- What is Term Insurance?
- Why Should You Buy Term Life Insurance?
- Who Should Buy Term Insurance Plans?
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- What Is Term Insurance?
- What Are The Best Term Insurance Plans In India?
- Common Customer Queries Resolved
- Why Should You Buy Term Insurance
- Who Should Buy Term Insurance Plans?
- Can NRIs Buy Term Insurance In India?
- How Does A Term Insurance Plan Work?
- What are the Different Types of Term Insurance Policies and their Benefits?
- How to Buy Term Life Insurance from Policybazaar?
- What is a Term Insurance Rider and type?
- Why compare Term Insurance Plans online?
- Choosing the Best Term Insurance Plan with the Right Sum Assured Option
- What is the Importance of Term Insurance During COVID-19?
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Term Insurance
Term Insurance is a type of life insurance policy that provides coverage for a specific number of years, i.e., a term. This type of life insurance offers a death benefit to the beneficiary or nominee in case of the insured’s death during the policy term.Read more
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Term insurance is a type of life insurance plan that provides financial coverage to the policyholder’s family for a fixed time or years, called the ‘term’ of a policy. This type of life insurance offers a death benefit to the nominee in case of the death of the insured during the policy term. A term insurance plan provides high life cover at low premium rates.
For e.g., A 30-year-old healthy, non-smoker male can buy a term cover of Rs. 1 Crore for his family for the next 20 years. If he buys a term plan, he must pay only Rs. 725/month. With this 1 crore cover, he can ensure that their family will be able to maintain their current lifestyle without any hassle in case of his untimely death.
Note: The premium differs based on the type of premium payment option opted by the policy buyer.
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What is Term Insurance?
How Term Insurance Works?
Let us understand how the term insurance works with the help of Example.
- Meet Sameer
Sameer, a Healthy and non Smoking male.
- Bought Policy
Sameer bought a ₹1 crore Term Insurance for a 25 yrs policy term to secure his wife financially.
- Unfortunate Death
In the 9th Policy year, Sameer suffered an unfortunate death.
- Claim
His wife received a ₹1 Crore death benefit from the insurer.
- After Claim
His wife can use the benefit & maintain her current quality of life.
What are the Best Term Insurance Plans in India?
Get term life insurance plans starting at Rs.17 per day. Compare and buy the best term insurance plan in India online from the top 15+ insurance companies at PolicyBazaar. Here is a list of the best term insurance plans in India 2023 that you can compare based on factors like premium rates, payout options, and coverage offered.
| Insurance Company | Term Insurance plans | Entry Age | Max Maturity Age | |
| ICICI Prudential Life Insurance | iProtect Smart | 18-65 years | 99 years | |
| HDFC Life Insurance | Click 2 Protect Super | 18-65 years | 85 years | |
| Max Life Insurance | Smart Secure Plus | 18-60 years | 85 years | |
| Tata AIA Life Insurance | Tata AIA SRS Vitality Protect | 18-60 years | 85 years | |
| Bajaj Allianz Life Insurance | eTouch Plan | 18-55 years | 99 years | |
| PNB Metlife Life Insurance | Mera Term Plan Plus | 18-50 years | 80 years | |
| Canara HSBC Life Insurance | Young Term Plan - Life Secure | 18-45 years | 99 years | |
| Kotak Life Insurance | Kotak e-Term | 18-65 years | 85 years | |
| Edelweiss Tokio Life Insurance | Zindagi Protect | 18-65 years | 100 years | |
| Aegon Life Insurance | iTerm Prime | 18-65 years | 70 years | |
| Aditya Birla Sun Life Insurance | ABSLI DigiShield Plan | 18-60 years | 85 years | |
| SBI Life Insurance | SBI eShield Next | 18-65 years | 100 years |
Common Customer Queries Resolved
What is term life insurance?
Term life insurance provides financial protection to your family and replaces your income in case you are not around. You pay a small fee every month/year to protect your family, and in case something happens to you, the insurance company pays a large sum of money (life cover) to your family. It costs as little as Rs 525/Month to buy a 1 crore life cover.
What are the key features of term plan?
"Life Cover: Amount that the family receives on the demise of the policyholder (should be 10 times your annual income).
Cover till age: The age till which the term plan protects your family (generally opted till 70).
