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We must keep our family financially safe and secure and this can be achieved by taking one important step by investing in a Term Insurance Plan. Taking a term insurance plan is a wise decision towards protecting your loved ones. The novel Coronavirus has taught us the importance of term insurance the hard way and this has led many people to take term life insurance. Now it’s your turn to take a small yet crucial step to get yourself and your family a secured future.
Term insurance is a smart, affordable way to protect your family and be prepared for the unexpected.
Points to remember
Understanding Term Insurance
Term insurance is a type of life insurance where the policyholder gets coverage for a specific period by paying premiums regularly. In case of any unfortunate event like the demise of the policyholder when the policy is still active then the sum assured or the death benefit will be passed on to the policy nominee. The term insurance provides higher attractive coverage at a lower premium rate, making it a very popular plan.
For example, if Mr Rex has insured himself for 40 years and if he dies in the 37th year, then his beneficiary will get the death benefit as per the policy terms.
If the person is the sole bread earner of the family, unfortunate events like death can hit hard on the financial status of the family which is why term insurance is necessary. The term insurance can provide some income during the time of crisis.
Benefits of
Buying Term Insurance
Term insurance is popular because it is one of the most economical forms of insurance. The plan can become very economical when bought online as these platforms give you exciting offers and discount coupons as compared to offline platforms. Don’t miss this opportunity and avail of this special offer to lower your term insurance premiums.
Term insurance plans provide significantly good life cover plans than other traditional plans available. The term insurance plans provide a much higher sum assured, but with a considerably low premium amount. This way you can be relieved that you are leaving your family enough money so that they don’t go through financial hardships in your absence.
Every layman can understand the basics of term insurance plans. The simplicity of the plan is the reason for its gaining popularity among people. It provides 100% life cover to the policyholder. All you need to do is pay the premium on time and reap the benefits.
Avail tax benefits of Term insurance plans. Tax benefits can be availed under various Sections as per the Income Tax Acts.
- Section 80 C: Section 80C allows a tax deduction of up to 1.5 lakh per annum for term life insurance premiums.
- Section 10(10D)D: According to Section 10(10D) if the policyholder dies the beneficiary who gains the death benefit is completely tax-free. According to the tax laws Section 10(10D), the insurance benefits obtained by the nominee are fully exempt from taxes.
- Section 80D: Under this Section, 80D the insured avails a tax benefit to the premium paid for health-related coverage plans. These coverage plans include Critical Illness Rider, Hospital Care Rider, Surgical Care Rider, etc., which acts as an add-on coverage in term insurance.
The term plan not only offers a life cover but also protection against critical illness. A small amount goes for an add-on to avail of this critical illness benefit. If the policyholder is diagnosed with any critical illness like kidney failure, heart attack, cancer, etc., then the insurance company provides a lump sum amount to the insured. Protecting Your Liabilities:
The term insurance also safeguards your liabilities like a car loan, house loan etc. In case of an insured person’s demise, the term insurance will support the family financially by replacing the insured person income.
The term insurance can either be paid in a single premium payment or you can on a monthly, semi-annual or yearly basis.
The add on benefit also covers in case of accidental death or accidental disability wherein an additional sum insured is provided. This benefit can be availed by paying a small add on premium with the regular premium.
In the unfortunate event such as a mishap of the insured within the term of the policy, the nominee(s) receive the sum assured amount. Some life insurance companies allow changing the nominee name multiple times.
A normal term insurance plan does not provide any benefits on the maturity of the insurance policy. However, now several insurance companies have tweaked the term plans to provide some maturity benefits. These plans on maturity would pay you back the entire premium amounts if the insurer sees through the policy term. This benefit can be availed as an add-on feature called the TROP or Term Return of Premium.
Requirement
Who Should Buy Term Insurance?
Let us take an example and compare two scenarios to understand the concept better.
There are two people in this scenario Mr A and Mr B. Now
Mr A
has two retired parents, has a spouse who is a housewife and also has two children.
He is the only bread
earner in the family and the family is dependent on his income. He has a lot of responsibilities including
a home loan of 80 lakh rupees.
Mr B. is alone, is not married, and has parents who are not dependent on him.
He also has a good income of more than 2 lakh per month.
Now, who do you think requires term insurance.
It is Mr A who has more responsibilities and need life protection,
with affordable premiums and also a tax saver plan.
- The person who is the sole source of income in the family must have insurance. Parents who have dependent children must have term insurance since the children's educational needs are fulfilled by the parents. It is important to get insured in case of any mishap of the parents the insurance policy will payout a lump sum amount or as an income to protect the children financially during the crisis
- A person who does not have any investments or corpus must have a term insurance
- A person who has liabilities such as a home loan or car loan, etc., must have term insurance as it will protect such liabilities.
