Term Insurance

Term Insurance - FAQs

• 👉What is term insurance?

  Ans: Term insurance is the purest and simplest form of the life insurance policy, which offers comprehensive financial coverage to the family members against any life uncertainty. On the premise of the term insurance plan purchased, the family gets the life cover or the sum assured in case the policyholder passes away untimely while the policy is still active.

• 👉What are the benefits of a term plan?

  Ans: A term insurance plan offers multiple benefits. Some of the key benefits of the term insurance plan are listed below:

  • Cost-effective Premium: An individual can get a high-value life cover from the term plan by paying a cost-effective premium amount. The term insurance premium amount can be made either monthly, half-yearly or yearly. The earlier one buys the term insurance plan; the lower will be the premium amount that needs to be paid.
  • Easy to Understand: When it comes to buying the term plan, one of the prime features is that it is easy to understand. As it is a pure life cover, the term plan does not have the investment component. The individual will pay the premium and the insurance provider covers the life for a fixed period to offer the benefits of term insurance.
  • Additional Rider Benefit Options: The term insurance plans come with different rider benefit options that can be chosen by the policyholder, which will enhance the base plan. These riders can be added to the term insurance plan by simply paying an additional nominal premium.
  • Death Benefit Payout Options: In case the policyholder passes away, the financial liabilities will fall on the family members. It is when the different payout options of the term plan play an important role. The dependents will get the lump sum amount when the policyholder is no more. This lump sum will enable the dependents to manage the financial liabilities. There are term insurance plans that also give the option to receive monthly income along with a lump sum amount as a death benefit. With the monthly income. The family finds it easy to manage the everyday expenses.
  • Tax Benefits: The term insurance plans also offer tax benefits. The term insurance premiums are tax-deductible and the payout comes with tax exemptions as per the prevailing tax laws. Under Section 80C, the premium paid remains tax exempted up to the limit of Rs 1.5 lakh in a year. The death benefit also remains tax exempted under Section 10(10D) of the IT Act.

• 👉Who should buy a term insurance plan?

  Ans: We all know that uncertainty does not come with prior notice. Therefore, it is of utmost importance to secure the financial future of the family. A term insurance plan should be bought by every individual who has financial dependents. The loss of life can never be compensated; however, the term insurance plan enables to tide over the financial necessities of a family. A term insurance plan is important at every stage of life. The earlier an individual buys the term plan; the lower will be the premium. Buy the term insurance plan online at a cost-effective premium.

• 👉What are the minimum and the maximum age to buy a term insurance policy?

  Ans: Anyone who intends to buy the term insurance policy should be between the age group of 18 years to 65 years and should have an income of at least Rs 2 lakh.

• 👉How much risk cover should I buy?

  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 lifestyle 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.

• 👉Is it possible for an NRI to buy a term insurance policy?

  Ans: Today the insurance companies in India do offer term insurance policies, which fulfil the insurance requirements of the NRI.

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

  Ans: Buying term insurance 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 term plan at PolicyBazaar, you make substantial savings because the policy is directly sold to the person without the involvement of the 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 an online market, distribution cost is saved and the benefits of a term plan are 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.

• 👉If my term insurance policy claim is rejected, whom should I contact?

  Ans: Even after submitting all the required documents and adhering to the rules your term insurance policy claim gets rejected you should immediately get in touch with the specific insurance company and seek for help.

• 👉In case if I wish to cancel my term insurance policy, is it possible?

  Ans: Yes, if you wish to cancel the term insurance policy, you may dos o but within the free-look period offered within the plan.

• 👉Can I switch my term plan from one company to another if I get better benefits in another 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 term insurance premium paid towards current plan will lapse without any return and the new policy, which you will buy come at a 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 plans, thus availing the benefits of both the plans. For the term plans bought offline, one can consider closing them down after analysing cost difference. Generally, online term plans will be way cheaper with the age factor as well.

• 👉Is it possible to add a rider in an existing term insurance policy?

  Ans: Yes, if you wish to, you can add an optional rider in your existing term insurance policy by paying a nominal charge.

• 👉If I die in a foreign land, will my term insurance policy be effective?

  Ans: Once you have bought the term insurance policy, it will be effective and taken into consideration irrespective of the geographical location.

• 👉Why term insurance premium rates for a smoker are higher than that of a non-smoker?

  Ans: According to current rules and regulations, insurance companies charge high premium of term plan 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.

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

  Ans: Yes, buying term 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, the chances of getting a policy are higher because of your good health.

• 👉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.

• 👉Should I buy a term plan even if my employer has already covered me under group policy?

  Ans: Yes, it is always advised to buy individually to buy term plan even if you are covered under a group policy because:

• 👉What documents will I need to buy term insurance plans?

  Ans: Here List of documents required

  • Documents you need to buy term plan 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.

• 👉For how long should I buy a term plan?

  Ans: Term insurance plans are beneficial if they are bought for the longest duration possible. A term insurance policy should cover the person until 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 the flexibility of fixing the tenure. For example, a businessman might have planned for extended earning years and therefore, it makes sense to buy an income replacement plan.

• 👉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. 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.

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

  Ans: Yes, a 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.

• 👉What is the sum assured?

  Ans: Sum assured is usually referred to as the amount of insurance in a term plan. 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.

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

  Ans: Slightly unrelated, there are a few plans, which have increased income facility in their structure. It means, these term insurance 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 a premium to the insurance company.

• 👉What is the death benefit?

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

• 👉Who is a proposed insured?

  Ans: A proposed insured is a person whose interests are safeguarded by the 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.

• 👉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.

• 👉How does a life insurance company evaluate my risks?

  Ans: The life insurance company’s decision to insurer 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.

• 👉Do term plans cover death due to natural disaster?

  Ans: Yes, term insurance plans cover death due to natural disaster, like flood, earthquake, storm, etc.

• 👉Does the insurance company cover death due to terrorist attack?

  Ans: Yes, death due to terrorist attack/war/natural calamities is covered in the term insurance policy (unless specifically excluded by the insurance company) and the claim is settled if documentation is in order.

• 👉Who is a preferred non-smoker and how is an individual declared as a preferred non-smoker?

  Ans: Non-smoker refers to a person who does not consume tobacco in any form. A 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 the 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.

• 👉Can I get term insurance cover if I am a smoker or tobacco user?

  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.

• 👉I am an occasional smoker. Do I need to declare myself as a tobacco user?

  Ans: Even if you are an occasional smoker, you need to declare yourself as a tobacco user in the proposal form.

• 👉I used to smoke earlier but now I have quit smoking. Shall I declare myself as a smoker or non-smoker?

  Ans: Anyone who has not consumed tobacco product in the last 5 years will be considered as a non-smoker. In your case, if you haven’t smoked for the last 5 years, you can declare yourself as a non-smoker in the proposal form. Usually, the time frame is mentioned in the proposal form.

• 👉Currently, I am a smoker but if I quit smoking a few years down the line, can I get my re-assessment has done and avail rebate on policy in the middle of the policy term?

  Ans: Once you have booked your term plan 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.

• 👉How do you decide if a customer is a non-smoker at the time of policy issuance?

  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.

• 👉What would happen if I start taking alcohol after the policy issuance?

  Ans: If the insured starts smoking & drinking after buying the policy, it will not affect the base cover.

• 👉What is the policy number?

  Ans: A policy number is a unique identifier that attaches a policy to a specific individual. It is the number by, which the insurer keeps the track record of your term policy details.

• 👉Are policy conditions different for all term insurance plans?

  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, you must read the policy document and understand the policy conditions.

• 👉How do I know if the agent is authorized to sell life insurance policy?

  Ans: You must buy a term policy directly through the insurance company or an authorized agent. To check whether the agent is authorized to sell a 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 an online term plan!

• 👉Can I change the policy duration after the issuance of the policy?

  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.

• 👉Will my premium amount change during the policy tenure?

  Ans: No, the premium amount will not change during the policy tenure, provided you continue paying your term insurance premiums on time.

• 👉What are the different options to pay the premium?

  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: National Electronic Fund Transfer (NEFT) Net Banking Credit card Debit card Electronic Clearing Services (ECS) Direct payment at branch offices

• 👉Is there any policy where I can get the money during the policy tenure?

  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 instalments 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.

• 👉What if my insurance policy has lapsed?

  Ans: For a regular premium paying policy, the premium has to be paid within 30 days of the due date. It will be 15 days in case selected mode is monthly. The insurance company provides a grace period during, which you can pay the premium and keep the term insurance policy in force.

  However, if the 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 term plan.

  In some situation, the company offers instalment revival process. It means you can pay arrears and interest in instalment along with regular premium. The balance revival amount is paid in instalments 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 the premium and extra charges. If the survival benefit is lower than the revival value, you have to pay the shortfall. If it is higher, you receive excess funds from the company.

• 👉What is the income replacement plan?

  Ans: Known as a protection plan, an income replacement plan is a non-linked and non-participating term plan. It gives death benefits in the form of the lump-sum amount and ensures an uninterrupted annual income for a family for a specified number of years in case a policyholder dies within the tenure.

• 👉What is the age eligibility to buy an income replacement plan?

  Ans: Any individual lying in the age bracket of 18-65 years can opt for this plan. Even NRIs are allowed to buy this term plan.

• 👉What is the tenure of receiving money under the income replacement plan?

  Ans: Usually, there is no fixed period of payouts under the term plan and thus, it could vary between 10-20 years.

• 👉What is underwriting?

  Ans: Underwriting is a term used by the insurance companies to evaluate the proposal and assess risks, ensuring that the cost of cover is proportionate to the risks faced by an individual. The evaluation is done based on information submitted by the proposer in the term insurance form along with the reports of medical tests. Usually, insurance companies take 3-4 days for underwriting after receiving all documents like medical certificates, financial and other relevant information.

• 👉What is the free look period?

  Ans: While forwarding policy documents to the policyholder, the 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. These 15 days is also called the cooling-off period. It remains the same for all products/policies.

• 👉Can I get a full refund of premium if I cancel my policy within the free-look period?

  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, the premium on pro-rata basis for the days covered along with medical charges, if applicable.

• 👉Can I change the date of birth after the free look period?

  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.

• 👉What is a claim?

  Ans: A claim is a formal request to an insurance company asking for the payment based on the terms of the policy. It is reviewed by the company and once approved the benefits are paid out to the insured or the beneficiary.

• 👉What parameters are considered by the company while asking the claimant to submit particular records/document?

  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, the company requires a police report, post mortem report etc. while in case of death due to illness, the company calls for medical records.

• 👉Once all the requirements are submitted, how much time does the company take to settle the Claim?

  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.

• 👉What documents are required for claim settlement?

  Ans: Following are the documents required for claim settlement:

  Mandatory documents: In case of death claims the mandatory documents include Original Policy bond

  Copy of death certificate and self-attested by the nominee.

  Copy of photo identity proof

  Copy of residential proof

  Copy of bank passbook of the nominee along with the cancelled cheque.

  Additional documents: In case the policyholder is murdered or killed in an accident, the following documents are required along with the mandatory ones:

  Copy of FIR

  Copy of Post Mortem report In case of non-accidental death of the policyholder,

  The following documents are required along with the mandatory ones:

  1.Copy of medical and legal cause of death

  2.Copy of medical reports

  3.The certificate issued by the attending physician

  4.certificate issued by a family doctor (optional)

• 👉What will happen if death occurs within a year of policy purchase?

  Ans: If death occurs within a year of term insurance policy purchase, the insurance company will do a thorough investigation on the matter to strike out any chance of fraudulency or criminal intent. The nominee will get the entire amount of the assured money and the claim will settle within 180 days of submitting all the relevant and necessary documents of the early death claim to the insurance company.

• 👉Who is entitled to receive claim benefit?

  Ans: The nominee last recorded under the policy is entitled to receive the claim benefits in case of death of the policyholder.

• 👉What will happen if my claim is rejected and my nominees wish to re-apply for it?

  Ans: If your term insurance claim gets rejected your nominee can re-apply for it. For that, he will have to submit a written application to challenge the insurer’s decision of repudiation of your claim. If the nominee is not entertained by the insurance company he can approach the local insurance ombudsman (for claims up to Rs 20 lakh). He can even move to consumer court and claim for above Rs 20 lakh. Both the ombudsman and the consumer court have the power to compel the insurer to reconsider his decision.

