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Term Insurance

Secure Your Family's Financial Future at the Lowest Cost
Term Insurance Plans

About Term Insurance Plans

The death of a loved family member is painful, especially if he is the breadwinner of the family; it can be even more traumatic, which can cause an emotional and financial turmoil in the family.

To make sure your family does not suffer any financial hardships in your absence, you must have a term insurance plan. Term insurance provides financial support to your family in case of your untimely death.

Types of Term Insurance

Standard Term Insurance

Standard term insurance is the most simple and straightforward term plan. The life assured pays the premium as per the mode decided at the time of policy purchase. The premium payment frequency can be annual, half-yearly, quarterly or monthly. The premium amount and life coverage (sum assured) are fixed at the time of selection and purchase. The policy period can be anywhere between 5 to 40 years as per the current age and the maturity period opted.

Note: In case, the life assured passes away during the policy period, the insurance company pays the sum assured to the nominee as per the payout opted by the policyholder.

There is only death benefit under the standard term plan. There is no maturity benefit or survival benefit offered that means if the life assured outlives the policy term, there is no payout.

Example of a Standard Term Insurance Plan:

Let's see the below two sample premium rates for men and women buying a standard term insurance. Let's say, a 30 years old non-smoker opts for a term plan with a sum assured of Rs.50 lakh with a maturity age up to 65 years.

The sum assured and the premium amount stays fixed throughout the policy period. The payouts are as opted by the policyholder.

AgeGenderTermSum AssuredAnnual Premium (Range)
30 yearMale35 yearsRs.50 lakhRs.4,500 – Rs.6,700
30 yearFemale35 yearsRs.50 lakhRs.3,900 – Rs.6,000

Term Return of Premium (TROP)

In the Term Return of Premium (TROP), if the life assured survives till the end of the policy term, the insurance company pays back all the premiums paid.

Example of Term Return of Premium (TROP)

If you pay Rs.7,000 p.a. for 25 years for a cover of Rs.50 lakhs, and if you outlive the policy period, you would get an amount of Rs.1,75,000 (exclusive of applicable taxes).

The premiums of TROP are usually higher than the standard term plans.

Increasing Term Insurance Plan

This plan is similar to the standard term insurance plan with regards to premium payment, and policy term, except, under the Increasing Term Insurance cover with the increasing age, the life cover also increases.

Increasing term plan helps in matching inflation and therefore has been structured accordingly. The coverage of this type of plan increases up to 1.5 to 2 times the original cover. You can lower your stress of remaining under-insured by purchasing this type of term plan. Your life cover increases at a pre-determined rate in this plan.

Your sum assured (coverage) will increase over a number of years. In most of the increasing term plan, the sum assured will increase on every policy anniversary. The increment could be 5% or 10% on the base coverage.

Example of Increasing Term Insurance Plan:

Let's say, a 30 years old non-smoker opts for an increasing term insurance plan with a sum assured of Rs.1 crore. Every year the coverage will increase by 5% on the base coverage, subject to the maximum increase in the coverage offered by the insurance company.

AgeGenderTermSum Assured (Opted)Effective Sum AssuredPayouts
30 yearMale35 yearsRs.1 croreIf the Life Assured dies in the 5th year from the inception of the policy, the effective sum assured is Rs.1.25 crore @5% p.a.At the time of Claim, the Effective Sum Assured is Paid

Life Stage Event Term Insurance Plan

In Life Stage Event Term Insurance Plan, on your significant life stage milestone, you can increase the coverage.

If opted, your sum assured (coverage) and premium increases with each life's milestone, first marriage, first child, a second child, etc.

EventThe increment in the Sum Assured as % of Original Total Sum Assured
Marriage (First Marriage Only)50%
Birth of 1st Child25%
Birth of 2nd Child25%

In case, the life assured passes away during the policy period, the insurance company pays the effective sum assured to the nominee as per the payout opted by the policyholder.

Convertible Term Plan

A convertible term plan allows you to convert your term insurance plan into a whole life insurance or an endowment plan. You can switch your term plan into a whole life plan at a later stage in your life. Charges may be applicable at the time of conversion from a term plan to an endowment or a whole life plan.

Joint Life Term Plan

A joint life term insurance covers you and your better half in a single policy. You and your spouse are covered against the risk of unexpected death in one single term insurance policy.

