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Term insurance is a life insurance plan offered by an insurance company that provides comprehensive financial coverage against premiums paid for a limited period to the beneficiary of the policy; this coverage, provided under term insurance plan, is paid as death benefit upon the demise of insured during the policy term.
Term Insurance is a purest and most affordable life insurance plan, which provides financial protection to your loved ones in your absence. A term insurance plan provide nominees of the policy with a lump sum amount as death benefit, in the event of the insured's death, during the term of the policy.
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.
Among all the life insurance products, Term life insurance policy offers the highest life coverage for the minimum premiums during the term of the policy. Some Insurance Companies also cover permanent or partial disability wherein the policyholder’s regular income is disrupted.
Note: In case of survival of the life insured the coverage at the earlier rate of premiums is not guaranteed after the expiry of the term insurance policy. The buyer has to either obtain extended coverage with different payment condition or forgo the coverage entirely.
There are various reasons to buy a term plan. However, here are the key and basic reasons that you must buy term insurance:
A term insurance policy is a must for every person and one cannot articulate its importance completely. Term insurance Plan are the only life insurance products that are especially designed to solve a sole purpose of protection. Now that everyone knows, it covers death perils and risks; here are some other core benefits of term insurance Plan in India:
A term insurance also aids in providing safety for the dependents from your fiscal liabilities such as loans or any other debts that you have.
Together with offering life cover, a term insurance plan also offers protection against critical illness. For a tiny add-on premium amount, Critical Illness cover offers lump sum payment when any critical illness such as kidney failure, cancer, or heart attack, etc. is first detected.
One of the most alluring features of term insurance Plan is that the premiums are always the lowest, unlike the other life insurance products. Moreover, the sum assured offered under term Plan is relatively higher when compared to the premium amounts. Regular term insurance Plan, including TROP Plan come with a 105% return on premium benefit when the policy matures.
Term insurance Plan come loaded with tax benefits on the term policy premiums paid. New-age term insurance Plan along with critical illness cover also provide some additional tax benefits on the premiums paid by the policyholder. One can also avail benefits subject to the conditions u/s 10(10D) on the amount that his/her family receives in the case of an untimely demise or unfortunate event.
In some of the term Plan, the insurance provider pays the future premiums in the case of permanent or total disability. Consequently, the policyholder’s life insurance cover continues even if s/he is not able to make payment of the premiums.
So as to amplify the security of the family, a term insurance plan offers add-on pay-out in the case of an accidental or untimely demise.
|Insurers||Term Plan||Claim Settlement Ratio||Max Maturity Age||Premium (for a cover of 1 crore)||Action|
|Aditya Birla Sun Life Insurance||ABSLI LifeShield Plan||97.1%||75 years||Rs. 623/month|
|Aegon Life||iTerm||96.5%||100 years||Rs. 479/month|
|Bajaj Allianz||Life Cover||95%||85 years||Rs. 458/month|
|Canara HSBC OBC Life Insurance||iSelect+ LumpSum||95.2%||99 years||Rs. 480/month|
|EXIDE||Exide Life Smart||97%||55 years||Rs. 926/month|
|Edelweiss Tokio||Zindagi Plus+ Lump sum||97.8%||80 years||Rs. 478/month|
|Future Generali||Future Generali Flexi Online Term-Lumpsum||95.2%||75 years||Rs. 486/month|
|HDFC Life||Life Option||99%||85 years||Rs. 709/month|
|ICICI Prudential||iProtect Smart Lumpsum||98.6%||85 years||Rs. 647/month|
|India First||e-Term Plan||94.2%||65 years||Rs. 422/month|
|Kotak Life||e-Term||97.4%||75 years||Rs. 654/month|
|Max Life||Smart Term Plan Life Cover||98.7%||75 years||Rs. 571/month|
|PNB Metlife||Mera Term Plan-Full Lumpsum payout||97.16%||99 years||Rs. 585/month|
|Reliance Nippon Life Insurance||Reliance Digi-Term||97.71%||65 years||Rs. 500/month|
|SBI Life||eShield||95.03%||80 years||Rs. 589/month|
|Tata Aia||TATA Maha Raksha Supreme Lumpsum||99.1%||85 years||Rs. 927/month|
Disclaimer: “Policybazaar does not endorse, rate or recommend any particular insurer or insurance product offered by an insurer.”
