Credit Protection in Term Insurance

Term insurance is a crucial financial safety net for families, providing a lump sum payout in case of the policyholder's untimely demise. But what happens to outstanding debts like home loans, personal loans, or credit card dues? This is where credit protection in term insurance comes into play.

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What is Credit Protection in Term Insurance?

Credit protection in term insurance is a feature that is designed to pay off debts such as car loans or home loans if the policyholder dies, loses their job, becomes disabled, or has a critical illness. This means your family won't be burdened with the financial responsibility of repaying your loans, allowing them to maintain their financial stability during a difficult time.

If you want to ensure that your debts are easily paid off in case of unfortunate events, Credit protection in term insurance is the right option.

Term Plans

₹1
Crore

Life Cover

@ Starting from ₹ 13/day⁺

₹50
LAKH

Life Cover

@ Starting from ₹ 8/day⁺

₹75
LAKH

Life Cover

@ Starting from ₹ 12/day⁺

How Does Credit Protection Work?

It pays out the balance of a loan or makes debt payments on the policyholder's behalf.
It prevents a family's assets from being used to repay loans.
It provides a cushion to absorb unexpected costs and protect against financial hardship.

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Understand this with the help of an Example:

Raman is a 30-year-old software engineer with a wife and two children. He knows the importance of being financially secure and opted for a term insurance policy with credit protection. One day, Raman was in a serious accident that injured his right arm, making it impossible for him to continue working. As a result, paying off his outstanding loans became a challenge.

Fortunately, with the Credit Protection feature in his Term Insurance Policy, the insurance company covered his outstanding loan amount, ensuring his family remained financially secure during a difficult time

What are the 2 Types of Credit Protection in Term Insurance?

In case of early death, credit protection in term insurance protects people and their loved ones from the financial difficulty of non-paid obligations:

Disability Insurance: This insurance pays the benefit if you cannot work because of an illness or injury.

Job loss insurance: This insurance covers expenses if you lose your job. These types of insurance plans are generally sold separately from term insurance plans. Policyholders should understand the coverage needs and make decisions based on financial circumstances.

What are the Benefits of Credit Protection In Term Insurance?

Peace of mind: Knowing your family won't be burdened with debt brings invaluable peace of mind.
Financial stability: Protects your family from financial hardship and potential loss of assets due to outstanding loans.
Preserve your legacy: Ensures your hard-earned assets are passed on to your loved ones, not creditors.
Affordable: Credit protection riders are typically available at a nominal additional cost.

How Much Coverage is Needed for Credit Protection in Term Insurance?

The required coverage amount depends on an individual's financial obligations and the number of dependents. When determining the ideal coverage, it's important to account for all outstanding loans, mortgages, credit card debt, and other financial liabilities. A higher coverage amount ensures better financial security for your loved ones in case of an unexpected event.

Eligibility Criteria of Credit Protection in Term Insurance

Anyone with significant outstanding debts, such as a home loan, personal loan, or credit card dues, should consider adding credit protection to their term insurance plan. This is especially important if you're the primary breadwinner for your family.

How to Get Credit Protection in Term Insurance?

Add a Rider: Most insurers offer credit protection as a rider to their term insurance plans. You can opt for this rider when purchasing your policy.
Check Coverage: Ensure the coverage amount is sufficient to cover all your outstanding debts.
Read the Fine Print: Understand the terms and conditions, including exclusions or limitations.

What is the Claim Process for Credit Protection in Term Insurance?

Claiming a credit life insurance plan is an important step in ensuring your family is financially secure when any unfortunate event happens. Let’s discuss the claim process in life insurance, points to filing a claim, and what should happen after submission. This process includes the 3 simple steps:

Informing the insurer
Providing documents to process the claim
Waiting for the insurance company's final decision

Wrapping Up!

Credit Protection in Term Insurance is a crucial feature that safeguards your family from financial burdens in times of crisis. In the event of disability, job loss, or an untimely demise, this benefit ensures that outstanding loans are taken care of, preventing financial strain on your loved ones. By choosing a term insurance policy with Credit Protection, you can secure your family's future and enjoy peace of mind, knowing they won’t have to struggle with unpaid debts.