As a married couple you can now cover yourself and your spouse under a joint life term plan.

How does a Joint Term Insurance plan work?

You pay a combined premium, and both the individuals are covered under a joint term plan. The term period is fixed at the time of buying a policy, and if during the policy period any of the partners die unexpectedly, the surviving partner being the nominee gets the life cover amount.

Example of a Joint Life Term Plan

A married couple purchases a joint term life plan with coverage of Rs.1 crore each for a policy term of 30 years.

The husband is 30 years old, and his wife is 28 years old. In case of any unfortunate event, if the husband dies in the 5th year from the inception date of the policy issuance during the policy period, the surviving partner will receive the sum assured of Rs.1 crore as a lumpsum. But the policy will continue and the insurance company will pay a lump sum of Rs.1 crore on the death of the surviving partner during the policy term to the nominee and terminate the policy. In this way, the total payout will be Rs.2 crore.

Note: The premium and payouts are indicative. These may vary from insurer to insurer.

Single life or Joint Life Term Plan

Points of DifferenceJOINT TERM PLANTWO SEPARATE TERM PLAN
Who is covered?Both the partners are covered in a single policy.Needs two different term plans to cover both the partners.
Life CoverageDepending on the annual income of the policyholder – sum assured can be same for both the partners or maximum 50% for the spouse. Both the partners are covered on the same terms.Sum assured may vary for each partner. Each spouse can select as per the needs and annual income.
In case any of the partners dies during the policy term?Full payout of the sum assured, and the plan continues for the surviving spouse, depending on the planning scheme or the surviving partner who is no more insured, may need to buy another term plan.Full payout of sum assured and policy of that life assured terminates. The surviving partner stays covered under his term plan.
What if both the partners die?Single payout of sum assured or respective sum assured to the legal heir(s) depending on plan.The double payout from both the term insurance policies to the legal heir(s).
Suitability1. It is suitable for middle age couples, as buying two different policies in middle age may have higher premiums which are not advisable.
2. It is also suitable for couples not having much age differences.
3. Preferably, for couples living the same lifestyle, as smoker or non-smoker, else the premium would be higher for both even when one of the partners doesn't smoke.
1. It is advisable to opt at a young age, as the premium will be lower.
2. It is also suitable for couples having a big age gap between them. Because then the overall premium paid will be far lower and will be as per the age and sum assured.
3. It is suitable if any of the partners is not a non-smoker, in which the premium and sum assured could differ.
Who should buy?If any of the partners is a homemaker or have a low income, one should opt a joint term plan.If both the partners are working and are contributing to the family’s income should opt for two single term plans covering each individually.

Group Term Insurance

Group term plans are life coverage plans for employees of businesses, companies, or any large group of people associated together, which provides life cover to all the members of the group. Group term insurance plans are same as individual term plan, except they are meant and priced for a group as a whole, and the premium changes every year. As soon as an individual leaves the group, he/she will not be a part of a group term plan.

Riders in Term Insurance

Riders are the additional optional features that enhance the base policy coverage. There are many riders that you can attach to your base term plan. Most companies also offer a few riders as an in-built feature of a term plan. Before buying a term insurance plan, one must see that rider is available as an in-built feature in the same or as an add-on to the policy.

On paying a small amount of additional premium, you can opt for such riders. These riders are highly beneficial as they come with their own standalone coverage amount.

For instance, if the life assured dies due to a road accident, under a standard term plan only the death benefit will be paid to the nominee. But, if there’s an Accidental Death Benefit Rider attached to the base term policy, the insurance company will pay the death benefit plus the rider benefit attached to the accidental death benefit rider.

Types of Riders in Term Insurance

Most common Riders in Term Insurance are:

  • Accidental Death Benefit Rider
  • Accidental Total and Permanent Disability Rider
  • Critical Illness Rider
  • Waiver of Premium
  • Accelerated Death Benefit Rider
  • Hospital Cash Rider

How to Choose the Best Term Insurance Plan

Term plan is a pure death benefit policy that offers financial security to your loved ones. Before you purchase a term plan, it is important to know what factors affect the premium. And also, it is equally important to know how to find the right type of term insurance plan. Because, you don’t want your family to struggle either financially or while figuring out how things work without you.

You want to provide them the best possible way out there to sustain financially when you won’t be there. Plus, it should come at an affordable price.

But is it possible? Yes, it is. So, let’s see, how to short list from the numerous options available.