Term insurance offers flexible plan options to suit the need of every individual. You can choose:
Term Insurance Plan are specifically designed to secure your family's basic financial needs in case of death or uncertainty. According to the plan, family/dependents of the life insured is/are eligible for a lump sum amount in case of death or critical illness (if applied for) of the life insured during the tenure of the policy. Let’s take a look at the salient features of the term insurance Plan.
For Example- Let us assume.
|Payment Type||Monthly Premium||Payment Term||Total Premium|
|Regular Pay||Rs.944||44 years X 12||Rs.4. 98 lakh|
|Limited Pay||Rs.2.34 K||10 years X 12||Rs.2.81 Lakh|
There are a number of term insurance Plan available in the market from various insurance companies in India. All of these companies offer both types of online and offline term life insurance with each term policy having its own set of specific features that make it the best term insurance plan in the market. To understand these Plan we need to look at them a bit more in depth.
A standard term insurance plan is one where the insured person gets a cover against various risks against payment of a certain term life insurance premium amount. The most common term plan and generally also considered the best term insurance policy is the one that charges a yearly premium for an annual cover.
A term insurance return of premium policy is a term insurance plan that refunds the premium paid for the cover in case the insured party survives the policy period. These term Plan are increasingly becoming popular as the policyholder gets the money they have invested in the term insurance policy at the end of the policy period.
These term Plan also give the insured the option to add on riders that they feel are essential. These riders add to the premium of such a term plan just like any other standard term insurance policy.
Group term insurance are term insurance Plan that are specially designed for businesses, companies, societies, associations or large families and provide term plan insurance cover for all the members of the group. These policies provide the same set of benefits that an individual term plan offers but the overall coverage is generally more in terms of illnesses or other factors that are generally excluded in the individual policies. Most of these term Plan are offline as each policy is generally customised to suit the needs of the group taking the policy.
The cover and the term life insurance premium increase over the overall tenure of the renewable term insurance plan. This term plan helps to cover against risk from rising inflation costs that may affect the real value of the death benefits that the insured individual's family would receive. The cover under these term Plan rises at a pre-specified rate and keeps increasing until the overall value of the cover is 1.5 times the original cover under the term policy.
The decreasing term insurance Plan are a renewable term plan where the sum assured of the policy decreases every year by a fixed percentage over the tenure of the policy. These Plan are generally offered as mortgage clearing plan. Decreasing term Plan are taken to clear debts and loans. In case of demise of the insured person, the available sum assured amount is paid towards the repayment of the loan. The premium rate of decreasing term Plan is less as compared to the normal term Plan. This term insurance policy provides financial security to the insured’s family and offers the benefit of tax exemption at an affordable premium rate.
A joint term insurance plan works out to be cheaper than buying two individual term insurance Plan. Moreover, the features and benefits remain the same, ensuring both the members get the same advantages of the plan.
These policies are ideal for a couple with children as it will ensure the dependents will not have to worry about their future if the unfortunate comes to pass and both parents pass away. A joint term insurance policy is the best option to go with as it also provides insurance cover for the surviving spouse.
Offline term Plan are those that are sold through traditional methods such as through an agent or a branch, while online term Plan refer to term insurance Plan that are sold over the internet. Term insurance providers offer an online term plan at a significantly discounted rate than the offline plan. The primary reason for this is the lack of any intermediaries such as the agent or the branch between the policyholder and the insurance company for an online term insurance plan.
People could now buy online life insurance at the click of a mouse in a few minutes.Research shows that an online term insurance plan may be cheaper by as much as 40% in some cases than the offline plan that offers the same features and benefits. There are various reasons for the low premium in an online term insurance policy. For instance:
There are quite a few online life insurance Plan that may suit your requirements. A smart way to look at online life insurance Plan is to compare term insurance Plan side by side and pick the term plan that makes sense. Choose your online term insurance plan using our term plan comparison options.
