Unique Features In Term Insurance

Note: Know more about what is term insurance first before reading this article.

Its term life insurance offerings feature some of the most unique term insurance benefits that were previously unheard of. Furthermore, you get guided consultations with experts who accommodate your special requirements ensuring a personalized approach. 

Term insurance has evolved as a product offering to include a host of new features. Each feature serves to address the unique insurance needs of the people. These are introduced as incentives to encourage more and more people to buy life insurance. Here’s a look at some of the most distinctive ones:

• Financial surrogates for low-income groups - Alternative income proofs such as car ownership and credit card statements to supplement your insurance cover 

• Voluntary Top-Up - Add to the existing sum assured on reaching key milestones in your life. 

• Premium Holiday - Take a break from premium payments for up to a year without affecting your life cover in any way 

• Housewife Insurance - Get your non-working spouse a life insurance cover from Max Life and PNB MetLife exclusively at Policybazaar

Credit Card Surrogate For Term Insurance

1. Use your credit card statement as alternative income proof to enjoy higher term insurance coverage

   Are you worried that your current income may not be sufficient to get a comprehensive term life cover? If yes, you should know that there are other alternatives that you can explore to increase the coverage of your policy. This can be done through financial surrogates which act as supplementary income proof to create a high sum assured amount for your term life cover. 

   Credit card surrogate is one of the special features that is usually unheard of among insurance buyers. Policybazaar has tie-ups with several insurance companies that offer this benefit, thereby ensuring that you have the coverage that effectively fulfills your family’s needs in your absence. 

2. How do credit card surrogates work?

   Say that you have an annual income of Rs. 3-4 Lakhs. With this income, you will not be eligible to secure a term life cover of say Rs. 1 Crore. However, if you have a credit card, you can show your credit card statements as non-standard income proof to supplement your current income. This additional income will be equal to twice your credit card limit. The combined sum becomes your annual income, thereby making you eligible for a higher cover. 

   Notably, Policybazaar offers this benefit with the Max Life Housewife Plan in case the husband’s income is less than Rs. 5 Lakhs or has no income proof. The housewife should have the credit card in her name to be eligible to exercise this option. 

3. Importance of credit card surrogates

   The importance of having an adequate life insurance cover cannot be undermined. However, given the population dynamic in India, not every person earns enough to be eligible for a high cover. This creates a huge gap between the insurance need and the financial eligibility of an individual with a low income. 

   Credit card surrogates help you bridge that gap and create an additional income source equal to 2 times the credit limit. By simple logic, the higher the income the higher the sum you can assure to meet the insurance needs for yourself and your family. 

4. Conditions to avail of the credit card surrogate option for term life insurance

   • The credit card should be solely in the name of the life assured and not held by joint accounts. 

   • The option cannot be availed if there have been any defaults in repayment. 

   • Only one card with the highest credit limit can be used. 

   • A credit card statement of the last 6 months has to be submitted, displaying the credit limit. 

Car Surrogate For Term Insurance

1. You can now use your car to buy a high term life insurance cover as a substitute for low annual income 

   Don’t let low income come in the way of ensuring comprehensive financial security for your family in your absence. Introduced as a novel concept in insurance, the car surrogate option allows buyers with low annual income to buy high term life insurance covers. Financial surrogates such as these help bridge the insurance gap that exists among people belonging to different income brackets. 

   For instance, Max Life Housewife Plan enables a husband with no or low income to buy insurance cover for their housewife using car surrogates. For your information, this plan is sold exclusively by Policybazaar on its platforms. 

2. Let’s understand how you can use car surrogates to buy term insurance. 

   In a standard term insurance cover, the sum assured largely depends on the individual’s Human Life Value (HLV) or his/her financial eligibility. Now a person with an annual income of Rs. 2-3 lakhs won’t be eligible for a high, comprehensive cover that can take care of their financial liabilities after death. In such cases, (s)he can submit financial car surrogates such as the IDV of their own car, or the RC. Based on how old the car is, its ex-showroom price, IDV, etc. the eligible sum assured is calculated. 

3. Important Pointers To Note

   • Most insurers offer the option of using car surrogates if the car is less than 5 years old. 

   • Your age, the IDV of the car, and its ex-showroom price are determining factors of the sum assured. 

   • The minimum annual income of the policyholder should range between Rs. 2.25-3 Lakhs to be eligible to exercise this option. 

   • The car should be solely in the name of the life assured. 

   • Car ownership has to be established by submitting surrogate documents such as IDV and the RC. 

   • Eligibility is further subject to the merits of the case and the decision is taken at the discretion of the insurance company. 