Payment Frequency: Premiums can be paid monthly or annually. Annual premiums have a 10% discount.
How do I decide the amount of Life Cover (sum assured)?
Life cover or sum assured is to take care of your family's expenses in your absence. Expenses include household expenses, which will increase with time due to inflation and any existing loans.
The thumb rule is to take a cover of 10 times your annual income. Why? Let me explain with an example:
Annual Income = 10L
Monthly expense = 35,000/month i.e. 4.2L/year
Loan = 20L
As per trends, your expenses double in 10 years due to inflation. Net expenses for the next 20 years would be 1.3 Cr. Adding 20L to pay off your loan, your family would need approx 1.5 Cr as your Life cover
What should be the Duration of your Term Insurance (Policy Duration)?
Term insurance should cover you until your financial responsibilities are over. 1. Do you want cover till you retire? (since your financial obligations will be over). We recommend 65 in this case. 2. Do you want to leave a legacy amount for your family? We recommend 75 in this case as life expectancy is 70 in India
How do you wish to pay? (pay for limited years, pay till policy term)
You can choose the number of years you wish to pay premiums till the age of 60 or the entire policy term, i.e., regular pay, or in 5/10/15 years, i.e., limited pay. Choosing Limited Pay has an added benefit. You can save up to 54% on your overall Premium if you select limited pay for your Term Plan. *58% of the customers select a payment term of 10 years.*
How will policybazaar help my family in getting the claim?
Policybazaar provides a dedicated claim handler who can also come to your doorstep in 85+ cities. Our claim handler will get in touch and assist for free. He/she would be the one point of contact for all claim queries work with your nominee on documentation, and coordinate with your insurer. We would actively provide status updates, and your nominee would have no hassle of multiple follow-ups.
What are the different riders (add-ons) available? Why should you choose them?
Commonly used riders and reasons to add them:
Waiver of Premium on critical illness/ disability - In case of permanent disability due to an accident or any critical illness, no future premiums have to be paid, and the life cover stays intact. This is available as a free add-on in most of the plans and is otherwise available at a minimal amount. Highly recommended to add this to your Term insurance plan.
Accidental Death Benefit - In case the death happens due to an accident, an additional payout (amounting to the value of the base Sum assured) will be given over and above the base sum assured at a very nominal price. This is highly recommended to people who travel a lot or ride a two-wheeler frequently.
Critical Illness Benefit - On diagnosis of any critical illness (listed by the Insurer), you will get a lump sum payout (as decided while buying this rider) immediately. Once the benefit for critical illness benefit has been paid out, the life cover minus the critical illness cover continues with a reduced premium. This might not sound very useful when you're young, but the relevance of this rider increases with your age.
Early Pay out on Terminal Illness - Get 100% payout in case you are diagnosed with any terminal illness (as listed by the Insurer). Some Insurers may give a proportion of the sum assured as well. This is available as a free rider in most of the top plans we have.
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Why Should You Buy Term Insurance Plan?
Term insurance plan is like a safety net for your family's future. It's an affordable and easy way to ensure they are financially secure if something unfortunate happens to you. Here is why buying term life insurance is important:
Financial Protection for the Family
As the sole breadwinner of your family, it falls on your shoulders to look after the well-being of your spouse, parents, and children. Buying a term life insurance is important to make sure that you fulfill your responsibilities to your loved ones, even in your absence.
Long Term Coverage
You can choose long-term coverage till 99/100 years to leave a legacy for your loved ones at a premium you can afford. This long-term cover benefit is one of the important factors that you need to check when looking for the best term insurance plan.
1 crore term plan @525/month
Term life insurance plan is the most budget-friendly type of life insurance and offers a large amount of life coverage at an affordable premium rate. This life cover can help take care of financial obligations and liabilities.
Protection from Critical Illnesses
Various term plans provide critical illness coverage to help you get good treatment for life-threatening diseases/ailments without worrying about hospital bills. You can easily avail of critical illness cover for diseases mentioned under the plan by buying a critical illness rider with a term plan.
Coverage against Disability
Accidents can occur anytime, anywhere, and may lead to permanent or temporary disability. Disability coverage with a term policy will provide financial support to your family in case of accidental disability. This can be availed by paying additional premiums.