Your hunt for the best online term insurance Plan ends at PolicyBazaar. We go extra miles to serve you with the best term insurance quotes that suit your budget and requirements. Just provide us with the minimum basic details such as name, age, income and here you go. We not only suggest the quotes but also calculate the premiums for you. On the basis of our suggestions, all you need to do is to compare term insurance Plan and opt for the best deal. Do you comparison on the basis of certain parameters like premium offered, claim settlement ratio of the insurer, tenure, coverage etc. This way we help you make an informed decision while suggesting the best available options in a hassle-free manner.
As there is an extensive range of term insurance Plan available in the market, choosing an apt plan can always be a daunting task for insurance buyers. Different insurance providers offer a different type of term insurance plan and each plan varies from another based on various factors.
Thus, in order to choose the best plan as per one’s own requirement and suitability, it is very important to compare term insurance Plan online before zeroing in on one.
While comparing term insurance Plan, it is very important to check the various aspects of policy such as Insurance Coverage, Maturity Age, Claim Settlement Ratio etc.
By comparing the quotes of various term insurance Plan, the policy buyers can choose the plan which fulfils their requirement at an affordable premium rate.
For the better understanding of our readers, here we have shown the term plan comparison chart.
|Plan||Entry Age||Policy Term||Premium Paying Mode||Sum Assured||Incurred Claim ratio|
|LIC e-Term Insurance Plan||Minimum- 18 yearsMaximum- 60 years||10-35 years||Annually||Minimum-Rs.50 lakhMaximum-no upper limit||98.31%|
|Max Life Term Insurance Plan Plus||Minimum- 18 yearsMaximum-60 years||10-40 years||Yearly, half-yearly quarterly, monthly||Minimum-Rs25.lakhMaximum-Rs.100 Cr||97.81%|
|HDFC Click to Protect Plus Term Insurance Plan||Minimum-18 yearsMaximum- 60 years||10-40 years||Yearly, half-yearly quarterly, monthly||Minimum-Rs10 LakhMaximum-No upper limit||97.62%|
|Aegon Religare iTerm Insurance Plan||Minimum-18 yearsMaximum- 65 years||5-62 years||Single, Yearly, half-yearly quarterly, monthly||Minimum-Rs.25 lakhMaximum- NoUpper Limit||97.11%|
|ICICI Pru iProtect Smart||Minimum- 18 yearsMaximum-65 years||5-40 years||Limited, Single, yearly, half-yearly, monthly||Minimum-Subject to minimum premiumMaximum – No upper limit||96.68%|
To select the best term insurance plan, a policyholder should look into the following factors:
Apart from the hassle-free and simple process of purchase, an online term plan offers many other benefits.
Any individual with financial dependents should consider purchasing a online term insurance policy. This includes young professionals, parents, married couples and people who want to gain tax benefit as term insurance plan provides tax benefit under section 80C of Income Tax Act 1961. Hence, any individual who wants to provide life protection to their family at an affordable premium rate along with the benefit of tax exemption should purchase a term insurance policy.
As the simplest form of life insurance product, term insurance is the most affordable insurance plan which offers higher insurance coverage. As the purest insurance product, only death benefit is offered by the term plan. Under the online term insurance plan, the insurance company gets into an agreement with the insurance buyers.
According to this agreement, a lump-sum, sum assured amount is paid to the beneficiary of the term insurance policy as a death benefit in case of the unfortunate demise of the policyholder during the policy tenure. The insurer pays the sum assured amount to the beneficiary as mentioned in the term insurance policy documents.
The sum assured amount is paid on the basis of the type of payout option chosen by the insured at the time of policy purchase. The payouts can be made as a lump-sum payment at one go or as monthly income at specific intervals of time.
The entire sum assured amount is paid at one go to the beneficiary of the term insurance policy.
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.
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 sum assured amount is paid as monthly income from the first month of life insured’s death.
Sum assured= Rs.1 Crore
Payout= Rs. 1 lakh per month (Rs. 12 lakh yearly) for 83 months approximately.