- Married couples should get insurance since the spouse will be dependent on her husband's income. By taking the insurance it will secure her future
- In case a woman is the sole source of income in the family she will have lots of responsibilities that can be taken care of by taking insurance. This will ensure that the family continues to live in peace even in the absence of the insured person
- Retired people also need term insurance if the wife and children are still dependent on them.
- If a person wishes to save taxes then this is the best option as it saves tax and also provides other benefits. The premium amount paid is exempt from tax under Section 80 C.
Timing - sooner the better
What Is The Right Time to Buy Term Insurance?
It is best to purchase the insurance as early as possible as the premium amount will be lesser. Once you grow older in your life maybe 40 - 45 years people might start getting attracted to certain lifestyle diseases or age-related diseases. In this case, your amount of premium will be higher. So it is necessary to be insured as early as possible when you are healthy, fit and fine so that the premium amount will be lower. This will provide extensive coverage and financial stability to your family and dependants at an early age.
Why Having Insurance at an Early Age Is Important?
Let us understand this concept better with an example. Assume that you are 20 years old and you purchased term insurance at this age and your premium amount is Rs. X. You have insured yourself for 30 years until the age of 60. The premium amount at the age of 20 and your premium amount at the age of 60 will remain the same. That is why it is better to be an early bird.
choose wisely
How Much Insurance Cover Should You Opt For?
There is no hard and fast rule that this should be the exact amount as the insurance cover, but as a thumb rule, on average it should be a minimum of 10 times your annual income. So for example, if you earn RS. 10 lakh per annum then your insurance cover should be a minimum of Rs. 1 crore. And the optimal insurance cover could be 15 to 20 times your annual income. To dive deep into the topic we need to understand the factors required to calculate the amount of insurance coverage that an individual may require.
Based on Monthly Income
The insurance amount is purchased to replace the income of the breadwinner of the family in case of an unfortunate mishap. So the amount of insurance cover is calculated based on the monthly income of the policyholder. For example, if a person earns Rs. 10 lakh per annum then the insurance cover is calculated as 10 lakh * 20= Rs. 2,00,00,000. So in absence of the policyholder, the nominee will receive this amount as a monthly payout in replacement to the policyholder's income.
Based on HLV
This calculation is based on the Human Life Value which tells the present value of future expenses, liabilities and other investments. The HLV is calculated to determine how much money you require to secure the financial status of your dependents with term insurance coverage in your absence. The HLV takes into account various factors like occupation, age, gender, retirement age, expenses, investments, income, etc, to determine the insurance coverage amount.
Based On The Assets And Liabilities
To calculate the sum assured it is important to consider the present and future loans of a person like car loans, house loans, educational loans, and EMI of the person.
Why choose us?
How and Why to Buy Term Insurance at insurejoy.com?
You have two options in hand if you have decided to buy term insurance one is offline mode and the other is online mode.
If you are willing to purchase offline you will have to first approach an insurance agent. The agent might charge some per cent of commission which, is a disadvantage in the offline mode. The premiums in offline mode are a bit higher than the online premium.
If you choose to buy insurance in online mode it is quite simple, affordable and hassle-free. The steps involved in buying term insurance are;
- Fill in some basic information and answer few basic questions
- After giving the information you will be redirected to a page that displays several insurance plans that best suits you
- You have various options to choose from different plans
- Look for a high claim settlement ratio. If the claim settlement ratio is higher then it proves that the insurance company has been genuine and quick in settling the claims
- If necessary choose a plan with additional rider’s benefits like an accidental cover, critical illness cover, etc.
- The best thing is you have many insurers available in one place which makes it easy to compare which one suits you the best
- At insurejoy.com you have experts assistance online and they are just one call away to help you with the entire process
Features of
Term Insurance Policy
Free Look period - The insurance companies provide a freelook period for a new policyholder wherein the insurance can be terminated without any penalties. Generally, the free look period is 15 days when bought offline and 30 days when bought online. You can cancel the policy within this free-look period which, is 15-30 days from the day of purchase.
Protects Liabilities - The sum assured that is received from the term insurance can be used to secure your family’s financial status by protecting them from the debt liabilities like mortgage, loans and EMIs.
Tax - Tax benefits can be availed for every term insurance plan which is an added advantage.
Flexible-Premium Payment Option - The term insurance premium can be paid either as a single payment or monthly, quarterly, or annual payment.
Flexible Sum Assured - The sum assured amount can be increased or decreased as per your financial convenience.
Payout Options - The payout options can be a lump sum one-time payout or fixed monthly payout.
Compare and choose
Types of Term Insurance Plans
Term insurance plans are classified into 6 different types based on the sum assured coverage and the benefits they provide.
