Term Life Insurance
Compare 34 plans from 16 insurers & save up to 50%
  • Awarded India's #1 financial website*
  • Over 12,12,535 families secured
  • Free 365 day support
  • 1500+ advisors helping you compare & buy
* By IAMAI in 2013 & 2014


Income Replacement

If you are unable to work due to injury or illness, Income Replacement plans provide a regular monthly payment. Compare and find the best plans at policybazaar.com.

Income Replacement Plans

Income replacement plans are nothing but another name for TERM INSURANCE! Naturally, these are meant to protect your family, dependents, or the loved ones in case of all eventualities especially when you\'re no longer there to see to their well-being. It is ideal for people who,

  • Have others depending on them financially
  • Wish to protect their family from financial consequences after death
  • Have creditors

However, remember that income replacement plans are not for you, if you seek investment-linked plans, looking for whole life protection for your dependents, or intend to decrease the life insurance corpus over a plan term.

Points to Weigh

When choosing a term insurance consider the following,

  • Your term insurance should be such that it is capable of replacing your income in case you\'re no longer there to take care of your dependents. It includes basic family expenditure, financial liabilities as loans, marriage, and education of children.
  • Also, the length of coverage is extremely important when you are thinking of term insurance as a part of income replacement plans. What is ideal tenure of coverage? It should cover you until you are ready to retire. So, try to go for a plan that offers flexibility of coverage.
  • Don\'t forget to take into account the crucial factor, inflation. Today, insurers are offering term insurance with an increasing cover at the rate of 5% to 10% annually. Some assured increases automatically as the time passes and it balances inflation successfully.

When you are thinking of term insurance, specifically as an income replacement plan, opting for those that offer RETURN OF PREMIUM makes sense. These are also known as TROP Plans. It will adequately replace your income while offering premium refund upon maturity.

Term Plan Benefits

Benefits of TROP include,

  • Cost-Effective Plans
  • Low Premiums
  • Financial Security
  • Low Risk Involved

To optimize the profits from term insurance plans, you should assess your present situation, such as, existing financial liability, covered levels, health state, and required protection.

Important Features

  • Premiums are decided as per the age of the person because it determines the risk factor involved. So the sooner you go for it lower the premiums and larger the cover.
  • Policy terms for such plans are generally between 15 years to 20 years. However, those who want may opt to increase it until 65 years to 70 years.
  • Premium amounts remain uniform throughout your policy term except in case of broken contract.
  • If you are expecting high returns than term insurance may no longer be cost-effective.

With many insurance companies offering Term Insurance, make informative decisions with us. Feel free to contact us, toll–free 1800-103-3999 or write to us at enquiry@policybazaar.com

Best Financial Calculators:

What is life insurance?

Ans:

Life insurance is a contract between the insurance company and the policyholder. In return for a premium, insurance company agrees to pay a particular amount to the policyholder or his/her beneficiary on the happening of certain events like death of the insured, critical illness and personal disability.

What is term insurance?

Ans:

Known as a pure life cover, term insurance is the cheapest and simplest form of insurance. It is a pure risk cover and is determined by the sum assured. On the demise of policyholder, this pre determined amount is paid to the nominee.

Which are the traditional life Insurance instruments available?

Ans:

Traditional Insurance products consist of Term Insurance, Term with Return of premium, Endowment, and Whole Life Policies. The cash value increases every year as you pay the premiums under these policies. Some traditional life insurance policies are participating, that means they offer bonus and dividend to their customers.

Why should you buy term insurance?

Ans:

The need to buy term insurance varies from one individual to other, but the most common benefits which influence a person decision to buy a term insurance are as follows-

Secure your family- If you are the sole earner of your life, buying term insurance is indispensable for you. Term insurance offers monetary assistance to your family after your death. It means there would be no monetary burden on your family and they could carry on their normal lifestyle even if you are not around.

Safeguard against liabilities- In today’s time, we take a lot of liabilities to buy our home, new car and for meeting other expenses. Many of these liabilities are usually paid over a period of time (loans repayments). However, if something happens to you, responsibility of repaying liabilities falls directly on your family. A term insurance helps your dependents to manage your financial obligations.

Cost-effective- Term insurance plan is cheap. For instance, a risk cover of Rs 30 lakh for a male age 30 years can be as low as Rs 3000/year.

Tax benefits- Term insurance is a great tax saving instrument. By investing in plan, you will get deduction under Section 80C & 10(10D) of the Income Tax Act, 1956.  

Additional protection options: Many term insurance plans comes with additional cover options in the form of riders such as Critical Illness, Accidental death or disability, Hospital cash etc. It’s easy to appreciate the need of these benefits with our current lifestyle habits.

How much risk cover should I bought?