A term plan from Policybazaar helps you in the following way:
The steps to process a claim for a term insurance plan is mentioned below:Term Insurance Claim Process in the Event of Death
The very first step is to file a claim. One can follow any of the below steps to file the claim:
A claim is formally registered and accepted only after receiving a written request for claim settlement with a duly signed and filled claim settlement form with other relevant documents. An individual should file a term claim via phone call or by visiting the nearest branch of the insurance company for the quick claim process.
The process of claim settlement starts when the nominee of the policyholder submits a duly filled and signed claim form with all the supportive and valid claim documents. The list of all the required documents is given below:
As soon as the insurance provider verifies all the required documents and then accepts the claim, the payouts will be made according to the payment options present in the term plan. The payouts are usually given via ECS, for which, the nominee should submit the details of the bank, photocopy of the passbook of bank account, and canceled cheque. Some insurance providers may need these details attested by the concerned bank, so do check the same.
Before purchasing any term plan, it is very important for policy buyers to go through the terms and conditions of the policy and check all the exclusions mentioned in the policy documents. However, term insurance Plan come with only one exclusion i.e.
In case, the life insured (sane or insane) commits suicide within 12 months (1 years) from the date of policy inception or from date of revival of policy, the policy terminates immediately. In such cases, the beneficiary of the term insurance policy receives only the total term life insurance premium amount paid by the insured from the insurance company (inclusive of extra premium, if any, but exclusive of applicable charges and taxes imposed by the government).
Apart from the above, there are other exclusions as well, which come under critical illness rider. If any of these exclusions are found at the underwriting stage of the term insurance policy, then no benefit will be offered. Let’s take a look at the exclusions, which comes under critical illness rider.
Riders are the add-on coverage which can be purchased by the policyholder along with the basic term Plan in order to enhance the coverage of the policy. There are various online term insurance Plan which offer rider as an in-built feature of the policy. Before, zeroing in on an online term plan it is very important to check what are the in-built riders and add-on riders offered under term insurance policy. The rider benefit can be availed by paying an extra premium to the insurer along with the basic premium of the term policy. Some of the riders offered by the term Plan are:
With this term insurance rider benefit, the insurance holder receives a lump-sum amount in case of valid diagnosis of any critical illnesses as pre-specified in the policy. The illnesses which are covered under critical illness cover are heart attack, cancer, paralysis, stroke, kidney failure, coronary artery bypass surgery, major organ transplant, etc.
This is one of the most beneficial rider benefit offered under term insurance policy. Under this rider benefit, in case the life insured fails to pay the future premium of the term policy due to a disability or income loss, then all the future premiums of the term plan are waived off and the policy continues to remain active.
Accidental death benefit rider can be bought in order to enhance the coverage of the term insurance policy. Under this rider benefit, an extra sum assured amount is paid to the beneficiary of the policy along with the basic sum assured amount in case of accidental demise of the insured person. This rider benefit works as a saviour by offering an add-on payment to the family at the time of financial hardship.
This is an add-on rider benefit offered by the term insurance wherein, an extra sum assured amount is paid to the policyholder in case; he/she suffers from an accidental permanent or partial disability which leads to unemployment. Generally, the insurance companies offer 10% or more sum assured amount per year in order to compensate for the regular income that may happen due to total and permanent disability of the policyholder.
This rider offered by term plan is specifically designed to generate income after the demise of the life insured. Under this rider benefit, the insured’s family receives additional income every year for the tenure of 5-10 years, along with the regular sum assured amount.
There are various factors which determine how much term insurance coverage one should take. For the convenience of the insurance buyers, here we have discussed some of the factors.
The term offered by most of the term insurance Plan ranges between 5 to 40 years. One must opt for the term of a policy according to his/her retirement age. Indians generally retire at the age of 60 years. In this way, if a person purchases a term insurance plan at the age of 60 years, then by that age most of his/her liabilities and responsibilities are cleared. However, a policyholder can opt for the life cover till the age of 99 years, if he/she has several dependents and wants to provide financial coverage to them for their entire life span.
