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With 25 insurers and 100+ products to choose from, Coverfox works actively to find a plan that is ideal for you—basically, the best one, the right one. From providing you with all the right information to offering unbiased comparisons, we do it all. Hey, you don't even need to engage with the insurer yourself.
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The sum assured is paid out in one whole 'lump sum' to the nominee of the policy.
A percentage of the assured sum is paid in monthly instalments from the first month of the death.
Life is too unpredictable and uncertainties can rip you off emotionally, financially and physically too. This is because no one has control over one’s death, neither, can anyone predict it. Death of the breadwinner of the family can ca¬use disastrous turbulences in the family member’s life.
To find solutions for these problems, term insurance plays a vital role in your life. Moreover, term plans are an excellent way to build a financial safety net and are the most simplest and affordable type of life insurance. It will help your family to settle your loans and pay-off certain requirements in your absence. The death benefits are paid to the beneficiary or the nominee only upon the insured’s death. Therefore, in simple words, the death benefits are zero if the insured dies after the policy is expired.
The premiums that you pay annually towards your term insurance policy are purely decided on factors like your health, age, death benefits of the policy, the duration of the policy period, etc. 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 huge amount for the premiums every year. The premiums hardly work up to Rs. 10,000 p.a. approximately.
The moment you start paying your premiums regularly, the insurance companies also start deducting its expenses, cost of the death benefit and the taxes on the premiums.
The cash value buildup for term insurance is zero. Therefore, the values of the pure insurance coverage or the death benefits also remain unchanged throughout the policy period.
If you pass away during the policy period, then the insurance company pays the death benefit to your nominee or the beneficiary as mentioned in the term insurance policy.
However, if you outlive the policy beyond the policy period, the coverage becomes zero and neither you nor your nominee gets any benefit from the insurance company. You may renew the term insurance, but definitely at a higher premium due to increasing age.
Financial Security: Benefit to the nominee for a secure financial future
Low premium: An attractive premium for a higher sum assured
Smoker’s included: Even those with tobacco-chewing and smoking habits can opt for term plan. No one discriminates or judges that way.
Tax Exemption: The premium paid is also exempted from taxation up to a maximum of Rs.1.50 lakh under Section 80C of the Income Tax Act, 1961.
Higher sum assured for lower premiums: The premiums charged are inexpensive and the sum assured offered is high.
Choice of plan: The term plan can be bought as per your choice by comparing quotes, benefits and features of different insurers
Death Benefit: The beneficiary receives a lump sum amount on the demise of the policyholder incase death during the policy period.
It is very important to analyze your needs before you finalize on a term insurance plan. This is because there are so many different types of term plans available in the market. You can get in touch with Coverfox.com for our unbiased advice and quick resolutions for your financial planning. Below are the different types of Term Life Insurance plans available:
Standard Life Term Insurance plan is the most commonly found types of term plan made available in India. The life cover, as well as the premiums you pay annually does not change during the entire policy period. The most common terms available are 10, 15, 20 and 30 years. This is one of the most regular types of term insurance available in the market.
Decreasing Term Insurance cover is being structured in such a way that the cover as well the premium keeps reducing as when the tenure of the policy decreases. Mostly, banks and financial institutions covering major risks against housing loan, mortgage or liabilities etc. opt for this type of term plan. During any uncertainty, the insurance companies ensure that the funds are paid back to the bank or financial institutions.
Increasing Term Insurance cover is equally opposite to the Decreasing Term Insurance. Here, with the increasing age, the life cover also tends to increase. This type of a term plan is usually dependent upon inflation and therefore has been structured keeping inflation in mind. You can lower your stress of remaining underinsured by purchasing this type of term plan. Your life cover increases at a predetermined rate in this plan.
Return of Premium Term Insurance is another type of term insurance wherein the insurer pays back all the premiums paid by you every year on the expiry of the insurance policy. But again, to reap this benefit, you need to survive too. For example, if you pay Rs. 7,000 p.a. for 25 years for a cover of Rs.50 lakhs, you would get an amount of Rs. 1,75,000 (exclusive of service tax) only if you survive the policy period. The premiums here are usually higher than the other types of term plans.
Do keep in mind the below parameters while you gift yourself the best term insurance plan.
