Term Insurance

Why Should You Buy Term Life Insurance Plan?

There are various reasons to buy a term life insurance plan. However, here are the key and basic reasons that you must buy term insurance:

• The Dependency of your Family: You can use the term life insurance money to meet the monthly expenses of your dependents and family when you’re not around. Moreover, it fulfills vital life goals such as education and the marriage of your child.
• Protection of the Assets: A term plan allows you to take loans for assets such as a car or a house. Nevertheless, if you’re not around, your dependents and family might be burdened with the repayment of loans. In such circumstances, your family can utilize the term insurance pay-out in paying off the outstanding debts.
• Risks Related to Lifestyle: Present-day lifestyle problems often lead to various ailments and diseases. Some term insurance plans do not just safeguard your dependents and loved ones after the demise of the policyholder but also offer critical illness protection for a lifetime. This key feature pays on the diagnosis of some critical illnesses such as heart attack or cancer.

Online Term Plan

Term life insurance plans offer financial security to the family of the insurer with the highest life coverage for the minimum premiums during the 'term' of the policy

Who Should Buy Term Plan?

Any individual with financial dependents should consider purchasing an online term insurance policy. This includes young professionals, parents, married couples and people who want to gain tax benefits as a term insurance plan provides tax benefits 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.

• Parents: Parents are generally the single breadwinner of the family and the only financial support for their children. Thus the best way to secure the financial future of the children is to have a term insurance policy. As in the term plan, a death benefit is paid to the beneficiary of the policy in case of the unfortunate demise of the insured person.
• Newly Married: A term insurance policy can work as a financial safety net for your spouse even in your absence. In case of any eventuality, the term life insurance plan not only provides financial security to the beneficiary but also takes care of the liabilities.
• Young Professionals: If you are a young professional who has recently started working, buying a term life insurance plan is highly recommended. The reason for the same is very simple, you will get a substantial coverage amount at lower premiums.
• Taxpayers: Along with the benefit of life coverage, one of the major advantages of purchasing a term insurance policy is that it offers the benefit to save on taxes. The premiums paid towards the term policy are tax exempted under section 80C of the Income Tax Act. Thus, if you want to save on taxes along with the benefit of life cover then you should certainly consider buying a term policy.
• Retired or those who are recently retired: At this stage of your life you may think twice about buying a term plan. This can be because of the lesser number of responsibilities by this age. However, if you have a non-working spouse or child, you must buy a term plan even at the sunset years of your life.
• Self-Employed People: If you come under this category, buying a term plan is beneficial for you. This is to ensure that the aspirations of your financial dependents are not compromised.
• Working Women - For working women who have started this new phase of life, buying a term plan is beneficial.

Best Term Life Insurance Plans In India

Insurers	Term Plan	Claim Settlement Ratio	Max Maturity Age	Premium (for a cover of 1 crore)
Aditya Birla Sun Life Insurance	ABSLI LifeShield Plan	98.02%	75 years	Rs. 623/month
Aegon Life	iTerm	98.01%	100 years	Rs. 479/month
Bajaj Allianz	Life Cover	98.48%	85 years	Rs. 458/month
Canara HSBC OBC Life Insurance	iSelect+ LumpSum	98.12%	99 years	Rs. 480/month
EXIDE Life insurance	Exide Life Elite Term	98.54%	70 years	Rs. 451/month
Edelweiss Tokio	Zindagi Plus+ Lump sum	97.0%	80 years	Rs. 478/month
Future Generali	Future Generali Flexi Online Term-Lumpsum	95.2%	75 years	Rs. 486/month
HDFC Life	Life Option	98.01%	85 years	Rs. 709/month
ICICI Prudential	iProtect Smart Lumpsum	97.9%	85 years	Rs. 647/month
India First	e-Term Plan	96.81%	65 years	Rs. 422/month
Kotak Life	e-Term	98.5%	75 years	Rs. 654/month
Max Life	Smart Term Plan Life Cover	99.35%	75 years	Rs. 571/month
PNB Metlife	Mera Term Plan-Full Lumpsum payout	98.17%	99 years	Rs. 585/month
Reliance Nippon Life Insurance	Reliance Digi-Term	97.71%	65 years	Rs. 500/month
SBI Life	eShield	94.5%	80 years	Rs. 589/month
Tata Aia	TATA Maha Raksha Supreme Lumpsum	98.02%	85 years	Rs. 927/month

Disclaimer: “Policybazaar does not endorse, rate or recommend any particular insurer or insurance product offered by an insurer.”