The best thing about the online term plan is that the freedom of the policyholder to select the most suitable policy. In addition to this, the online term insurance plan as well bring some additional responsibility on the insured of staying focus and informed for the features of the product. It is only when one matches his/her requirements with the term plan; he/she is eligible to purchase it. Mentioned below are three steps for making the right choice while buying a term policy:
The first step that every term life insurance buyer should consider while purchasing it to find out the amount of coverage as per the requirements of his/her family’s future needs. To find out the same, there are many term insurance calculators available online. One can use one of these calculators and find out how much he/she should invest per month so that the future requirements of his/her family are met when he/she is not around.
If one wants to calculate it manually, then he/she can do the same by following the thumb rule of the term policy calculation. According to this rule, the life or term insurance coverage should be 15 times the annual salary of the policyholder. So, if Mr. A’s annual income is Rs.12 Lakh, then he requires a term insurance of Rs.1.8 Crore. However, the second step is also added in this, wherein one should also find out the required coverage from term life insurance for covering his/her other financial obligations like the higher education of policyholder’s children and other outstanding loans. For example, the sum of these financial obligations on Mr. A is Rs.50Lakh, and then the total coverage from the life or term insurance that he wants is Rs.2.3 Crore.
Term insurance Plan are the purest form of life insurance. Term insurance premiums are lower than other life insurance Plan. However, in order to ensure the right plan, one should go for term insurance comparison. Compare term insurance with other insurance Plan online and stay covered.
A term insurance aspirant as well is suggested to compare term insurance Plan through online term insurance comparing websites. One should compare different term insurance Plan on various features such as duration of the term, maximum coverage provided, etc. It is also suggested to search for the background of the term insurance provider like the claim settlement ratio of the company, the company’s existence in the insurance industry, etc.
Term Plan as well allow purchasing riders for widening the risk coverage for the family of the policyholder. For example, to provide coverage against critical illnesses or accidents, there are riders provided by most of the term insurance providers. One can check for an appropriate rider on an online term insurance provider’s website. The riders are available at an additional cost, but most of the insurers make these available at affordable premiums. Therefore, it is worth to attach a suitable rider in the term insurance plan. In this way, the policyholder will have better risk coverage and he/she can give better protection to his/her family.
Purchasing an online term plan provides its policyholder with a lot of coverage. However, it is the responsibility of the insured to select the most affordable and suitable term insurance plan without missing out on any required detail. This is because a term plan secures the future of the family of the insured.
tenure of the term policy is an important aspect. This is because it involves the term insurance premium amount that one pays for his/her term insurance policy. The longer is this tenure, the greater will be the annual premium of the term plan. However, if one keeps this period very short, then there are chances of being without cover at the time when the family of the policyholder is at utmost need. Therefore, it is essential to consider different necessary factors such as the tenure of the term insurance plan and its coverage.
Term insurance is the simplest form of life insurance product, which financially safeguards the future of the family and takes care of the liabilities in case of an eventuality. Read More
The death benefit is the total sum assured amount paid to the beneficiary of the policy in case of the unfortunate demise of the insured person. Read More
Term insurance riders are add-on benefits offered under the policy, in order to enhance the coverage of the policy.Policyholder can add riders to the plan by paying an extra premium along with the basic premium of the policy. Read More
The claim settlement ratio of an insurance company is the number of claims settled in a year against the number of claims filed. The higher the claim settlement ratio of the company, the more reliable the insurance company is. While purchasing a term insurance plan, it is very important to check the claim settlement ratio of the company. Read More
It is a pure term insurance plan, wherein only death benefit is paid to the beneficiary of the policy in case of the unfortunate demise of the insured person during the tenure of the plan. Read More
The term insurance premium is a specific amount paid by the policyholder to the insurance company in yearly, half-yearly, quarterly or monthly mode. The premium paid by the policyholder determines the term insurance coverage of the policy. The term policy is known to provide higher insurance coverage at an affordable premium rate. Read More
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 risk 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 term insurance cover – up to 25 times. This is because their dependents will take a longer time to be on their toes. To know more click here.
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 term policy and buy another term insurance policy after declaring your current insurance Plan, thus availing benefits of both the Plan. For the term Plan bought offline, one can consider closing them down after analyzing cost difference. Generally online term Plan will be way cheaper with the age factor as well.