The best way to choose the best term insurance plan is, to compare various term plans.

Simply, use Coverfox's term insurance premium calculator to get various insurer’s quotes and compare plans on different parameters.

Compare Term Insurance Plans & Buy the Best Term Plan

It is crucial to compare term insurance plans, as all life insurance companies in the market offer different term life insurance plans. Moreover, each life insurance company offers a number of variants of term plans. And analyzing the right plan for oneself could be a task.

But don't worry. Our tool has transformed such a daunting task into a cake walk.

Online term insurance comparison tool removes all the guess work. Not only that, but it also guarantees you the best term insurance plan at an affordable premium!

Let's have a look at the factors you should watch out for while comparing term insurance plans:

  • Premiums Against Size of Life Cover: Everyone wants to be covered sufficiently. Compare the premiums for the size of the life cover offered by the insurance company. This should be ideally large enough to cover all your debts as well as aid your loved ones to lead a comfortable lifestyle post your demise. Nevertheless, the premium too should be pocket-friendly for the cover you opt for!

  • Features of the Term Plan: Always dig deep into the features and benefits offered by the insurance companies while you compare term insurance online. Watch out if the policy you wish to opt for offers flexibility to choose the tenure of your choice, the sum assured amount, inbuilt features like terminal/critical illnesses, accidental death benefit and the premium payment modes.

  • Additional Rider Benefits: Riders are add-ons that enhance your basic term plan insurance. You can buy term insurance riders at an additional cost. Before buying a term insurance plan online, ensure to compare the riders offered by different insurers. Some of the important riders you may wish to add to your policy are critical illness rider, accidental death benefit cover etc. However, it is recommended to buy one only as per your requirement.

  • Claim Settlement Ratio: Claim settlement ratio of the company replicates the proportion of the total claims settled against the total claims raised. Higher the claim settlement ratio, higher are the chances of your claim getting fulfilled by your term insurance company. It is very important to keep a keen watch on the claim settlement ratio to ensure that your claim gets settled when the need arises. Therefore, keep this important factor in mind while comparing term insurance plans.

  • Term Insurance Company's Reliability: Before buying term insurance policy, ensure that the insurance company you wish to opt for is reliable and stable enough to develop trust among their customers. Basis the company’s reputation and the financial goodwill, you will get a clear picture of its business and the bankruptcy status. Therefore, before you buy term plan insurance online, do not forget to compare the term plan basis the insurance company’s stability.

Term Insurance Premium Calculator: Factors that Affect Your Premium

A term insurance premium calculator is a tool that helps you find out the amount of your premium that you agree to pay for your chosen sum assured under a term insurance plan. You simply choose a term plan depending on the quotes and pay the premiums. But, do you know, how to use the term insurance premium calculator?

The below mentioned factors are used to calculate your term insurance premium:

  • Age of the insured: Age is the most important deciding factor to derive your term insurance premium. At a younger age, you are less likely to fall prey to lifestyle diseases or death. Insurance company would thereby save money in the near future since the possibilities of making a claim are less.

  • Personal habits: If you are addicted to alcohol, drugs or smoking habits, your insurance company will charge you a bomb for your premium. At times, there are changes of a policy denial too. People who aren’t addicted to these habits pay almost 30 to 70% premium lower than the ones addicted to it.

  • Health record: You will enjoy a lower premium if you have not had a family history of cancer, Alzheimer’s etc. This survey is done so that your chances of falling prey to these diseases automatically reduces.

  • Tenure of the insurance policy: The term insurance premium calculator will be affected adversely if you buy a term plan that covers your retirement age as well as till you pay off all your liabilities.

  • Coverage/sum assured: It is advisable to opt for a coverage as per your requirement. The higher the sum assured, higher would be the insurance premium.

Benefits of a Term Insurance Calculator

The way you do a proper R&D before buying anything online, it does make absolute sense to run through a same research before buying a term insurance online. Here are the benefits of using a term insurance calculator:

  • The term insurance calculator will help you know the exact premium for your chosen coverage amount to safeguard your family in case of your untimely death

  • Your term insurance online shopping becomes a simple and convenient process

  • You become a well-informed customer about the market know-hows

  • You get to see plans of different insurers under one roof

  • You get to compare features and rates of different term insurance plans for the best deals ever!