So you have already built up a big mountain of housing loan, car loan, business loan and a mortgaged property too. Little did you know how your beloved family would cope-up with these outstanding debts that you have left and gone forever? Therefore, go online and compare quotes from different insurers to narrow down your search and buy a policy that would pay off your debts once you are gone.
Imagine you are the sole earner of your beloved family and some unforeseen situation arises. How would the income be replaced due to loss of regular income? How would this gap be met? Therefore, compare the quotes of different insurers to get a better idea of the sum assured to maintain the lifestyle of your family members in your absence.
Keep in mind the expenses related to medical, funeral and the final rites that would be an additional expense to your family members. A term plan that covers the funeral expenses right till the burial would be an apt policy to opt for.
Always keep a track of inflation while you narrow down your search for a particular term plan. This is because not always will an amount be sufficient after a couple of years that you feel at the moment. For example, the proceeds might take a couple of years in case you have young dependent children. Therefore, reviewing your coverage is extremely important. You can do so by comparing quotes from different insurers.
Term plans are structured in a specific way to protect your family from the financial crunches that may arise once you are gone. The below are some of the key features of a term insurance plan:
Policy term: So, the good news is that you have a choice to choose your policy term. For example, for a regular term plan, the minimum term is 5 years while the maximum may vary up to 25 years. Whereas the policy term would range from 5 to 15 years for policies with a single premium payment. It is advisable to opt for a longer term policy since the premium remains unchanged for the entire policy term.
Entry & exit age: The minimum entry age to qualify for a term plan is 18 years while the maximum age (exit age) is 65 years. You can also opt for riders that may enhance your term plan. It is advisable to buy a term plan at an early age since the premium tends to increase with growing age.
Plan choice: You have full leverage to choose the plan you wish for. For example, if you are the only breadwinner of the family, then you opt for a single life basis term plan. However, if you wish to cover your spouse too, then you may opt for a joint life basis term plan. Most of the insurers offer term plan on the first claim basis. Which means, the beneficiary would get the death benefit on the demise of either of the two insured.
Tax benefit: The premium paid is also exempted from taxation up to a maximum of Rs.1 lakh under Section 80C of the Income Tax Act, 1961. Not only this, you can also avail tax benefits under Section 80D against the premiums paid for critical illness benefit.
Death Benefit: During an uncertain event like death of the insured, the insurance company would pay a lump sum amount, a monthly payout or a combination of both to the beneficiary or the nominee as assigned during the commencement of the term plan. This amount is termed as the death benefit.
Additional riders: Additional paid benefits like critical illness rider, hospital cash rider, waiver of premium rider, accidental death benefit rider, total and permanent disability benefit riders etc. can be bought by paying an extra amount. These riders are add-ons that may enhance your term plan. However, it is advisable to opt for riders after analyzing your requirement.
|Plan||Entry Age (Min/Max)||Claim Settlement Ratio (2015-16)|
|Bajaj Allianz iSecure Online Term Plan||18/60 years||91.30%|
|Aegon Life iTerm Insurance Plan||18/65 years||95.31%|
|ICICI Pru iProtect Smart Term Plan||18/65years||96.20%|
|Canara HSBC OBC eSmart Term Plan||18/70 years||92.99%|
|Kotak Preferred Term Plan||18/65 years||89.09%|
|LIC eTerm Plan||18/65 years||98.33%|
|PNB MetLife Mera Term Plan||18/65 years||85.36%|
|Max Life Super Term Plan||18/60 years||96.95%|
|SBI Life eShield Term Insurance Plan||18/65 years||93.39%|
Like any other insurance, term insurance has its limitations for specific circumstances. Mentioned here are some common exclusions that a term insurance would not cover.
Suicide: This is one of the common exclusions that most of the insurer’s would not cover. The dependents would not get any compensation if the insured commits suicide in the first year of the policy. But, suicide won’t be compensated at all in a group insurance policy.
Dangerous activities: Death due to race car driving, SCUBA diving, rock climbing, etc. are not covered under a term plan. In simple terms, if you were involved with these dangerous activities, then your beneficiary would not get any compensation during any uncertainties.
Act of war: Any death occurred due to acts of war or due to natural calamities like drought, floods, earthquake, etc. are not covered under a term plan.
Drugs abuse or alcoholism: Any death occurred due to consumption of alcohol or drugs is not covered under a term plan. The insurance company would not be liable for any compensation to the dependents.
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.
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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:
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: