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Term Insurance

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Term Insurance Plans

Things You Need to Know About Term 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.

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

The wide range of term insurance policies offered by insurance companies in India make it a challenge for an individual to make a decision on the policy that will be the best suited for him/her. Not just selecting a reliable insurance company, individuals also have to make up their mind on a term insurance from the wide array of term policies being offered by the same insurer. This makes it important for an individual looking for a term insurance policy to be aware of the parameters that he/she should consider, so that he/she can make a well-informed decision.

The core purpose of opting for a term insurance is to ensure the financial stability and security of your family in case of your unforeseen demise. Therefore, you have to make a conscious decision now, so as to provide for your family in your absence when they will need it the most. If you survive through the policy tenure, it serves as an effective investment tool for fulfilling your future plans like child’s marriage or higher education, higher education for self to improve your qualification, retirement goals, etc.

The best term insurance is one that offers the highest sum assured at the lowest possible monthly premium. This means that it is the best to start early because the younger you are, the lower will be the premium that you can avail for a high sum assured. You should keep a few essential parameters in mind to decide on your sum assured, which will be analysed by the term insurance calculator to determine your monthly premium amount.

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.

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

Plan NameOffers
Edelweiss Tokio Life Totalsecure Plus Term PlanThe 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 PlanThe 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 planA 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 PlanThis 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 planThis 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.

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.

Term Insurance Claim Process

Losing your loved ones is devastating. It causes emotional distress and prolonged suffering.

When someone is suffering through such an emotional grief, it is not easy to think of other things, for instance, financial stability or income flow, which may arise because of the unexpected death of the breadwinner.

If the breadwinner has a term plan, it is important to know how to claim the death benefit of a term insurance plan.

How to File a Term Insurance Claim in the Event of Death?

Lodging a Term Insurance Claim

The first step is to lodge a claim. The nominee/claimant must intimate the insurance company and lodge a claim on the death of the life assured. To lodge a term insurance claim, the nominee/claimant needs to contact the insurance through any of their established claim reporting channels like:

  • Visit the claims section on company’s official website for online claim intimation
  • Call the insurance company on their 24 x 7 toll-free claim intimation service
  • Visit the nearest Insurance company’s branch office
  • E-mail them on the claim intimation email id provided

Please Note: A claim will be formally accepted and registered only after the insurer receives a written request of claim settlement with a duly filled claim form and other relevant documents. One must lodge a term claim through a phone call or visiting the insurance company’s branch to quicken the claim process.

Claim Process

The claim process starts when the nominee/claimant lodges a claim with a duly filled claim form along with all the valid and supportive claim documents.

Required Documents to File a Term Insurance Claim:

In case of a natural death

  • Term Insurance policy document
  • Duly signed and filled claim forms (As provided by the insurance company - To download visit their official website)
  • Original or Copy of the Life Assured's Death Certificate
  • Claimant’s statement
  • Any other relevant document as requested by the insurance company.

In case of an accidental death

  • Police FIR report, Police Inquest Form and Final Police Investigation Report
  • Medical attendant's certificate or Attending Doctor’s Statement
  • Hospital Certificate and medical reports including admission and discharge summary of the life assured, death summary, test reports, etc.
  • Post mortem report
  • Claimant’s statement
  • Any other relevant document as requested by the insurance company

The Claims Assistance team of the insurance company will verify all the supportive documents and nominee declaration. The claimant/nominee may be asked to provide other additional documents if necessary.

Approval of Filed Term Insurance Claim and Payouts

Once the insurance company verifies all the documents and accepts the claim, the pay-outs to the nominee will be made as per payment options mentioned in the term plan.

The pay-outs to the beneficiary are usually through ECS, for which, the nominee must submit the bank details – cancelled cheque/photocopy of the bank account passbook (may require to get attested by bank authorities).

Other Important Things Related to Term Insurance Claim Process

  • In case, the nominee dies along with the life assured, the pay-out is made to the next legal heir.

  • In case, the nominee dies before life assured, the policyholder needs to appoint another person as the nominee before the term plan expires.

Please Note: Kindly read the "Exclusions" as mentioned in the policy wordings/document before filing a death claim as it will help you to file a death claim under a term plan without any difficulty.