• 👉What are the reasons for the rejection of a Term Insurance claim?

  Ans: Here are a few main reasons for, which a term insurance claim may get rejected:

  Lapsed policy: Once your policy has lapsed there is no chance that your claim will be paid any more.

  Avoiding Compulsory medical tests: Some insurance plan asks for some mandatory medical tests. If you avoid those tests your claim may get rejected.

  Mandatory exclusion: Some policies are preconditioned to exclude some particular events or loss. If you ask for coverage on such events your claim may get rejected.

  Inadequate or untrue information: If you have not provided some important information (e.g. some pre-existing condition) in the proposal form, your claim may get rejected. Similarly, if you have provided some false information, your claim will be rejected.

• 👉What is IRDA?

  Ans: Insurance Regulatory Development Authority or IRDA, in short, is the apex body that oversees the insurance industry in India. Apart from protecting the interests of the policyholders, it promotes, regulates and makes sure that the development of the insurance industry in India is in order.

• 👉What are the IRDA guidelines about claim processing?

  Ans: According to IRDA guidelines, the company has to process a claim within 30 days. If the claim needs further verification, it should not take more than 6 months to settle. In case the company fails the whole procedure within 6 months the company will have to pay interest on the claim amount.

• 👉Should I pay my premiums through the agent?

  Ans: You can pay through the agent only if you are sure that he is IRDA authorized and provides you with the receipt after you pay the premium. But it is always better and reliable to pay your premiums directly to the insurance company itself.

• 👉Why should you split your desired sum assured between multiple policies?

  Ans: There are numerous benefits of splitting your money among multiple policies instead of sticking to only one policy. For example, instead of buying a 20/25years long plan, you can buy multiple policies with different maturity dates. This will help you manage your finances better through different stages of your life. Moreover, when you have multiple policies, the rejection of claim from one insurer will not matter most as long as you have other back up policies to file your claim. On the other hand, if you have only one policy and your claim gets rejected, the entire money would be lost. So it is always better to buy multiple policies instead of one.

• 👉How much premium will be raised in case there are issues with my medical condition?

  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.

• 👉What is the nomination?

  Ans: Nomination is the act of authorizing another person the right to receive the policy money in case of death of the policyholder. The nominee is the person who, chosen by the policyholder, will receive the term insurance policy money in case of the policyholder’s death.

• 👉Can I change my nominee?

  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.

• 👉What details am I to provide about the nominees?

  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 is correct to avoid any future complications.

• 👉What is the difference between a nomination and assignment?

  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 policyholder. On the other hand, an Assignment is an act of legally transferring the rights of the policyholder (assignor) to another person (assignee).

• 👉What is the benefit of opting for riders/add-ons?

  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.

• 👉In case I lose my policy document, how do I obtain a duplicate policy?

  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 to get the duplicate policy.

• 👉How can I change my term insurance policy details?

  Ans: To change your policy detail you have to submit a written request either online or by visiting the insurance company office in person.

• 👉Can I change the frequency of payment for my term insurance policy?

  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.

• 👉What do I need to do to surrender my term insurance policy?

  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.

• 👉How does health condition affect premium rates?

  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.

• 👉Is term life insurance worth buying?

  Ans: Term life insurance is the most basic form of life insurance and is worth your money as a term policy offers a death benefit to the family of the deceased in case of the sudden demise of the insured. The compensation amount is taxed-free.

• 👉What happens to term life insurance if you don't die?

  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.

• 👉What kinds of deaths are not covered in term insurance?

  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.

• 👉What are the disadvantages of term insurance?

  Ans: The major disadvantages of term insurance are in case the policyholder outlives the policy tenure, no policy benefit is offered.

• 👉Do I get my money back at the end of term insurance?

  Ans: If you survive the policy tenure, you won’t get the money back. However, some term plans offer ‘return of premium’ benefit’, where the policyholder gets the premium amount returned.

• 👉Can you get cash in term insurance?

  Ans: No

• 👉Do you get life insurance if you are murdered?

