Life Insurance

What is Term Life Insurance?

Term insurance is a type of life insurance that provides coverage for a specific period of time or years. This type of life insurance provides financial protection to the nominee in case of any unfortunate event with the policyholder during the policy term. Term Insurance policies provide high life cover at lower premiums.

For e.g.: Premium for ₹ 1 Crore Term Insurance cover could be as low as ₹ 441* p.m. These fixed premiums can be paid at once or at regular intervals for the entire policy term or for a limited period. 

Premium amount varies based on the type of the premium payment method opted by the buyer.

WHO SHOULD BUY A TERM INSURANCE POLICY?

Anyone with financial dependents should buy a Term Insurance Policy. This includes married couples, parents, business people and self-employed, SIP investors, young professionals with dependent parents, and in some cases, even retirees.

TERMS RELATED TO TERM INSURANCE

Here are some terms you must know:

The Claim Settlement Ratio (CSR) is the ratio of the total number of claims raised in a year and the number of claims settled in a year by an insurer. The higher the number, the more reliable the insurance company is, as the chances of your family’s claim being rejected are low.

This is the money you pay to the insurance company in return for financial protection. Premiums can be made in monthly, half-yearly, and annual instalments. Premiums tend to increase as you age.

To enhance the coverage of your plan, you can add benefits to your plan, such as a critical illness rider, an accidental death rider, or a permanent disability rider. Riders come at a nominal cost over the premium.

This is the amount of money that your nominee will receive in case of an unfortunate event. This also determines the premium amount for the term plan

This is the same as a sum assured and is given to the nominee in case of an unfortunate eventuality.

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 your financial condition
Term insurance plans offer flexible premium payment options like monthly, quarterly or yearly payment

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
Term insurance plans offer flexible premium payment options like monthly, quarterly or yearly payment
  • High Life Insurance Amount at affordable premiums:
  • Term Insurance plans provide a large amount of life insurance cover at an affordable premium. This cover can compensate for several years of lost earnings
  • Cover Against Critical Illnesses:
  • Along with providing life cover, some policies also provide protection against critical illnesses. For a small additional premium, Critical Illness Cover provides lump sum payments when a critical illness like a heart attack, cancer, kidney failure, or any other critical illness is first diagnosed
In new-age Term Plans some Insurance Companies pay your future premiums in case of total and permanent disability. As a result, your life insurance cover continues even if you are unable to pay premiums
To increase the security of your family, a Term Policy provides additional payout (up to 2 crore) in case of an accidental death. For example, if your life cover is 1 crore, a Term Insurance Plan with Accident Death Cover pays 2 crore to your family in case of an accidental death
Term Insurance plans offer tax benefits on premiums paid up to 46,800 under Section 80C. New-age Term Plans with critical illness cover also offer additional tax benefits on premiums paid up to `7,800 under Section 80D. You also get tax benefits subject to conditions under Section 10(10D) on the money that your family receives in case of an unfortunate event
In the unfortunate event of death during the policy term, your family receives the death benefit from term insurance. Your nominee can choose to receive a regular income along with a lump sum benefit in your absence.
Standard term insurance does not offer any benefits if you survive the term. However, a return of premium term plan also provides you with a lump sum or regular income as guaranteed benefits to help you fulfil varied financial goals. The term plan pays back an amount that is at least equal to the total premium paid.
  • Basic Term Insurance Plan: The basic term plan comes with a life cover that is paid in the form of a lump sum in case of an unfortunate event with the policyholder during the policy term. There is no maturity benefit in this plan.
  • Term Insurance Plan with Critical Illness Cover: In addition to life cover, this term plan comes with a critical illness cover that is paid out in case the policyholder is diagnosed with any of the 34 specified critical illnesses like cancer, heart attack, or any other critical illness.
  • Term Insurance with Accidental Death Cover: A term plan that gives additional cover in case of any mishap due to an accident.
  • Term Insurance with Limited Pay: A term plan that lets you get done with all your premium payments in a few years while the plan benefits continue for the entire policy term.

Types of Life Insurance

Term Life Insurance

Term life insurance guarantees payment of a stated death benefit to the insured’s beneficiaries if the insured person dies during a specified term. These policies have no value other than the guaranteed death benefit and feature no savings component as found in a whole life insurance product.Term life premiums are based on a person’s age, health, and life expectancy. Depending on the insurance company, it may be possible to turn term life into whole life insurance.You can often purchase term life policies that last 10, 15, or 20 years.