Term Insurance Faqs

Before buying a term insurance plan, it is crucial that you understand how it functions and what you need to do to make the most out of it. Here is a look at some of the frequently asked questions about term insurance plans and what they have to offer.

Frequently Asked Questions

Q. Can I change the duration of life cover after the policy is issued to me?

The duration of life cover cannot be changed once the policy is issued.

Q. Will my premium amount change during the tenure of the policy?

Once the policy is issued to you, the premium amount stays the same throughout the entire tenure of the policy.

Q. Does term insurance cover accidental death?

Yes, term insurance pays when there is an accidental death claim.

Q. How long do term insurance policies last?

Most term life insurance policies provide cover until the policyholder reaches the age of 60 – 80 years.

Q. I am an occasional smoker. Do I need to still declare myself as a tobacco user?

You may be an occasional smoker, but if you have smoked in the last 12 months, then you must declare yourself as a tobacco user. If information is withheld and later revealed to the insurer, there are chances that they may charge an increased premium amount. There is also the possibility that the policy may be considered null and void, and the company may deny the policy benefits.

Q. Can we claim term insurance from two companies?

Yes, you can claim term insurance from two companies, provided you have disclosed complete details of the previous policy to the other insurer, from whom you have taken the second policy. This is beneficial in case one company rejects the settlement claim, as you have a second option for making a claim settlement.

Q. Which term insurance plans provide coverage up to 100 years?

Bajaj Allianz Life Secure, HDFC Click 2 Protect 3d Plus and Aegon Life iTerm are few of the term insurance plans that provide coverage up to the age of 100 years. PNB MetLife Mera Term Plan offers users coverage up to the age of 99 years. It must be noted that while the maximum age for which coverage is provided by the above term insurance plans is similar, their features, benefits and costs differ.

Q. What should be the duration of a term insurance cover?

The duration of a term insurance plan should be determined mainly on the basis of when one thinks it is possible to achieve life’s major financial goals. If an individual can accomplish that in, say about 10 years, he or she can opt for a policy period of 10 years. Another factor that users need to keep in mind is the existing liabilities (in case there are any). If the individual has a home loan for 20 years, then it is recommended that the duration of the term insurance cover be at least 20 years.

Q. How Does a Term Plan Work?

A term insurance plan is the purest form of life insurance product. It offers high sum assured at a low premium. The life assured is covered against the risk of an unexpected death (natural or accidental death) during the policy period. In case the life assured passes away during the policy period, the insurance company pays the life cover amount (sum assured) to the nominee as mentioned in the policy document.

The payout of the sum assured is based on the type of payout option selected at the time of purchase of the term plan. The payouts can be a lumpsum payout, lumpsum and monthly income payout, or monthly income payout as opted at time of buying.

Payouts

  • Lumpsum

The sum assured is paid out as a one whole amount in 'lump sum' to the nominee of the policy.

Example of a Lumpsum payout Term Plan:

Sum Assured – Rs.1 crore Payout – Rs.1 crore (all at once) as a death benefit)

  • Lumpsum + Monthly Income

Example if a Lumpsum + Monthly Income Term Plan:

Sum Assured – Rs.1 crore Payout – Rs.50 lakh (at once – at the time of death claim) and Rs. 50,000 every month as a death benefit)

  • Monthly Income or Income Replacement

A percentage of the sum assured is paid in monthly installments regularly from the first month of the occurrence of death.

Example of a Monthly Income Term Plan:

Sum Assured – Rs. 1 crore Payout – Rs. 1 lakh every month (Rs.12 lakh annually) for 83 months (approximately) as a death benefit.

Q. Who Should Buy a Term Plan

Ideally, everyone should buy a term plan. However, if you are the sole breadwinner or are contributing to the family's income, then you must purchase a term plan. Nevertheless, the below mentioned people should definitely buy a term plan:

  • If you are financially independent and wish to provide financial security for your family
  • If you are the sole breadwinner in the family
  • If you have dependents – parents, spouse, etc.
  • If you are a single person who is planning to start a family
  • If you are running a business or a startup
  • If you have children and wish to secure their future even in case of your absence

Anyone and everyone one who does want to see their loved ones struggle to maintain their standard of living after the loss of the earning family member must buy a Term Insurance Plan. It is most apt for people falling under the below mentioned profiles.

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