  Ans: No

• 👉What is 1 crore term insurance?

  Ans: In such a policy, you will get 1 crore insurance coverage as a death benefit.

• 👉What happens to the money in a term life insurance when it expires?

  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

• 👉Do you need life insurance after 65?

  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.

• 👉Is natural death covered in term insurance?

  Ans: Life term insurance offers death benefit in case of death due to natural causes and accidental death.

• 👉What is the difference between life insurance and term insurance?

  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.

• 👉Should I buy a term plan or a traditional life insurance plan?

  Ans: If we compare traditional life insurance plans like term insurance and new-age life insurance, you should go for a 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 a discount on premium and so on.

• 👉What is the policy term that I should select?

  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.

• 👉Is there any advantage of limited pay option in term insurance?

  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.

• 👉Which is better term insurance or whole life insurance?

  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.

• 👉What is the solvency ratio in term insurance?

  Ans: Solvency ratio defines 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)

• 👉Is term insurance premium fixed?

  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.

• 👉Does life insurance pay if you die of cancer?

  Ans: IIt entirely depends on the life insurance provider. If the policy offers coverage for cancer, then term insurance 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.

• 👉What is the accidental cover in term insurance?

  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.

• 👉Do life insurance companies check your medical records?

  Ans: Yes. This clause is mandatory if the term insurance company doesn’t cover you for pre-existing illnesses.

• 👉What medical conditions affect life insurance?

  Ans: Below is some of the common health conditions that might affect your life insurance premium: 1. High cholesterol 2. High blood pressure 3. Heart-related diseases 4. Obesity 5. Diabetes 6. Cancer

• Life Insurance Company Likely To Hike the Term Insurance Premium

  The term insurance premiums are expected to increase as the insurers have revised the premiums upward. This is going to be the premiums that life insurers would have to pay to re-insure the risk.

  The reinsures increased the premium rates as over the last year the number of claims has been rising. The increase in re-insurers premium rate is because of a rise in the mortality rate amid COVID-19. With an increase in the re-insurer premium rates, the insurers likely would take up the premium of the term insurance policy for the buyers.

  As per previous reports, the term insurance premiums were expected to increase up to 40 per cent in 2021 as the insurers will take into account the risk emerging. The insurance is one pure risk cover that is payable in case of the life assured is no more. Presently, the cover is economically priced given that the prime influencing aspect is the mortality risk expected on the portfolio or simply, the incidence of loss because of death.

• Bharti AXA Life Flexi Term Pro- A Term Plan With Cover-Up to 99 Years

  The Bharti AXA Life Insurance has announced Bharti AXA Life Flexi Term Pro, which is a comprehensive protection solution and offers the alternative to cover life until 99 years of age. The Bharti AXA Life Flexi Term Pro offers a customized shield that has multiple flexibilities that help to financially safeguard the insured and the family.

  This plan also offers a one-year term and an underwriting option of telemedical to individuals that are a prime differentiator in the insurance market domestically. The company has also launched quit smoking as well as fitness benefits for all the customers, which can let them save an additional 5% on the renewal premium subsequently. The customers are likely to get rewarded for a lifestyle that is healthy upon quitting smoking and also improving health status that would lead to reducing the premium within the ‘Stay Fit’ benefits before the second anniversary of the policy and ‘Quit Smoking’ before the third anniversary of the policy.

  The Bharti AXA Life Flexi Term Pro has been designed with multiple options and features as per the needs and preference. The ‘Stay Fit’ benefits and ‘Quit Smoking’ are surely going to be game-changing characteristics and will redefine the protection within the Indian insurance market. The plan is accessible in options namely ‘With Return of Premium’ and the other one being ‘Without Return of Premium’.

  When it comes to the option of return of premium, towards the maturity end, 100% premium is given back to a policyholder. When the life insured survives and the due premiums have been paid until the maturity date the maturity sum assured will be payable without GST. On the other hand, with the variant of without return of premium, the customer has the alternative to avail the benefit of joint-life in the equivalent policy that permits the assured to cover the spouse. When the primary life assured is no more, the spouse life cover will continue.