Key Features of Term Insurance Policy

Key Features	Benefits Offered
Death Benefits of Term Life Insurance	A predefined amount is paid out to the nominee in case of the unfortunate demise of the policyholder
Maturity Benefits	Available under Term Insurance with Return of Premium option
Tax Benefits	Available under all types of term insurance plans.
Riders/ Add-on Covers	A number of rider benefits or add-on covers such as critical illness, waiver of premium, extra payout on accidental death/disability are available with Term insurance plans.
Coverage Against Various Liabilities of Term Insurance	Most of the Term insurance policies provide coverage against various liabilities of the policyholders like mortgage, loans, and other types of debts.
Buying Process	Online and Offline
Claim Assistance	Available
Claim Process	The easy online and offline claim process
Physical Paperwork	Only in case of offline policy purchase
Premium Payment Frequency in Term Life Insurance	Annual Quarterly Half-yearly Monthly Single
Payout Options of Term Plan	One Time Payout, One Time Lump-Sum Plus Fixed Monthly Payouts, Fixed Monthly Payouts, and One Time Lump Sum Payment Plus Increasing Monthly Payouts
Sum Assured (Min/Max)	Minimum – Starts at Rs. 5 Lakhs/ Maximum – No Limit

What are the Variants of Term Insurance Plan?

Variants of Term Insurance Plan	Benefits
Basic Term Plan	The death benefit is offered in a lump sum amount at low premium rates
Term Plan with Monthly Income	Offers Fixed and stable income for family along with the death benefit
Term Insurance with Growing income (monthly)	The death benefit is offered along with the growing monthly income for a family
Term Insurance with Return of Premium (TROP)	Upon the maturity, return of all the paid premiums, along with the death benefit during the policy term.
Group Term Insurance	This plan provides life coverage for a group of individuals under a single policy

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.

What are the Types of Term Plans in India?

There are a number of term plans 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 term plans we need to look at them a bit more in-depth.

• Level Term Plan

  The level term plan is one of the easiest types of term plan wherein during the policy tenure the sum assured remains unchanged and the benefits are paid to the beneficiary on the demise of the policyholder. The level term plan is easily available in PAN India and is offered by various insurance companies. The rule is simple the younger you are when buying this type of term life insurance plan the premiums will be that pocket-friendly.

• Term Insurance with Critical Illness Cover

  Along with the benefit of life cover, this term plan comes with critical illness cover that is paid out in case the life assured is diagnosed with any of the 34 specific critical illnesses such as heart attack, cancer, kidney failure, etc.

• Term Insurance with Limited Pay

  Under this term plan option, the policyholder can choose to pay the premium of the policy for a limited tenure. However, the benefits of the plan continue for the entire tenure of the policy.

• Term Insurance With Accidental Death Cover

  Under this plan option, the beneficiary of the policy receives the life cover along with the benefit of accidental death cover in case of accidental demise of the life assured during the policy tenure.

• Standard Term Insurance Plan

  A standard term life 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.

• Term Return of Premium (TROP) Plan

  A term insurance return of premium policy is a term plan that refunds the premium paid for the cover in case the insured party survives the policy period. These term plans 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 insurance policies 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 Plan

  Group term insurance are a term insurance plan that is specially designed for businesses, companies, societies, associations, or large families and provides 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 plans are offline as each policy is generally customized to suit the needs of the group taking the policy.

• Increasing Term Plan

  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 insurance 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.

• Decreasing Term Plan

  The decreasing term insurance plan is 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 policies are generally offered as mortgage clearing plans. Decreasing term plan is taken to clear debts and loans. In case of the demise of the insured person, the available sum assured amount is paid towards the repayment of the loan. The premium rate of decreasing term plans 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.

• Convertible Term Plan

  This type of term insurance plan is generally offered by some insurance companies in India. As the name suggests the key highlight of taking a term plan is that when buying this term insurance plan you can opt for the alternative to convert the plan into some other plan in the coming times and accordingly select a date. For instance, if you had taken a term insurance plan let’s just assume for 25 years, however, after 5 years, you intend to convert this into any other plan like an endowment plan or any other plan, you can go ahead.

• Single Life and Joint Life Term Insurance Plan

  A joint term insurance plan works out to be cheaper than buying two individual term insurance plans. 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 they 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 and Online Term Plan

  Offline term plans are those that are sold through traditional methods such as through an agent or a branch, while online term plans refer to term insurance plans 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.
  
  

Term Insurance Riders

Return of premium option

Critical Illness cover

Accidental Death Cover

Limited pay

View Plans

Term Plan Comparison

For a better understanding of our readers, here we have shown the term plan comparison chart.