Ans: According to current rules and regulations, insurance companies charge high premium from smokers or tobacco users than non-smokers as there is more risk involved in insuring a smoker. Also, a smoker becomes more susceptible to diseases, especially heart related disorders, and therefore, increasing the risk for the insurer. To combat high risk, insurers charge higher term insurance premium rates from smokers. To know more click here.
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.
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.
Ans: Yes, it is always advised to buy individual to buy term plan even if you are covered under a group policy because:
Ans: Term insurance Plan are beneficial if they are bought for the longest duration possible. A term 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 Plan 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.
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.
Ans: No, you can’t avail loan on term insurance Plan because these policies do not have maturity benefits.
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.
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 term insurance policy then the same should be mentioned in the proposal form.
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 term insurance policy.
Few policies also pay additional cover along with sum assured. This increases total life cover for the same sum assured.
Ans: Slightly unrelated, there are a few Plan which have increased income facility in their structure. It means, these term insurance Plan offer the benefit of monthly income increase every year. For example, HDFC Click2Protect Plus Increasing income, Max Life Increasing Monthly Income Plan, etc.
Ans: It is a term during which a policyholder pays premium to the insurance company.
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 life insurance policy then you will be called proposed insured.
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.
Ans: The life insurance company’s decision to insure your life or not relies on the information you provide in the application form. The evaluation of your risk is determined by several factors such as your age, habits, occupation, and medical history. If you have any pre-existing medical condition then the insurer will raise the premium of the term insurance policy. The increase in premium is subject to the actual medical status of the policyholder and risk posed to his life.
Ans: Yes, term insurance Plan cover death due to natural disaster, like flood, earthquake, storm, etc.
Ans: Yes, death due to terrorist attack/war/natural calamities is covered in term insurance policy (unless specifically excluded by insurance company) and claim is settled if documentation is in order.
Ans: Non-smoker refers to a person who does not consume tobacco in any form. Preferred non-smoker is the one who does not have any pre-existing medical conditions at the time of signing the term insurance policy. Below are the situational requirements to fall under this category:
No use of tobacco or nicotine-based products in last 12 months
Cholesterol level not exceeding 280, with or without treatment
Blood pressure not exceeding 152/92, with or without treatment
No cardiovascular or cancer death of more than one parent before age 60
These customers generally fall under non-medical category – depending on their age. Preferred rates are applicable for this category if there is any differentiation by the insurer.
Ans: Yes, you will be entitled to get term insurance cover even if you are a smoker or tobacco user. However, the premium rates will be higher than a non-smoker. Do declare in the proposal form.
Ans: Anyone who has not consumed tobacco product in last 5 years will be considered as a non-smoker. In your case, if you haven’t smoked for last 5 years, you can declare yourself as non-smoker in the proposal form. Usually, the time frame is mentioned in the proposal form.
Ans: Once you have booked your insurance policy under smoker category, it is not possible to do re-assessment for a non-smoker category. Your term insurance policy will continue with the same premium rate.
You can apply for a new one if you wish to. Chances are that the premium will become the same after those 5 years.
Ans: A customer needs to declare his tobacco and alcohol usage at the time of filling the proposal form. Also, the insurer conducts additional nicotine/continue medical test to confirm tobacco usage by a customer.
Ans: If the insured starts smoking & drinking after buying the policy, it will not affect the base cover.
Ans: Yes, every policy has distinct features to meet the specific needs of the insured. The features that your policy holds will vary according to the plan and term of the policy. Hence, it is important that you read the policy document and understand the policy conditions.
Ans: It is very important that you buy a policy directly through the insurance company or an authorized agent. To check whether the agent is authorized to sell life insurance policy or not, you can ask for his authorization card issued by IRDA (Insurance Regulatory and Development Authority). A safer option is to buy online term plan!
Ans: No, it is not possible to change the policy duration after its issuance. However, if you wish to increase the duration of the policy then a good idea is to buy a fresh policy with a longer duration.
Ans: No, premium amount will not change during the policy tenure, provided you continue paying your premiums on time.
