What is Term Insurance?
Term insurance is a type of Life insurance wherein the insured person covers himself for a specific period. If something happens to that person during that period, the cover amount will be paid to the nominee.
What is Term Insurance Premium Calculator?
It is an online tool that helps you to calculate the life insurance cover you will need to financially secure your income and savings. This helps you estimate the life insurance cover amount needed to financially secure your income. Based on this cover amount, you can calculate the premiums to be paid for different policy terms.
Who Should Buy Term Life insurance?
Term Life insurance is a must-buy for a person
- who is the bread earner of the family
- who has major financial responsibilities such as children's education or wedding expenses to be incurred in the future
- who doesn't have sufficient savings or investments but wants to safeguard financial sustenance of his family
- who has debts such as a home loan
Eligibility Criteria to buy Term Life Insurance Plan
General eligibility criteria for buying Term Life Insurance are -
Indian (NRIs & PIOs can also purchase Term Life Insurance plans from various Indian insurers)
Most insurers require you to undergo certain medical tests.
Both smokers & non-smokers are eligible to buy.
Buyer must possess basic KYC documents.
Best Term Insurance Plan In India in 2023
These are a few of the best term insurance plans available in India. You can get various Term insurance comparisons on MyInsuranceClub.
Max Life Smart Term Plan
HDFC Life Click 2 Protect
ICICI Prudential iProtect Smart
Sampoorna Raksha Supreme Instaprotect
Smart Protect Goal
Mera Term Plan Plus
Kotak e-Term Plan
What are the types of term insurance plans in India?
Some of the standard types of term insurance are as follows:
Level Term Plan
A Level Term Life insurance policy offers fixed death benefits for the entire policy tenure. Regardless of whether the insured dies on the 5th or the 25th year of his 30-year policy tenure, his beneficiaries will get the same amount.
Increasing Term Plan
The coverage amount chosen by the insured at the commencement of the policy increases every year by a predetermined amount to cope with the inflation.
Decreasing Term Plan
Decreasing term insurance is a type of term life insurance with the cover decreasing over the life of the policy at a predetermined rate. If you want your life insurance to cover a temporary financial liability, you can purchase a decreasing term plan.
TROP - Term with Return of Premium
TROP pays back the total annualized premium excluding taxes at the end of the policy tenure if the insured survives.
Benefits of a term plan
The main benefits of a term insurance plan are as follows
What are the types of riders for Term Life insurance
The most popular riders are as follows:
Under critical illness rider a lump sum amount is provided to the family of the life assured in case the life assured is diagnosed with a listed critical illness during the policy tenure.
This rider ensures that benefits of the policy continue even if the policyholder is unable to pay policy premiums due to a critical illness or death. All the future premiums are waived off.
This rider pays the accidental death benefit in case the insured dies an accidental death or faces a dismemberment.
This rider provides an additional benefit equal to the rider sum assured on total & permanent disability due to an accident.
Compare different companies' term plans in tabular format
Aditya Birla Sun Life
Bajaj Allianz Life
Canara HSBC OBC Life
Edelweiss Tokio Life
4 Tips for choosing the best term insurance plan for yourself
- Check the claim settlement ratio of that particular company.
- Check for rider facilities if required.
- Cost of premium.
- Solvency ratio of your insurer.
Using these 4 tips, you can buy yourself the best term insurance plan.
5 factors you need to consider before buying a term plan
- Assess your current life stage & dependants.
- Analyze your current lifestyle and standard of living.
- Evaluate your assets and liabilities.
- Analyze your current income.
- Choosing adequate risk cover.
Documents required for Term Life insurance plans
To buy a Term Life insurance plan, one has to submit the following documents:
Claim settlement ratio of Life Insurance companies
|Company Name||2020 - 21|
|Aditya Birla Sun Life|
|Bajaj Allianz Life|
|Tata AIA Life|
|Bharti Axa Life|
|Reliance Nippon Life|
|Future Generali Life|
|IDBI Federal Life|
|Star Union Daichi|
Term insurance plan variants
You have a large number of variants among the term plans on offer. While the base variant offers a life cover, the variants add more benefits in terms of cover and payments. Some of the popular term plan variants are as follows:
- Life Cover with one rider, say a Critical Illness Rider
- Life Cover with multiple riders taken together, say a Critical Illness Rider and an Accidental Death Benefit Rider
- Nominee gets payment in a lump sum or at regular intervals
Terms related to term insurance plan (Glossary)
A sum assured is a fixed amount that is paid to the nominee of the plan in the unfortunate event of the policyholder's demise.
Policy term refers to the period for which your term insurance policy will remain active. This period is determined at the time of purchasing the insurance plan.
Premium Payment Term
Premium payment term is the total number of years the policyholder has to pay the premium.
Premium Payment Mode
Your mode of premium payment determines the frequency with which payments are made. It could be Annual, Half-yearly, Quarterly or Monthly.
Free Look Period
A free look period is the time period when a new life insurance policyholder can terminate the policy without any penalties.
Claim Settlement Ratio
The claim settlement ratio is a metric used to gauge the percentage of life insurance claims an insurer has settled during a financial year against the number of claims it has received including pending claims.
A person who receives the benefit in case of death of the insured person is a nominee.
Tax Benefits refer to the insurance premiums amounts which can be deducted from the taxable income for the purpose of calculating your income tax liability.
FAQs related to term insurance plan
Below mentioned are the most Frequently Asked Questions on Term Insurance.