Ans:

How much risk cover you should buy primarily depends on your annual income. The general thumb rule says that risk cover should be 10 - 15 times of your annual income. It means if you are earning Rs 4 lakh/annum then you should buy a term cover of at least Rs 40 lakh. The idea is to arrange for self sustainability of dependents so that life style can be maintained and future needs could be settled after the demise of a policyholder.

This also depends on the age. Younger age people should and can buy higher cover – up to 25 times. This is because their dependents will take a longer time to be on their toes.

Should I buy a life insurance policy even if my employer has already covered me under group policy?

Ans:

Yes, it is always advised to buy individual life insurance policy even if you are covered under a group policy because:

The amount of insurance you are covered for in the group policy may not be enough.

If you leave your job, you may no longer be covered under the group policy.

If you employer decides on cost-cutting then you run the risk of losing on the benefits of the insurance coverage.

As you age, the premiums are much higher & so is risk. If you decide to buy it later, you will end up paying higher amount. Insurance companies take extra precautions as well.

What documents will I need to buy term insurance plans?

Ans:

       Documents you need are:

Age proof (Voter’s ID card, Passport, Driving license, etc.)

Address proof (Voter’s ID card, Passport, Utility bills, etc.)

Photo identity proof (Passport, Voter’s ID card, PAN card, Driving license, etc.)

Recent passport size photographs

Income proof (Salary slip, Form 16, ITR etc.)

Some insurance companies might need specific documents apart from these.

What are the benefits of buying term insurance online at PolicyBazaar?

Ans:

Buying online at PolicyBazaar is always advised. You can find a most effective plan by comparing all available options on a click of the mouse. When you buy insurance at PolicyBazaar, you make substantial savings because policy is directly sold to the person without the involvement of agent. 

You can also upload all documents online and submit them to the insurer. There are various insurance policies which can only be bought online like SBI eShield, HDFC Click2Protect, ICICI Prudential iProtect etc. When a company specifically designs a product for online market, distribution cost is saved and the benefit is transferred to the policyholder. It is a general observation that the claim experience has been better for online customers. 

Moreover, you can even compare different insurance policies online to see which plan suits you most. By entering basic details like name, age and type of policy intending to buy, you can get free insurance quotes on a click of the mouse. 

What are the tax benefits on life insurance?

Ans:

Life insurance is one of the most preferred investment avenues in India as it helps in tax planning. Following are the tax benefits one can avail by taking life insurance:

Premiums paid for all life insurance policies are exempt from tax up to a maximum of Rs 1.5 lakhs under Section 80C of the Income Tax Act, 1961.

The life insurance proceeds are not taxable for the deceased’s family under section 10 (10D).

What are the maturity benefits of term plans?

Ans:

There is no maturity benefit attached with the term plans. Term plans will pay your beneficiary only in case of insured’s death. However, if you survive the term, nothing will be paid. 

Term with Return of Premium option has maturity amount attached. Generally it pays back the premium on survival till end of policy term. Few plans add a certain percentage of interest on the premium. These plans are however costly.

What are the riders available in a life insurance policy?

Ans:

Bought by the policyholder, riders are supplementary benefits added in the life insurance policy. However, you need to shell out extra money to get life insurance riders. Like insurance policies, premium paid on riders also give you tax benefits as per prevailing tax laws.

 

Various options of life insurance riders available in the market are-

Rider Options

Coverage

Term rider

Additional life cover at a lower cost

Accidental death benefit and partial/total disability benefit rider

Pays in case of death or disability due to accident. On disability, a certain defined percentage is paid out.

Waiver of premium benefit rider

Future premiums are waived off on certain conditions. Most common being – Disability due to accident or illness etc.

Critical illness benefit rider

Pays a sum on occurrence of listed/ specified critical illnesses

Hospital cash benefit rider

Pays daily cash in case of hospitalization.

Income benefit rider

Pays monthly/ yearly income to nominee/family on death of policyholder

Women specific rider

Generally covers for critical illnesses specific to women.

For how long should I buy term plan?

Ans:

Term insurance plans are beneficial if they are bought for the longest duration possible. An insurance policy should cover the person till the age he intends to work. Also, late marriages and children at a high age mean responsibilities do not end at 60 years, which was earlier considered as a retirement age. Our financial experts at PolicyBazaar believe that a person needs coverage at least till 65 years, though it may vary as per circumstances. You should go for plans that offer you flexibility of fixing the tenure. For example, a businessman might have planned for extended earning years and therefore, it makes sense to buy income replacement plan.

When will my life insurance coverage start?

Ans:

Your life insurance coverage will start only after the acceptance of your proposal form. Insurer will send a written confirmation regarding this. Policy kit is also sent across by the insurer.