Disclaimer- “Policybazaar does not endorse, rate and recommend any particular insurer or insurance product offered by an insurer.

What are the 5 Reasons to Buy Term Plan Online?

Apart from the hassle-free and simple process of purchase, an online term plan offers many other benefits.

• Affordability:

  Purchasing an online term insurance plan is more affordable as compared to purchasing the plan offline. This is because there are no agents involved in between. The policy buyers can directly purchase the online term plan by visiting the website of the insurance company. By purchasing the plan online, the paperwork and processing fees automatically decrease as everything is done online and these benefits are offered to the customers as discounts. Thus, buying an online term plan is more beneficial as compared to the offline term insurance policy.

• Sum Assured

  This is yet another benefit of buying an online term insurance plan. Mostly, the sum assured amount offered by an online term plan tends to be higher in contrary to an offline term insurance plan, because the overall cost of purchase is low. Moreover, while purchasing the term plan online, most insurance companies do not ask for any medical test. A medical test of the insurance buyer has only required in case the sum assured amount of the policy is above Rs.50 lakhs.

• Comparison

  One of the perks of buying an online term insurance plan is that it offers the advantage to compare term insurance policies online and then choose a particular plan as per one’s own requirement and suitability. By comparing term insurance plan online, the insurance buyers can zero in on the most beneficial plan at the most affordable premium rates.

• Reliability

  The online process of policy purchase is more reliable. The online term insurance policy offers transparency while purchasing a policy. The policy buyers can know about the features, terms and conditions of the policy in a more detailed way by simply visiting the website of the insurance company. Moreover, in order to make an informed decision, the insured can also check the reviews of the plan.

• Easy Access

  Unlike offline term insurance policies, the online term insurance plan can be accessed easily. The insurance holder has the convenience to access and know the policy details whenever they require. Moreover, they can also check and keep track of the policy status from time to time.

What are the Three Steps to Find the Right Online Term Plan?

The best thing about the online term plan is the freedom of the policy holder to select the most suitable policy. In addition to this, the online term insurance plan as well brings some additional responsibility on the insured of staying focused and informed about 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:

• Select the Right Term Life Insurance Amount

  The first step that every term life insurance buyer should consider while purchasing is 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 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 Comparison

  Term insurance plans are the purest form of life insurance. Term insurance premiums are lower than other life insurance plans. However, in order to ensure the right plan, one should go for a term insurance comparison. Compare term insurance with other insurance plans online and stay covered.
  A term insurance aspirant as well is suggested to compare term insurance Plan through online term insurance comparison websites. One should compare different term insurance plans 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.

• Consider the Riders for Better Risk Coverage

  Term Plan as well allows 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 attaching 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.

Complete Guide to Buy Term Insurance Plan

To select the best term insurance plan, a policyholder should look into the following factors:

• Claim Settlement Ratio

  The record of term insurance claim settlement provides a clear picture of the insurance provider to the prospect policy buyers. The ratio of claim settlement is released by the Insurance Regulatory and Development Authority (IRDA) India every year. A claim settlement ratio that is consistently good indicates that the insurance provider has been quick and robust in its claim settlement process.

• Company Reliability

  The reputation of a company and stability is very important in any sector of business, especially in the sector of life insurance for the customers to trust. Before zeroing in on a plan, it is important to check the credibility of the insurance company.

• Premium Waiver Rider upon Diagnosis of Terminal Illness:

  If the policyholder gets affected by some terminal illness, then all the future premiums for his/her term policy will be waived off.

• Solvency Ratio

  The solvency ratio is something that tells whether the insurance provider chosen will be capable financially of settling the claims if the requirement arises. As per IRDA, every life insurance provider should maintain a solvency ratio of 1.5 at least.

• Enhanced Cover

  Some of the specific insurance companies offer the option of enhanced cover in the term plan. In this option, the policyholders can enhance the coverage of the policy under particular circumstances or critical situations.

When is the Right Time to Buy a Term Life Insurance Policy?

The ideal time to buy the online term plan is as early as possible. The early one buys the better it will be. Buying the right term plan ensures that you obtain the desired life coverage. Moreover, buying term policy at an early stage of life means that the insurance premiums will be low compared to the times if bought at a later stage of life.
The moment one realizes that they have dependent on their life, they should immediately look for a plan and buy the best term policy. In case one has missed investing in the term plan at an early stage of life, do not neglect it further by buying the best online term insurance now. It is better to be safe than sorry.

*All savings are provided by the insurer as per the IRDAI approved insurance plan. Standard T&C Apply