Survival Benefits
A regular term policy does not provide any survival benefits if you outlive the policy term. However, a TROP (term plan with return of premium) plan provides you with a lump-sum payment after the policy ends to help you achieve varied financial objectives. The returned amount is almost equivalent to the total amount of premium paid.
Multiple Premium Payment Options
Term insurance plans offer you the flexibility to choose the premium payment term. You can either choose regular payment through the policy term or the limited pay option.
Tax Benefits
A term insurance plan offers tax savings benefits up to Rs. 1.5 Lacs on the premium amount paid under section 80C of the Income Tax Act, 1961. The death benefit paid under this plan is exempted from taxes under section 10(10D).
Who Should Buy Term Insurance Plans?
Anyone who has financial dependents should buy term plans as they offer financial protection at affordable premiums. These can include parents, married couples, self-employed or businessmen, new parents, or taxpayers. Let us take a look at how each type of individual would benefit from buying a term life insurance plan.
| Types of Individuals | Term Insurance Benefits |
| Young Professionals |
|
| Newly Married |
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| Working Women |
|
| Housewife |
|
| Taxpayers |
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| Parents |
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| Retirees |
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| Senior Citizens |
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| Self-Employed People |
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| Non-resident Indians (NRIs) |
|
What are Term Insurance Policy Features?
Term life insurance is one of the preferred types of life insurance because of its affordable premiums, low entry age, and easy-to-buy features. Long-term protection, the flexibility of choosing policy and premium payment terms, customisable cover, and liability protection are some other benefits of term insurance plans.
How Does a Term Insurance Plan Work?
What are the Different Types of Term Insurance Policies and Their Benefits?
When looking for the best term policy, you should thoroughly assess the available plans to find what best suits your needs and requirements. You can assess the different types of term policy available and select the right type of plan yourself. Here is a list of best term plans offered by various insurers, along with their benefits:
| Type of Term Plan | Benefits |
| Basic Term Plan | Death benefit is offered in a lump sum amount at low premium rates |
| Term Insurance with Return of Premium (TROP) | Financial protection to your financial dependents at low premium rates in case of your death You are eligible to receive a return of all the premium amounts paid in case of outliving the policy term. |
| 100% Refund of Premium at No Cost term insurance | This term insurance plan variant allows you to exit at a specific stage and receive all the premiums paid at the end of the policy |
| Term insurance for Housewife | You can purchase term policy using your husband’s annual income for the additional financial security of your family |
| Term Insurance for Self-employed and Business Owners | People with unsteady flow on income can secure their family against business loans and liabilities in their absence |
| Term Insurance for NRI | NRIs can buy term insurance plan in India via tele/video medicals and get GST waiver of 18% with additional 5% discount on annual premium payment mode |
| Coronavirus Term Insurance | Secure your family in case of an eventuality caused due to COVID-19 with coronavirus term insurance plan |
| Term Insurance for Diabetics | Now, you can buy term insurance plan even if you have pre-diabetic or have type 2 diabetes at affordable premium rates |
| Saral Jeevan Bima | People with low income and educational qualifications can buy SJB plan to financially secure their loved ones, irrespective of their educational, resident background and occupation. |
How to Choose the Right Term Insurance Plans?
Choosing the right term insurance plan involves comparing multiple plans until you find the ideal one. Here are some steps that can help you assess and choose the right term plan:
How Long Should Your Term Insurance Policy Period Be?
Your term policy period depends on your needs. Most insurers offer a policy term ranging from 5 to 40 years, allowing you to choose a tenure per your specific needs. You can also opt for whole life (till 99 or 100 years of age) coverage through which you can financially secure your dependents for your whole life.
When is the Right Time to Buy Term Insurance?
The right time to buy a term plan is as early as possible. This is because the premiums increasing age and changing health conditions. Thus, as you grow older, your health conditions may deteriorate, ultimately increasing your premiums. Buying an online term plan allows you to secure your family at affordable premiums with a large life cover for a long tenure.
How much Term Insurance Cover do you need?
Before buying term insurance, it is essential to determine the right life cover for your profile. You can use a human life value calculator to estimate the sum assured you are eligible to buy. An HLV calculator uses your current annual income, age, and cover of existing life insurance to provide you with the right term insurance cover amount.
What Are The Different Types Of Term Insurance Payout Options?
Term insurance payout works by providing the sum assured to the nominee in the event of the policyholder's death during the policy term. The nominee can choose from among the 4 payout options to receive the amount:
- Lump Sum Payment: Single payment of the full amount
- Monthly Income: Regular and equal monthly payments
- Lump Sum + Monthly: Partly lump sum, rest monthly income
- Increasing Monthly: Monthly payments with a yearly increase
What are the Factors That Can Affect Term Insurance Premiums?
Several factors can affect how much you pay for a term insurance plan. These include your age, gender, family medical history, current health conditions, and lifestyle. Here's a list elaborating on these factors:
- Age: Younger people usually pay less because they're less likely to get sick.
- Gender: Women tend to pay lower premiums because they live longer.
- Health: Your past and current health and your family's health can impact the cost. The premiums may be higher if you or your family have had serious illnesses.
- Lifestyle habits: Smoking, drinking, or risky activities can lead to higher premiums because they increase health risks.
- Occupation: If your job is risky, you might pay more because it can affect your health.
- Policy Duration: How long you want the insurance and how much coverage you need can also change the cost.
- Lifestyle: If you do risky sports like mountain climbing, your premiums might increase due to the added danger.
What is a Term Insurance Rider?
A term life insurance rider is an additional benefit or add-on cover that increases the coverage of the base term plan.
What are the types of Term Life Insurance Riders?
Let us take a look at some of the important term riders that you can add to your base term insurance plan:
Accidental Death Rider
This term rider provides the rider sum assured in addition to the base sum assured, to the nominee of the term life insurance policy in case the policyholder suffers an unfortunate death due to an accident within the policy tenure.
Hospicare Benefit Rider
Under this term rider, the life assured receives a fixed amount for every day spent at the hospital. If the policyholder is admitted to the general ward or the ICU of the hospital, the insurer pays a fixed percentage of the sum assured.
We help to choose best insurance based on your need
Benefits of Buying Term Insurance Online
There are multiple benefits of buying term insurance online. Let’s understand them:
- Easy Comparison: Compare from among multiple insurers to buy your ideal term plan.
- Quick & Easy: Buy a term plan online and receive confirmation & documents instantly.
- Customer Convenience: Buy a term plan from the comfort of your home without visiting insurer branches and offices.
- Easy Premium Payment & Renewal: Save time by paying your premiums & renewing your policy online.
Reasons to Buy Term Insurance Online
Buying term insurance online is advantageous for several reasons. Firstly, because you are free from agents’ participation, and that results in saving the commission that you eventually pay them. Moreover, you can compare different insurers before eventually buying a term plan and receive all the details instantly.
Documents Required To Buy Term Insurance Plan
| Types of Documents | Description of Documents |
| Identity Proof | Passport, Voter ID, Adhaar Card, PAN Card |
| Income Proof | For Salaried Individuals
|
| Address Proof | Electricity, telephone, gas, or water bills not more than 2 months old, property tax receipt |
| Medical Proof | Latest medical reports allocated by the insurer |
Eligibility Criteria To Buy Term Insurance Plan
Eligibility criteria helps you understand the conditions you need to satisfy to buy term insurance plan in India. Here is the list of eligibility conditions you need to keep in mind before buying term insurance plan:
| Parameters | Eligibility Criteria |
| Entry Age | 18 years - 65 years |
| Policy Tenure | 5 years (may vary with insurer) - No limit for the term plan (may vary with insurer) |
| Premium Payment Terms |
|
| Premium Payment Modes |
|
| Payout Options |
|
| Add-ons or Rider |
|
How Does Term Insurance Plan Secure a Family's Future?
Term policy ensures the financial security of your family by providing death benefits in the event of your unfortunate death. This payout helps cover living expenses and debts and ensures your family's financial stability. It is a safety net during tough times, ensuring to meet their essential needs even when you are no longer there.
Why Compare Term Insurance Plans Online?