Permanent Life Insurance

Permanent life insurance is an umbrella term for life insurance policies that do not expire. Typically, permanent life insurance combines a death benefit with a savings portion. The two primary types of permanent life insurance are whole life and universal life. Whole life insurance offers coverage for the full lifetime of the insured, and its savings can grow at a guaranteed rate. Universal life insurance also offers a savings element in addition to a death benefit, but it features different types of premium structures and earns based on market performance.

WHEN IS THE RIGHT TIME TO BUY A TERM INSURANCE PLAN?

The right time to buy a term insurance plan is as soon as you can. The chances of getting lifestyle diseases increase as you age, and so do insurance costs. When you invest in a term plan at a young age, you get an insurance policy at an affordable premium. This will save a lot of money in the long run. Moreover, it will also provide you and your loved ones with extended coverage and financial security from an early age.

Hence, it may be advised to invest in term life insurance when you are young.

Why Life Insurance?

Financial Stability

Your family gets a complete sum assured at the time of death which makes their financial situation easier.

Secured Future

The cover will ensure a good financial future for your children and spouse who were dependent on you.

Massive Coverage

Life insurance policy offers high coverage at low premiums which are affordable to everyone.

Available Riders

Choose riders for accidental coverage, critical illness, etc for additional benefits.

Low Premium

Life insurance policies secure your family's financial future in a very low premium paid monthly.

Peace Of Mind

When you see a secured future of your family even in your absence, you get complete peace of mind.

Why Through Us?

Accessibility

Our platform is 24x7 accessible as you can get and claim your life insurance from anywhere.

Personalized Services

You can invest in personalized policy, depending on your income, capital and future needs.

Transparency & Safety

Ascertain your risk level and choose through a transparent and safe process of investing.

LIFE INSURANCE POLICIES

There are different insurance policies being issued by Insurance Companies. Following are more popular ones.

We recommend only Term Insurance Policy for our readers for the reasons explained in details separately hereunder. Our view is that Insurance policy should be taken only for the purpose of securing financial protection in the event of an untimely demise of a policy holder. These policies are not a good investment avenue.

1. Term Insurance Policy

Term insurance policy is the simplest form of life insurance and is formally known as a protection plan. Term Insurance policy is one where monetary compensation is paid to the nominee or beneficiary upon the death of the policyholder.

There are a couple of important points to note here:
1. The benefits under term insurance are payable only upon the death of the policyholder – which means if the policyholder survives, then no maturity or survival benefits are payable.
2. The death of the policyholder often covers most situations including sickness and accidents

2. Whole Life Insurance Policy

Whole life insurance policy is for all practical purposes a permanent life insurance policy which extends life insurance coverage until the demise of the policyholder. Upon death of a policy holder nominee is paid the benefits that are listed under this policy.
The phrase “whole life policy” is not a standardized one and there are different applications of this phrase with different insurance companies
For example – Some Insurance Cos use it as an extension of a term insurance plan that simply goes on till the age of 99 or 100 years and nothing else is paid out other than the death benefit.
But then there are some other Insurance Cos. who define a whole life policy as one which not only has death benefits but also come with maturity benefits, survival benefits and even a bonus in some cases

3. Endowment Policies

Endowment policy is one which apart from covering the life of the insured also helps the policyholder save regularly over a period of time. Money saved is then given to the policyholder as a lump sum amount once the policy matures. This type of policy is pitched as a savings plan and is almost always linked to some future event which is generally 10 to 15 years away. For example, a popular pitch made by LIC agents to parents is to start contributing towards an endowment plan for their child’s education or marriage. From a benefits perspective, an endowment policy comes with a life cover which is paid to the nominee upon the death of the policyholder.These plans are quite clearly savings instruments that offer lower than average returns.

4. Money Back Policy

Money-back policies are another popular life insurance category. Let’s understand how money-back policies are constructed by examining the Life Insurance Corporation of India or LIC’s New Money Back Plan. As per the policy terms, a policyholder needs to pay premiums for 15 years so not 20 years but 15 years and there are potentially 4 benefits within the plan:
1. Death benefit that goes up to 125% of the basic sum assured .. and is paid if the policyholder expires anytime within the 20-year policy term .
2. Survival benefit which gets activated at the end of the 5th, 10th, and 15th policy year .. and the policyholder is paid 20% of the basic sum assured.
3. Maturity benefit .. which amounts to 40% of the basic sum assured and is paid out if the policyholder survives the entire 20-year policy term.
4. The bonuses are nothing but the policyholder receiving a share in the profits of the insurance company.

5. Unit Linked Insurance Plans (Ulips)

ULIP or unit-linked insurance policy is an investment product that has insurance built into it.
ULIPs are pitched as a triple benefit product offering investment, insurance, and tax-saving benefits. ULIPs come with charges in many forms like a premium allocation charge, a policy administration charge, switching charges, and a few more expenses