Ans: There are various options provided by insurance companies by which you can pay your term insurance premiums. Policyholders can make their insurance premium payment via:
Ans: Yes, money back policy is the insurance plan under which you can get money at regular intervals during the tenure of the policy. It is an anticipated endowment policy with an additional feature of receiving regular benefits during the policy term. Even if the installments are already paid to you in advance, the risk cover continues for the entire sum assured. In case you outlive the policy, the balance sum is paid back to you along with the accumulated bonus.
Ans: For a regular premium paying policy, premium has to be paid within 30 days of due date. It will be 15 days incase selected mode is monthly. The insurance company provides a grace period during which you can pay premium and keep the term insurance policy in force. However, if premium is not paid within the grace period, your policy is considered lapsed. Insurance companies offer different ways to revive lapsed policies. Some of them are mentioned below-
By paying all the arrears of the term along with interest, you can revive your policy. In some situation, the company offers installment revival process. It means, you can pay arrears and interest in installment along with regular premium. The balance revival amount is paid in installments spread over a year.
You can revive your money back policy by using survival benefits (amount received from the insurance company at regular intervals) to pay premium and extra charges. If the survival benefit is lower than the revival value, you have to pay shortfall. If it is higher, you receive excess funds from the company
Ans: While forwarding policy documents to the policyholder, insurance company will inform the insured by issuing a letter that they have 15 days from the date of receipt of documents to review all terms and conditions of the policy. If the insured disagrees with conditions, he has the option to return the policy and the insurance company has to refund the premium paid, subject to deductions. This 15-day period is also called cooling off period. It remains same for all products/policies.
Ans: Yes, if you bought a term insurance policy and later realized that you don’t want it then you can return it and get a refund. You can exercise this option within 15 days of receiving the policy document. Very nominal charges are deducted. For example, stamp duty charges, premium on pro rata basis for the days covered along with medical charges, if applicable.
Ans: Yes, you can change the date of birth after the free look period of the policy. Just submit the proof of age with the correct date of birth, along with a covering letter.
However, if the age changes premium or eligibility, it will involve additional premium payment or cancellation.
Ans: The term insurance company checks the sum at risk, circumstances of the claim, cause, and duration of the policy before asking the claimant to submit the documents. For example, in case of accidental death, company requires police report, post mortem report etc. while in case of death due to illness, the company calls for medical records.
Ans: It generally takes 8 – 10 working days after all the documents, records, necessary forms are submitted, and documentation is completed. In case, the claim warrants further verification, the insurance company keeps the applicant informed of the same.
Ans: You can pay through the agent only if you are sure that he is IRDA authorized and provides you the receipt after your payment of the premium. But it is always better and reliable to pay your premiums directly to the insurance company itself.
Ans: In case there are issues with your medical condition, your term insurance premium will increase. However, there is no fixed percentage of increase in premium. It is completely depended on the insurer’s decision as well as on the policy holder’s actual medical condition. Even you can reject the offer if you do not want the raise in your premium.
Ans: Nomination is the act of authorizing another person the right to receive the policy money in case of death of the policyholder. Nominee is the person who, chosen by the policyholder, will receive the term insurance policy money in case of the policyholder’s death.
Ans: Yes you can change your nominee just by filling up the nomination form and submitting it to the term insurance company anytime before the maturity date of your policy.
Ans: While appointing a nominee you have to provide the details including his/her full name, address, age, and your relationship with your nominee. Make sure that the information you provide are correct to avoid any future complications.
Ans: Nomination means the right of the policyholder to appoint another person who will receive the policy money in case of death or unavailability of the policy holder. On the other hand, Assignment is an act of legally transferring the rights of the policy holder (assignor) to another person (assignee).
Ans: The main benefit of riders/add-ons is that it provides additional insurance coverage on your existing term insurance policy. You can get riders/ add-ons by paying some extra amount on your basic policy premium.
Ans: You have to apply for a duplicate copy of your policy from the insurance company. You will also have to pay the necessary fees and execute the indemnity bond in order to get the duplicate policy.
Ans: In order to change your policy detail you have to submit a written request either online or by visiting the insurance company office in person.
Ans: Yes, you can, but only in case of your term insurance policy renewals. If you were paying your term insurance premium annually (low frequency) you can change your frequency to pay half-yearly or quarterly (high frequency) or vice versa.