  • Online term insurance is cheaper and simple to understand

How to Use a Term Insurance Calculator

  • The term insurance calculator will ask you to enter your personal details like your name, gender, date of birth, mobile number, marital status, annual income, smoking and chewing tobacco habits, your preferred cover amount and the age/period till which your policy should cover you etc.

  • Once you enter these details the term insurance calculator will give you a plethora of term insurance plans offered by different insurers. Select the buy now button on the one you feel would give you the right coverage at the right price .

  • The term insurance calculator will ask you to feed in the details of your address, nominee and finally take you to the payment gateway option

  • You can now make the term insurance payment online using your debit card, credit card or your net-banking facility .

Why Buy Term Insurance Online

Right from clothes to shoes to house-hold items we love to shop online. We like this way of shopping because we get so many choices to pick and choose from. Then why shouldn’t this be applicable to buy term insurance online too? We love exploring all the possible options. Coverfox.com offers you a plethora of term insurance plans under one roof with benefits like unbiased advice and after sales-services! Let’s have a look at the reasons to buy term insurance online:

  • Pocket-friendly: Experts say online term insurance plans are almost 40% cheaper than the offline plans. Now, who doesn’t want to save their hard-earned money? You skip all the intermediary charges like paper-cost, agent’s commission, processing fees etc. The insurance company therefore passes on their benefits to their customers.

  • User-friendly: Don’t worry if you are a newbie to the internet. Coverfox.com has a user-friendly gateway to take you through the process of buying term insurance conveniently. Comparing term insurance with different insurers would help you make a right choice.

  • Expert-knowledge: Any broker is licensed with the Insurance Governing Authority (IRDAI). They offer you the finest approach for all your needs related to insurance. Essential and top-notch services make them more reliable.

  • Back-up of your policy documents: In case you buy a term insurance plan with Coverfox.com, you can login and view your purchased term insurance policy on your online account. Besides, you also receive a soft-copy on your email address that gets saved too!

  • Reminders for renewal: Coverfox.com sends you timely renewal reminders to help you avoid from lapsing your policy.

List of Best Term Insurance Plans in India – 2018

Edelweiss Tokio Life Totalsecure Plus Term Plan

The term plan offers low-cost comprehensive coverage with 35 critical illness cover and a long-term life cover till 80 years of age. The plan offers flexibility in designing your coverage as per needs and has optional additional riders for enhanced protection.

Aviva i life Total Term Plan

The term plan gives you 4 plan options to choose your cover which suits the requirement of you and your family. The plan is packed with great features like inbuilt terminal illness benefit, accidental death benefit, maturity benefit, monthly income and many more.

Canara HSBC OBC iselect term plan

A pure protection plan that provides life insurance and terminal illness cover along with cover against accidental death/ disability, and the option to secure an income for your family even in your absence. It has 4 benefit payout options viz. Lump Sum, Lump Sum + Monthly Income, Monthly Income for a fixed term, Monthly Income till the end of your policy term.

PNB Metlife Mera Term Plan

This term plan can be customisable as per individual requirement which gives you the flexibility to choose from four pay-out options and also offers coverage for your spouse in the same policy. The plan has been designed to suit individual needs and offers enhanced protection for your family.

Aegon life iterm plan

This is an online term plan offering comprehensive insurance benefit for you and your family. The key features of the plan include low cost coverage, flexibility to increase life cover, pay-out on the diagnosis of terminal illness, additional covers for enhanced protection and many more.

Why Coverfox.com – Nominee Assistance Program

Coverfox.com is helping their customer's family at the time of claim, Coverfox.com now offers NOMINEE ASSISTANCE PROGRAM to their Term Insurance Customers.

You and your family can now be rest assured about the full end-to-end assistance throughout the claims process, and also get financial, legal and psychological counselling. All this "FREE of Cost."

We ensure that your loved ones are well-assisted with care in their hour of need.

To help the family of the life assured at the time of claim, they get:

  • Claim Assistance
  • Legal Counselling
  • Financial Counselling
  • Psychological Counselling

Remember: No Extra Cost. You or any of your family member are not charged for this service under Nominee Assistance Program.

Claim Process

In case of any uncertainties or unforeseen circumstances, the dependents as allocated by the policyholder during the policy commencement are required to file a claim. This process is simple as compared to other insurances.