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˜The insurers/plans mentioned are arranged in order of highest to lowest Sum Assured(SA) offered by Policybazaar’s insurer partners offering term insurance plans on our platform, as per ‘first year premium of life insurers as at 31.03.2025 report’ published by IRDAI.

Policybazaar does not endorse, rate or recommend any particular insurer or insurance product offered by any insurer. For complete list of insurers in India refer to the IRDAI website www.irdai.gov.in

Rs. 400/month is starting price for a 1 crore term life insurance for an 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 30 years of age, rounded off to nearest 10.

Rs. 400/month (Rs.13/day) is starting price for a 1 crore term life insurance for an 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 30 years of age.

+Rs. 230 is starting price for a 50 lakhs term life insurance for an 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 30 years of age, rounded off to nearest 10.

+Rs. 8/day is starting price for a 50 lakhs term life insurance for an 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 30 years of age, rounded off to nearest 10.

+Rs. 12/day is starting price for a 75 lakhs term life insurance for an 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 30 years of age, rounded off to nearest 10.

+Rs. 497/month is starting price for a 1.5 crore term life insurance for an 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 30 years of age.

+Rs. 487/month is starting price for a 2 crore term life insurance for an 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 30 years of age.

+Rs. 626/month is starting price for a 3 crore term life insurance for an 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 30 years of age.

+Rs. 905/month is starting price for a 5 crore term life insurance for an 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 30 years of age.

+Rs. 1,267/month is starting price for a 7 crore term life insurance for an 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 30 years of age.

*The full refund of premium is available on availing the one-time option of refund of premium. Total premium paid for policy (paid for add-ons) will be the special exit value, payable on availing the one-time option of refund of premium if you wish to completely exit the policy.

+Rs. 447/month is starting price for a 1 crore term life insurance for an (NRI) 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 30 years of age.

+Rs.679/month is starting price for a 2 crore term life insurance for an (NRI) 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 30 years of age.

+Rs. 910/month is starting price for a 3 crore term life insurance for an (NRI) 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 30 years of age.

+Rs. 1,374/month is starting price for a 5 crore term life insurance for an (NRI) 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 30 years of age.

+Rs. 1,924month is starting price for a 7 crore term life insurance for an (NRI) 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 30 years of age.

Women

+Rs. 400/month is Starting price for a 1 crore term life insurance for an 18 year-old Female, non-smoker, with no pre-existing diseases, cover upto 30 years of age, rounded off to nearest 10.

Rs. 461/month is the starting price for a 1 crore term life insurance for an 24 year-old female, non-smoker, with no pre-existing diseases, cover upto 54 years of age.

1,642/month is the starting price for a 1 crore term life insurance for an 44 year-old female, non-smoker, with no pre-existing diseases, cover upto 74 years of age.

Prices offered by the insurer are as per the approved insurance plans | #All savings and online discounts are provided by insurers as per IRDAI approved insurance plans | Standard Terms and Conditions Apply | **Tax Benefits are subject to changes in tax laws.| Policybazaar Insurance Brokers Private Limited

We will respond in the first instance within 30 minutes of the customers contacting us. 30-minute claim support service is for the purpose of giving reasonable assistance to the policyholder in pursuance of the claim. Settlement of claim (including cashless claim) is the responsibility of the insurer as per policy terms and conditions. The 30-minute claim support is subject to our operations not being impacted by a system failure or force majeure event or for reasons beyond our control. For further details, 24x7 Claims Support Helpline can be reached out at 1800-258-5881

For more details on risk factors, terms and conditions, please read the sales brochure carefully before concluding a sale

Policybazaar Insurance Brokers Private Limited | CIN: U74999HR2014PTC053454 | Registered Office - Plot No.119, Sector - 44, Gurgaon, Haryana – 122001 | Registration No. 742, Valid till 09/06/2027, License category- Composite Broker Visitors are hereby informed that their information submitted on the website may be shared with insurers. Product information is authentic and solely based on the information received from the insurers.

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