By comparing term insurance plans in India 2023, you can select the most suitable plan for your profile and ensure the financial security of your loved ones at affordable premiums. This way, you can select the right term plan from the insurer that offers the most benefits.
| Term Policy | Entry Age | Maximum Maturity Age | Policy Term | Sum Assured |
| Max Life Smart Secure Plus | 18 - 60 years | 85 years | 10 - 67 years | 25 Lacs - 10 Crore |
| Bajaj Allianz e-Touch | 18 - 55 years | 99 years | 10 - 81 years | 50 Lacs - 10 Crores |
| Tata AIA Sampoorna Raksha Supreme | 18 - 60 years | 100 years | 10 - 67 years | 50 Lacs - 20 Crores |
| ICICI Pru iProtect Smart | 18 - 65 years | 99 years | 5 - 69 years | 50 Lacs - 20 Crores |
| HDFC Life Click 2 Protect Super | 18 - 65 years | 85 years | 5 - (85 - entry age) years | 50 Lacs - 20 Crores |
Choosing the Best Term Insurance Plan with the Right Sum Assured Option
One of the main factors in selecting the best term life insurance plan for the financial protection of your family is deciding on the right sum assured option. Below are the options available for sum assured amounts that are best for you:
What is the Importance of Term Insurance Plans During COVID-19?
Term insurance plan is important during COVID-19 for several reasons:
FAQs About Term Insurance Plans
- Term Insurance
- Rider
- Critical illness
- Premium Amount
What does a term life insurance do?
Ans: Term life insurance is a life insurance plan which offers financial protection to the policyholder for a specified time. In case of unforeseen death of the insured during the policy term, the insurer pays the death benefit to the beneficiary.
What are the 3 benefits of term life insurance?
Ans. The term life insurance offers financial protection for the family in case of the untimely policyholder’s death. And you can also get optional coverage for accidental death or critical illnesses. Term plans also cover you for the long term at low premium rates.
What is term life insurance for 2 lakh?
Ans. Pradhan Mantri Suraksha Bima Yojana (PMSBY) is a 1-year term life insurance yojana for a 2 lakh life cover. It offers death coverage because of any cause. This scheme comes with a risk cover of Rs. 2 Lakhs in case of the insured's demise for any reason.
What are the disadvantages of term life insurance?
Ans. The disadvantages of term life insurance are:
- No-investment factor
- Premium differ based on age factor
- Surrender value
When should I buy term policy?
Ans. There are no specific criteria but it is always best to invest in a policy as early as possible. The premiums tend to be higher for people in their 30s than for those in their 20s and so on. Buying insurance is always a good idea whether you are in your 20s, 30s, or above.
How much term insurance coverage do you need?
Ans. You can find a quick answer to this question by computing your Human Life Value or HLV. HLV is a simple number that helps you calculate your required life insurance.
Can I take 2 term life insurance plans?
Ans. Yes, there is no limit on buying multiple-term plans to fulfill your life objectives. Buying more than one term insurance plan is certainly beneficial in terms of a number of death benefit payout options, cost-effective premiums, riders, coverage, hassle-free claim settlement, and tax exemption u/s 10(10D) of ITA.
Key Takeaways - Term Life Insurance
Features
- Low Entry Age
- Additional Riders
- Cover against Critical Illnesses
- Payment Flexibility
Benefits Offered
- Low Premium
- Death Benefit
- Long-term Cover
- Tax Benefit
Types Of Term Plans
- Regular Term Plan
- Term Return of Premium Plan
- No-cost Term Plan
- Whole Life Insurance
Who Should Buy
- Individuals
- Newly Married
- Parents
- Taxpayer
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Appreciation for Dilpreet Kaurs Exceptional Assistance
"Dear Policybazaar Team I hope this message finds you in good health. I am writing to extend my heartfelt gratitude to Ms. Dilpreet Kaur PW43115 for her outstanding service. Recently, I had taken a term insurance policy for my wife through Policybazaar, but unfortunately, there was a discrepancy in the information provided by the Policybazaar associate. Consequently, I made the decision to cancel the policy and initiate a new one. Despite several attempts to communicate my concern via email, I had not received a satisfactory response from Policybazaar. However, Ms. Dilpreet took it upon herself to personally reach out to me. She not only understood the gravity of the situation but also took swift action to facilitate the cancellation process. I had been awaiting this resolution for over a month, and today, thanks to Ms. Dilpreet's efforts, I received the confirmation that the policy has been successfully cancelled. I want to commend Ms. Dilpreet for her dedication and commitment towards her role. Her exceptional service has not only rectified a critical situation but has also left me, as a client, extremely satisfied. It is professionals like Ms. Dilpreet who truly make a difference and set a high standard for customer service."
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