Below is the claim process explained in brief:

  • Registering the claim with the insurer: The dependents of the policyholder need to intimate the insurance company about the claim. They can either visit the insurance company or contact as declared in the insurance policy document.

  • Submission of policy documents: Documents such as death certificate, original term insurance policy, proof of claim, history of medical documents etc. as per the insurance company's requirement. The insurance company may ask for additional documents too, if need be.

  • Final decision: On successful submission of the documents and verification by the insurance company, the claim will either be selected or rejected.

Term FAQs

Term Insurance FAQs

What is the right age to buy a term insurance plan?

  • There really is no right age for making an investment when it comes to Term Insurance. Like any other insurance plan, the earlier you opt for it, the better. If you do manage to buy the plan at an early age:
  • The premiums will be relatively lower. Now that's a win-win situation!
  • Your liabilities are at a low, hence you might not require to insure a big sum, which will eventually result in lesser premiums.
  • As health risks largely depend on the age, getting covered is easier and hassle-free. Who doesn't like that?

What are the things you need to know when you are investing in a term Insurance plan?

  • You take a term insurance plan with the sole purpose of ensuring that your family members are adequately supported in case of your death. In such a sensitive case, you must always weigh your options on all possible parameters:
  • Coverage: Be sure that the coverage being offered will be sufficient for your family or the nominated person. Never ever compromise on it for the sake of a lower premium.
  • Claim Settlement Ratio: The insurer's claim settlement ratio and market reputation will ensure that your claims are honored when needed, so always keep that in mind.
  • Inflation: Keeping inflation in mind, always consider how sufficient the coverage amount will be in the future.
  • Add-on feature: Always supplement your term insurance plan with suitable riders for the most comprehensive coverage.

In an unfortunate event of your death, how can your nominee claim your term insurance plan?

  • If you have invested in a Term Plan, it is advisable to keep your nominee aware of the situation so that if and when the time comes, he/she can claim the policy for which you have been shelling premium every year. To make the claim, the following steps need to be taken:
  • Every insurance company has a pre-set procedure defined for making a claim. Hence, following your death (and yeah, even though it sounds scary!), your nominee has to intimate the insurance company of the same.
  • All necessary documents including Claim Form, Death Certificate, original policy documents, hospital and medical records and bank account details of the nominee, etc. are to be submitted to the insurance company for further processing.
  • Always prefer to communicate with the insurance company through written medium like an email to maintain a track of your conversation. You never know when it might come in handy (though we hope it doesn't).

What is term insurance with maturity benefit?

Ideally, a term insurance plan with maturity benefit is different from a pure term plan. In a pure term insurance plan, if a policy holder survives the term, then he/she or even the nominee is not eligible to receive any benefit. However, a TROP (Term Return of Premium) plan does offer maturity benefits which are equal to a sum of premiums paid by the policyholder if he/she survives till the end of the term.

Do term insurance plans offer surrender value?

Term insurance plans are considered to be the ideal and the best move for securing your family’s future. While many of them prefer buying a term plan just because of the convincing power of the friend or the friend's friend who’s an insurance agent. However, at times, they end up buying a wrong plan not apt as per their requirement. This is when these people start wondering if the plan can be surrendered. In short, they wonder if they get any amount back in case they stop paying the premiums and plan of discontinuing the term insurance plan.

But, what exactly is surrender value?

Surrender value is nothing but the amount that the insured receives if he plans on discontinuing the term insurance plan before the end of the policy tem. The insurer then calculates the amount to be the paid to the insured from the start of the policy period till the termination date of the policy. Certain charges too will be deducted by the insurer from the surrender value.

Does term plan offer surrender value?

Well, not all term insurance plans offer surrender value. This is majorly applicable in case you opt for a term plan with the return of premium option (TROP). In some cases of pure term plan, if you decide to pay all the premiums under one single pay premium or limited premium payment option, you will be eligible for a surrender value.

This means, any term insurance plan with a regular annual premium payment option doesn't offer the surrender value benefit.

How is the premium decided on term insurance?

The premiums that you pay towards your term insurance policy is purely decided on factors like:

  • Your Age and Gender
  • Sum Assured
  • Health Status
  • The duration of the policy period
  • The frequency of premium payment
  • Payout opted

Needless to say, that the premium remains unchanged throughout the term of your policy. And the good news is you don't have to invest a massive amount for the premiums every year. The younger you buy a term plan, the cheaper it is.

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