Term insurance is a type of Life/Risk cover, which provides financial coverage to the dependents of the insured person for a defined period of time. In the absence of the insured person during the during the policy term, then death benefit is payable to nominee.Term insurance are specifically designed to secure your family needs in case of death or uncertainty.
What if I rescue?
On surviving, one doesn’t get anything back as there is no ‘saving’ portion of the premium. In this sense, premium paid for term insurance is similar to the premium paid for car/bike insurance(People Insure their Vehicles, why not their own life?), assuming there is no claim on it.
Will I get a tax benefit?
Yes! Premiums paid for all life insurance policies are exempted from tax up to a maximum of Rs 1.5 lakh under Section 80C of the Income Tax Act, 1961.
The claim/maturity amount received by the beneficiaries or bonus in the hands of the policyholder is tax free under Section 10 (10D) of the Income Tax Act.
How to choose a good term plan?
To choose good term plan you should consider important factors like:
- How good is the insurance company
- Good claim settlement ratio
- Compare the terms and conditions of various insurance companies
- Do not just look for the low premium which some companies offer, as they might be an important factor but may have several conditions attached at the time of claim.
If I missed a premium?
First know the status of your policy through your agent or insurance company. According to LIC a grace period of 30 days is allowed for the mode of payment of premium is yearly or half yearly.
I am covered by company’s term insurance for free…..WHY SHOULD I GO FOR TERM INSURANCE POLICY
Group Term Insurance, Group Health Insurance, like most other employee benefit scheme, is only valid till the time you are with the company. If you left the company, it will leave your dependents vulnerable without a life cover for you in a place.
Do Term Insurance pay in case of Accidental Death or Death Outside India?
Yes, term insurance pays in case of an accidental death. Insurance company will pay the claim if the death has occurred due to any reason, be it natural or accidental death, or death due to some illness. There are certain riders (additional benefits) such as accidental death benefit, permanent disability rider and critical illness rider.
Yes, term plans cover death outside India provided the policyholder has updated this fact with the insurance company. He needs to mention that he now lives outside India to the insurance company. However, if he is going to a country that is marked as unsafe like Pakistan, Burma, Somalia etc, then the company will decline this facility. Otherwise, this cover will be valid in other countries like US or UK.
Can NRI’s buy Term Insurance ?
Yes, but a person has to be resident in India to take up insurance policy from an Indian Company. Also documents required like Address proof/age proof are to be for some place in India.
|Term Plans||Entry Age (Min / Max)||Policy Term||Premium Amount (Rs.)/year||Minimum Sum Assured||Payout Type||Claim settlement ratio (FY 16- 17) as per IRDA|
|LIC’s e-Term||18 / 60 Years||10-35 years||18920||Rs. 25,00,000 for Aggregate category Rs. 50,00,000 for Non-smoker category||LumpSum Only||98.31%|
|Max Life Online Term Plan||18 / 60 Years||10-35 years||10716||Rs 25,00,000||Lumpsum & Income Options||97.81%|
|BSLI [email protected]||18 / 55 Years||5-30 years||12840||Rs. 50,00,000||Lumpsum only||94.69%|
|Tata AIA iRaksha Supreme||18 / 70 Years||10-40 years||10380||Rs 50,00,000||LumpSum Only||96.01%|
|ICICI prudential – iProtect Smart Plan||18 / 65 Years||5-40 years||14856||Subject to minimum premium paid||Lumpsum & Income Options||96.68%|
|PNB Metlife – Mera Term Plan||18 / 65 Years||10-40 years||16812||Rs. 10,00,000||Lumpsum & Income Options||87.14%|
|Bajaj Allianz iSecure||18 / 60 Years||10 | 15 | 20 | 25 | 30 years||15192||Rs.250,000 for general category Rs.20,00,000 for the categories split by Preferred Non-Smoker1 , Non-Smoker1 & Smoker||Lumpsum only||91.67%|
|Kotak Preferred e Term Plan||18 / 65 Years||10-40 years||10464||Rs 25,00,000||Lumpsum only||91.24%|
|HDFC Life Click 2 Protect Plus||18 / 65 Years||10-40 years||12876||Rs 25,00,000||Lumpsum & Income Options||97.62%|
|AEGON Life iTerm Plan||18 / 65 Years||5 – 40 years; or upto 75year||15432||Rs 10,00,000||LumpSum Only||97.11%|
|HSBC I select lumpsum||18 / 70 Years||10 | 15 | 20 | 25 | 30 | 35 | 40 years||10248||Rs. 25,00,000||LumpSum Only||94.95%|
|SBI Life – eShield||18 / Max: 1.For Level Cover & Level Cover with Accidental Death Benefit: 65 years 3.For Increasing Cover & Increasing Cover with Accidental Death Benefit: 60 years||Min: For Level Cover & Level Cover with Accidental Death Benefit: 5 years For Increasing Cover & Increasing Cover with Accidental Death Benefit: 10 years MAX- 30 years||11316||Rs. 20,00,000||LumpSum Only||96.69%|
|Aviva I Life||18 / 55 Years||10 – 35 years||13368||Rs. 25,00,000||LumpSum Only||90.60%|
|Bharti Axa Life – eProtect||18 / 65 Years||Fixed Policy Term – Minimum – 10 years, Maximum – 30 years Customised Policy Term – Up to 60 years, Up to 65 years, Up to 70 years, Up to 75 years||11904||Rs. 25,00,000||LumpSum Only||92.37%|