your unfortunate demise.
Disability Benefit with Term Insurance Plan
Any kind of disability due to an accident or illness can affect your income earning capacity. You can add a disability benefit rider with your term insurance plan at affordable prices. The disability cover is available on payment of an additional premium with the base term insurance premium.
Premiums Returned on Survival
You can now receive all your money back if you survive the term insurance tenure. Term insurance plans with the return of premium benefit offer to return all the paid premiums on the policy as survival benefit.
Cover Against Life-Threatening Diseases
Cancer, heart attack, and renal failure are some curable diseases that can be life-threatening. Don’t let money concern you on the way to the cure of these diseases. Critical illness cover is available with term insurance plans on payment of an additional premium.
High Maturity Age
Of all life insurance plans, term insurance offers the life cover for the highest age bracket. You can continue term insurance cover up to the age of 85 with term insurance plans from Max Life Insurance.
Top 7 Factors Affecting Term Life Insurance Premium
Your term insurance premium depends on a lot of different factors. These factors influence the price of your policy. Here are a few:
- How Old Are You?
Age is one of the most prominent factors that influence the price of your term insurance premium. That is why insurers always say, ‘it is better to buy a policy when you are young, and the premium is less because the amount of premium payable increases with age.
- What Do You Do?
Insurers consider individuals based on the type of occupation. If you work in a hazardous environment such as a coal mine, chemical factory, oil rig, or fire department, you carry more risk than people employed in a stable office environment. Thus, the premium is expensive for high-risk occupations.
- Your Gender
Insurers consider women’s lives less risky than men’s as men throughout the world do most of the dangerous workload. Therefore, the premium is cheaper for women.
- Body Mass Index
If you do not live a healthy lifestyle and are overweight, you are more likely to develop harsh health conditions during the latter years of your life. Insurers charge a higher premium for such individuals.
- Family History or Existing Medical Complications
If you are genetically prone to lifestyle diseases or have a history of terminal illness in your family, your premium payment amount is going to be expensive.
- Place of Residence
If you live in a geographical location that is subject to natural calamities such as floods or earthquakes, your premium payment amount will be expensive.
- Substance Abuse
Smokers and alcoholics have no option but to shell out more money for the premium payment amount.
DOCUMENTS REQUIRED FOR TERM INSURANCE
The documents required to complete the application of a Term policy are:
- A recent photograph of the policyholder
- Copy of PAN
- Address proof – This can be any of the following: Aadhaar – front & back/ Driving License/ Passport – front & back
- Income proof – Do note, that your income proof should match with your declared annual income. Also for salaried applicants: Last 3 months’ salary slip/ Form 16/ Last 3 years ITR/ Last 6 months’ bank statement where salary gets credited. For non-salaried applicants: Last 3 years ITR with computation of income
PAYOUT OPTIONS IN TERM LIFE INSURANCE
A term insurance plan is a pure protection plan that offers a life cover to the policyholder in return for timely premium payments. If you buy a term policy, you will be asked to name a nominee.
This could be a child, spouse, parent, sibling, or any other loved one. In case of an unfortunate event, the chosen sum assured will be paid to this nominee, depending on the payout method you opt for. Here’s how this works:
Lump sum
Under this method, a single payment will be made to the nominee in case of an unfortunate event. This money can be used at the discretion of the nominee
Income
Under this, the nominee will receive equal monthly income payments in the event of any mishap. This can act as a substitute for your income in your absence
A combination of both
Under this, a part of the sum assured will be paid as a lump sum and the remaining will be given as equal monthly income payments. This can help families who may have varied financial needs
Increasing income
With this option, your nominee will receive increasing monthly installments for 10 years. The income will increase by 10% simple interest every year until the entire sum assured is paid.
Term Life Insurance Payouts Details
1. Lump-sum
The entire sum assured amount is paid at one go to the beneficiary of the term insurance policy.
For example-Sum assured= 1 crore Payout= Rs.1 crore as a lump-sum payment to the beneficiary of the term insurance policy.
2. Lump-sum + Monthly Income
Half of the sum assured amount is paid as a lump-sum payment to the beneficiary of the term insurance policy, whereas, the other half of the sum assured amount is paid as monthly income to the beneficiary of the policy.
For example-Sum assured= Rs.1crore Payout= Rs.50 lakh as a lump-sum payment at the time the claim is made by the nominee and Rs.50,000 every month as a death benefit.
3. Income Replacement or Monthly Income
A fixed percentage of the sum assured amount is paid as monthly income from the first month of the life insured’s death.
For example-Sum assured= Rs.1 Crore Payout= Rs. 1 lakh per month (Rs. 12 lakh yearly) for approximately 83 months.
Few FAQs about Term Life Insurance
How long do term insurance policies last?
Most term life insurance policies provide cover until the policyholder reaches the age of 60 – 80 years.
Can I Buy Two Term Life Insurance Together?
Yes, you can buy Two or more term insurance plans if you satisfy the underwriting criteria set by a life insurance company. Be sure to inform the insurance company that you already have a life insurance plan and are proposing to buy a second-term plan.
What is the use of the LIC Tech Term Plan?
LIC Tech Term Plan is a non-linked, non-participating online pure risk term insurance plan. It provides financial security to your family in the event of your demise during the policy period.
However, if the policyholder survives the term of the insurance plan, no benefits are payable. LIC’s Tech-Term plan can only be availed via the online application process. You can check the complete plan details on Coverfox by visiting the dedicated LIC Tech Term Plan page.
Who needs Term Life Insurance?
Any person who has dependents and financial obligations to be fulfilled like supporting the family, paying off loans, debts, etc., must buy a term insurance plan without fail.
People like Young professionals, Newly-Married, Parents, Working Women, Borrowers/Debtors need life insurance with the utmost priority.
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Best Term Insurance Plans in India