Can I avail loan on term insurance plans?

Ans:

No, you can’t avail loan on term insurance plans because these policies do not have maturity benefits.

How can I change my communication address?

Ans:

You can get the changes done by visiting the branch office of your insurance company. A written communication is required. This can also be done via registered email id in case branch is not easily accessible. Few insurers allow the change through the customer portal. 

Can I switch my term plan from one company to another if I get better benefits under other plan?

Ans:

Term insurance portability is not yet available and hence one cannot switch from one insurance company to another but you can surrender your policy and buy a new plan with desired benefits. However, surrendering a term policy is not recommended because that will cost you a lot as the entire premium paid towards current plan will lapse without any return and the new policy which you will buy come at high cost since your age has increased.

In such a case, it is advised to continue with your current policy and buy another policy after declaring your current insurance plans, thus availing benefits of both the plans. For the plans bought offline, one can consider closing them down after analyzing cost difference. Generally online plans will be way cheaper with the age factor as well.

Will the term plan cover me if I am travelling abroad for business/leisure purpose?

Ans:

Yes, term plan covers an insured even if he/she travels abroad for business/leisure purpose. However, if any such trip is scheduled at the time of buying the policy then the same should be mentioned in the proposal form.

What is sum assured?

Ans:

Sum assured is usually referred to as the amount of insurance in a policy. It is the amount that would be paid to the nominee in case of death of the policyholder. Sum assured plays a major role in deciding premium rates of a policy. 

Few policies also pay additional cover along with sum assured. This increases total life cover for the same sum assured.

 

Can I increase or decrease value of sum assured in future?

Ans:

Once a term plan has been bought, you cannot.

Slightly unrelated, there are a few plans which have increased income facility in their structure. It means, these plans offer the benefit of monthly income increase every year. For example, HDFC Click2Protect Plus Increasing income, Max Life Increasing Monthly Income Plan, etc.

What is a premium paying term?

Ans:

It is a term during which a policyholder pays premium to the insurance company.

What is death benefit?

Ans:

The amount received by nominees at the time of death of a policyholder is called death benefit.

Who is a proposed insured?

Ans:

A proposed insured is a person whose interests are safeguarded by insurance company. For instance, if you are an individual whose life is going to be covered under the insurance policy then you will be called proposed insured. 

Is a pregnant lady covered in life insurance policy?

Ans:

A pregnant lady is not covered if claims fall under exclusions of pregnancy clause imposed by the insurer at the time of issuing the policy. Also it will not be covered if non-disclosures are found with regard to pregnancy related questions (history of miscarriage, abortion, ectopic pregnancy) at the time of proposal. 

If a pregnant lady wishes to cover under life policy, insurer can ask her to apply for it 3 months after delivery. However, this clause is not applicable if a pregnant lady is already covered under a plan.

What if I become an NRI after purchasing term insurance plan?

Ans:

Your term insurance plan coverage will remain active even if you become an NRI post policy issuance.  It is good to keep the insurer informed about the change in status though.

Are there any benefits of buying insurance at an early age?

Ans:

Yes, buying insurance at an early stage would entitle you to a lower premium on the policy. The earlier you buy an insurance policy; the lower will be your premium amount.  Also, chances of getting a policy are higher because of your good health.

Articles
Average Rating / 5 ( reviews)
view more
Expert Speak

How much to pay for insurance

As an adult, what would you say are the major concerns that need protection in your life? i’d rate death, disability, critical illness, general health and well-being, old age and saving for children as the top points of anxiety for all. while we can’t prevent time and fate, what we can do is create a financial cushion to protect us and our loved ones. insurance does this and allows us to do th... [Read more]

Term Insurance Video

What our clients say

Our partners
  • aegonlife
  • apollo
  • Aviva
  • Bajaj
  • baxa
  • cigna
  • edelweisstokio
  • exidelife
  • HDFC-ERGO
  • hdfcstandard
  • indiafirst
  • idbi
  • iffco
  • indiafirst
  • Kotak
  • liberty
  • lic
  • L&T
  • metlife
  • Max-Bupa
  • maxlife
  • Reliance
  • religare
  • royal
  • sahara
  • sbilife
  • star-health
  • Future Generali
Policybazaar Insurance Web Aggregator Private Limited, Registered Office no. - Plot No.119, Sector - 44, Gurgaon, Haryana - 122001
IRDAI Web aggregator License No. 06 License Code No. IRDAI/WBA21/15 Valid till 13/07/2018 Insurance is the subject matter of solicitation. Visitors are hereby informed that their information submitted on the website may be shared with insurers. Product information is authentic and solely based on the information received from the Insurer © Copyright 2008-2017 policybazaar.com. All Rights Reserved.
1
Subscribe to notifications