Ans: Either visit the Insurance Company office in person or submit the request online. You can also surrender your term insurance policy simply by not paying your term insurance premiums.
Ans: Term insurance premium rates are hugely affected by health conditions. The chances of a healthy person to be hospitalized are very low. In the same manner , a person having some pre-existing condition may have to be hospitalized more than once for which he would have to pay higher premium rates or the disease may also be excluded from the policy coverage.
Ans: Term life insurance is the most basic form of life insurance and is worth your money as a term policy offers death benefit to the family of the deceased in case of sudden demise of the insured. The compensation amount is taxed-free.
Ans: If you outlive your term life insurance, the term insurance policy ends as per the policy due date and no policy benefit will be offered.
Ans: No term insurance plan covers suicidal death, self-inflicted death, death due to sexually transmitted diseases, death due to involvement of criminal activities, death due to involvement of life-threatening activities, consumption of alcohol etc. are not covered.
Ans: The major disadvantages of term insurance are in case the policyholder outlives the policy tenure, no policy benefit is offered.
Ans: If you survive the policy tenure, you won’t get the money back. However, there are some term Plan that offer ‘return of premium’ benefit’, where the policyholder gets the premium amount returned.
Ans: In such a policy, you will get 1 crore insurance coverage as a death benefit.
Ans: If a claim arises during the policy tenure, the insured’s family gets the monetary assistance. If the policyholder survives to the term life insurance policy expiry date, no benefit is offered or the funds are forfeit
Ans: You need life insurance if your family is entirely dependent on you. When you retire you stop earning and thus no family dependency on you. Moreover, if there is sufficient retirement income, you probably don’t need life insurance.
Ans: Life term insurance offers death benefit in case of death due to natural causes and accidental death.
Ans: The only difference between life and term insurance is-
Term insurance only offers death benefit while a life insurance policy comes with dual benefit of death coverage and survival benefit. If the policyholder outlives the policy tenure, survival and maturity benefit are offered under a life insurance policy.
Ans: If we compare traditional life insurance Plan like term insurance and new-age life insurance, you should go for life insurance policy that offers both death and maturity benefit. Certain types of life insurance also offer the dual benefit of insurance and investment under a single policy. However, online term insurance comes with additional benefits such as discount on premium and so on.
Ans: If you are looking for online term insurance policy, you should choose a term plan that at least covers you up to the age of retirement or after a few years after your retirement. However, make sure the term insurance premium will not be a burden on you.
Ans: The major benefit of a limited pay option is you’re free from paying a term insurance premium for a long policy period. If your policy premiums continue beyond retirement, the term insurance premium probably will be a burden on you. Term policy with limited pay option reduces the chances of policy lapse.
Ans: Whole life insurance is better as it covers you for the entire life-span with the death benefit to the family in case of the sudden demise of the insured. However, these policies come at a higher premium than term insurance.
Ans: Solvency ratio defines that how financially strong an insurance provider is. If we consider private firms Sahara Life, DHFL Pramerica, Bajaj Allianz Life, Canara HSBC OBC etc. have a higher solvency ratio in the market. On the other hand, LIC and Future Generali are amongst the lowest solvency ratio. (Data culled from economictimes.com, the year 2017)
Ans: Term insurance premiums depend on various factors such as age, income, coverage and basis on these it is decided at the time of buying insurance. So, there is no fixed premium.
Ans: It entirely depends on the life insurance provider. If the policy offers coverage for cancer, then policy benefits will be provided in case of death due to cancer. If you already own life insurance, you can always have an option to opt for critical illness rider to get coverage for such critical illnesses that could cost a bomb.
Ans: An accidental term insurance policy covers the insured for death due to accident. It can be bought as add-on or rider cover with the basic life insurance cover. A lump sum amount is provided to the family in case of death or disability caused by an accident.
Ans: Yes. This clause is mandatory if the insurance company doesn’t cover you for pre-existing illnesses.
Ans: The below are some of the common health conditions that might affect your life insurance premium:
1. High cholesterol
2. High blood pressure
3. Heart-related diseases