   Examples of insurance companies that allow car surrogates as non-standard income proof are Max Life, Exide Life, Edelweiss Tokio, ICICI Pru, and Kotak Life among others. The terms and conditions shall vary per insurer. 

Premium Break - Max Life SSP  

1. Premium Holiday is the industry’s first unique feature by Max Life Insurance 

   Premium Break or Premium Holiday is an exclusive feature offered by Max Life Insurance SSP (Smart Secure Plus) Policy. Once the plan has been in force for 10 years, you can take a premium holiday from paying the premium rates. When you opt for a premium break, your plan will continue to be in force, with the risk cover operating according to T&Cs of the Max Life Term Plan. The premium holiday option can be selected two times all through the premium payment term and is only applicable for plans with a policy tenure of more than 30 years and a PPT of more than 21 years.  Premium Holiday is an optional feature in this policy that can be used by both males and females. The customer has to pay a little extra amount of premium for this feature. Read on to know more about the Premium Holiday option in Max Life SSP: 

   Note: You can easily calculate the term plan premium by using the term insurance calculator online tool.

2. Key benefits of Premium Break Option

   Here are the key features of the Premium Holiday Option: 

   • PH option or Premium Break is available in both pure and TROP (Term Return of Premium)

   • Provides financial protection to the family even during financial hardship of customer 

   • Option to skip paying premiums for 1 year and you can still be covered 

   • Two premium breaks will be available during the policy tenure 

   • The policyholder is allowed to avail 2 annual breaks from paying premiums with the policy in force 

3. When can you Opt for the Premium Holiday Option? 

   • 1st premium break is available after the completion of 10 years of the policy, provided the policy is active. The tenure of one premium break shall be 12 months of the policy. 

   • The policyholder has to inform 30 days before the plan anniversary to use this option in the coming year

   • 2nd premium break can be availed after a minimum gap of 10 years from the 1st premium break 

   For example: If a policy is issued in April 2022 and a 1st PH is taken in 2036 (after 1st 10 years of issuing the policy).  Second PH can be taken after 2046 i.e., a minimum of 10 years’ gap is a must from the first premium break. 

4. Eligibility 

   Minimum Premium Payment Term (PPT)	22 years
   Maximum Premium Payment Term (PPT)	31 years
   Payment option	Regular and pay till 60 years of age
   Rider	Accidental Death Benefit Rider

5. Terms & Conditions for Premium Holiday Option

   • If a policyholder does not use this PH feature during the policy term, in such cases company will automatically waive off the last 2 years or 1 year of premiums. 

   • The customer has to select this option at the time of commencement of the policy, it cannot be added at later stages. 

   • If a customer purchases Premium Holiday, he/she cannot opt for a Voluntary top-up. 

   • Joint life option is not available with Premium Holiday

Voluntary Sum Assured Top-up – Max Life SSP 

1. Voluntary Top-up is an Industry’s first feature offered by Max Life SSP 

   With the VTU (voluntary top-up) option of the Max Life Smart Secure Plus, you can enhance or increase the SA at any time during the policy tenure. If the SA chosen at the commencement of the policy is more than or equivalent to Rs. 50 lacs, you can avail of this feature after completing 1 year of the policy. In this, you have the option to increase the coverage to 100 percent of the basic sum assured. The plan must have a minimum PPT of 5 years and a minimum PT of 10 years for this feature to be available. The amount shall be payable in case of the policyholder’s death or upon the terminal illness diagnosis. This option can only be availed after a waiting period of 1 year from the time of issuing the policy. 

2. Key Features of Voluntary Sum Assured Top-up 

   • Option to double your life insurance coverage at the time of your requirement by increasing the SA amount up to an additional 100 percent of the basic sum assured chosen at inception. 

   • It is an in-built and free option in this policy which can be used by both males and females to increase the basic sum assured only 

   • Premiums are guaranteed to the buyer at the time of commencement of the policy 

   • This option can be used only once in the policy term, after the 1st year of the policy 

   • The minimum policy term is 10 years 

   • The premium paying term should be a minimum of 5 years when a buyer decides to use VTU 

3. Eligibility 

   • The minimum sum assured is Rs. 50 Lakhs 

   • Multiples of 10 Lakhs only and maximum increase is up to 100 percent of the base sum assured 

   • This option is only available with life cover 

4. Terms and Conditions of Voluntary Sum Assured Top-up 

   • If a customer purchases PH, he/she cannot use the Voluntary Top-up option

   • At the time of using Voluntary Sum Assured top-ups, the maximum age should not be greater than 50 years 

   • No need to mention any type of reason, if the customer wants to use the VTU option 

   • VTU cannot be used in the last 10 years of the policy term

Note: Check out the best term insurance plan in India and choose one that suits your requirements.