  The life cover is accessible until 85 years of age; however, there is also an option of the whole life term coverage until 99 years of age. The Bharti AXA Life Flexi Term Pro also offers the option to choose from the premium payment terms, multiple policy terms and also customize the plan. The plan can also be enhanced by opting for the rider benefit options at an additional premium. The Bharti AXA Life Flexi Term Pro customers will be entitled to tax benefits on the paid premiums and the received benefits as per the existing tax laws. This plan will help in penetrating deep and explore any new segments and expand the term insurance market in India.

• Want to Purchase Term Insurance? Buy Now or Pay up to 40% more

  If you are thinking about purchasing a term insurance plan, then you might need to hurry up a bit. Recently, in April 2020 the term insurance policies experienced a price hike. As per the sources, the premium rate of term insurance plans is most likely to experience another significant increase in the coming months.

  Pure protection term plans offered by the prominent insurance providers like ICICI Prudent Life, HDFC Life, Tata AIA and Max Life observed a hike in the premium rates from 20%-35% in April 2020. The insurance companies that already have revised their premium by a certain percentage will further increase the premium rate by the remaining values. Also, the insurance providers who have not yet increased the prices of the term insurance will increase it in the coming months.

  To determine the premium rate of term insurance policy by the reinsurers, it has been assumed that for every 10,000 lives covered by the term plan, only 3 deaths occur in each policy year. While the expected death number is 3 the actual death issued in the policy year per 10,000 policies is between 4-4.5. Moreover, the claim amount offered under a term plan is massive with an average policy sum assured is around Rs.1 crore. In India, the actual Vs expected ratio is more than expected, which leads to a negative experience in mortality. Thus, as demanded by the reinsurers, to improve this situation the term insurance premium will be revised by 40%.

• How Covid-19 has Impacted Term Insurance in India?

  Similar to the other industries, the Covid-19 outbreak has severely impacted the insurance industry including, health, general, and life insurance. According to market experts, the insurance industry will be further impacted more as the crisis intensifies.

  As far as the life insurance industry is concerned, it normally includes insurance products like pure term insurance policies, savings policies, and investment-linked policies. As per the recent report by PWC India, all these categories of life insurance will be impacted on a broad, however, the reasons will be different for each category.

  With the impact of Covid-19, there is an urgency to increase coverage of the term insurance policy. As a result of this, insurance companies are experiencing a boost in demand. However, with people’s cash positioning being unstable, they may be reluctant to take higher coverage. Also, if the buyers will choose higher insurance coverage then they will have to undergo medical tests, which people these days are reluctant to do. Thus, a temporary fall in sales activity is anticipated.

• Aegon Life to Launch 1-Year Term Insurance with COVID-19 Cover

  The popular Aegon Life has recently introduced a term life insurance cover along with a novel coronavirus (COVID-19) cover for the expenses incurred in case of 24 hours continuous hospitalization for a sum of Rs 1 lakh in the initial diagnosis of COVID-19. This can be easily bought by using the application of Flipkart. This term insurance policy will remain active for a year, which implies that the bought term insurance and COVID-19 cover will expire immediately after a year from the date of buying the policy. Moreover, neither survival nor maturity benefit will be payable to anyone when the policy expires as this is a term insurance cover. Anyone who is between the age group of 18 years to 50 years can buy this policy and excluding the senior citizens as well. The idea is to offer financial assistance at pocket-friendly life term insurance premium along with life benefits. In case of demise, a life benefit can be availed via the base plan likewise supporting the family of the policyholder. There are certain exclusions to this policy as well, which can be checked on the website of Aegon Life.

• Term Insurance May Rise in the Coming 03-06 Months

  The premiums for term insurance is expected to increase in the coming months, which means that the complete hike in the term life insurance premiums for 2020 would be 20-40 per cent. According to financial experts, the rise in the premiums is expected in the coming 06 months. In April, some of the prominent life insurance companies had increased up to 20 per cent of the life term insurance premium. The reason for the increase in the life term insurance premium is that the premiums have been revised upwards by the re-insurers. Besides, there has also been a rise in the claim numbers because of, which the re-insurers had to increase the premium rate. There are term insurance companies, which have not yet increased the premium as they are still considering that the hike should be passed on to the buyers of the policy.