It is the basic and traditional type of term plan that one can buy. Here the sum assured is fixed and the policyholder has to pay the premium amount for the entire term of the plan. If the policyholder dies before the completion of the policy tenure, then the nominee will receive the entire sum assured.
Unlike the traditional term insurance plan, this Plan comes with maturity benefits wherein the policyholder receives the money if he/she survives the policy tenure. This plan is widely popular but it costs a little extra premium.
In this term plan, the premium amount is low as the sum assured keeps decreasing with every passing year. This type of plan is bought if the policyholder has taken huge debts. As years pass by the debts get paid off from the policyholder's income, hence the need for sum assured keeps decreasing. In case of any unfortunate event such as the death of the policyholder during the policy tenure, then the insurance money is passed on to the nominee who can use the sum assured to pay off the debts.
Unlike the decreasing plan, this pan is quite opposite where the sum assured keeps increasing every year. This type of insurance plan is useful for larger future expenses like marriages and higher studies. The insured person can increase the sum assured annually during the policy period, but the premium amount may or may not vary based on the type of insurance company.
This is a type of plan that allows the policyholder the option to convert their basic term insurance into any type of plan in the future. The policyholder can change their term plan into a whole life insurance plan or invest in an endowment policy, after spending a stipulated amount of time.
Eligibility criteria
To Buy Term Insurance
The eligibility criteria may vary from different term plans. An approximate value of the eligibility criteria is given below
| Minimum Entry Age | Maximum Entry Age | Minimum Policy Tenure | Maximum Policy Tenure |
|---|---|---|---|
| 5 years | 65 years | 5 years | 100 years |
Factors Affecting
Term Insurance Premiums
Various factors affect the term insurance premium amount.
The Policy Tenure
is the number of years for which a person will remain covered. Longer tenure results in higher premium which is more beneficial & economical since you are paying it for a long time. Shorter-term plans might seem cheaper, but they have less benefits.
Sum Assured
The sum assured is the total value of the insurance policy at the time of purchase. It is the amount paid by the insurer to the nominee under unfortunate events like death. Policy with a higher sum assured will have a higher premium.
Add-ons or Additional Riders
A pure and standard term insurance policy offers only the sum assured. But additional features Like waiver of premium, accidental cover, critical illness cover, permanent total disability cover, income protection benefit etc. can be added as add-ons. Having add-ons will cost you a higher premium.
Age of the Insured
Age is an important factor affecting term insurance premiums. The younger you are the premium amount will be lower. As the age increases the premium amount starts rising.
Gender of the Insured Person
The gender of a person also affects the premium. Insurance companies have placed a criterion wherein the females are charged a much lesser premium than males.
Smoking and Drug Abuse
Certain lifestyle habits like smoking, use of tobacco products, excessive alcohol drinking, drug abuse decreases the life span of a person. These habits can lead to a higher premium amount
Personal & Family Health Status
Your health condition can affect the premium amount. A person with medical history will be charged a higher premium than a healthy person with no ailments. Any pre-existing diseases like diabetes, obesity, blood pressure, asthma, etc, will affect the premium rates. Family medical history is also considered a premium affecting factor. Sometimes an insurance company takes into account certain family hereditary diseases like diabetes, heart problems, cancer, etc.
Payment Type During the Claim
Another factor is the payment type. There are two types of sum assured payment options for a policyholder one is a lump sum one-time payment and the other option is dispersing the amount and getting paid on a monthly or yearly basis. This type of plan will turn out to be like a stream of income for the beneficiary.
Occupation of the Insured:
Occupation of a person also affects the term insurance premium of the insured person. If the nature of the job is too risky then the insurance premiums will be higher.
Quick Look at
Best Term Insurance Plan for 2023
With a plethora of options available in the market, it is difficult to choose the best suitable plan. WE at Insurjoy have made your work easier by comparing some of the best plans that come from reputed companies.
| Term Insurance Plans | Entry Age (yrs) | Policy Term | Maturity Age (yrs) | Claim Settlement Ratio | Benefits |
|---|---|---|---|---|---|
| HDFC LIFE Click 2 Protect 3D Plus Term Plan | 18 - 65 |
Min- 5 yrs Max- 40 yrs |
85 | 98.01% |
|
| ICIC Prudential iProtect Smart Term Plan | 18 - 65 |
Min- 18 yrs Max- 60 yrs |
85/99 | 97.8% |
|
| Max Life Smart Term Plan | 18 - 65 |
Min- 18 yrs Max- 60 yrs |
75/85 | 99.22% |
|
| Bajaj Allianz e Touch Online Term Plan | 18 - 65 |
Min- 18 yrs Max- 65 yrs |
99 | 98.48% |
|
| TATA AIA Maha Raksha Supreme | 18 - 65 |
Min- 28 yrs Max- 85/100 yrs |
85/100 | 99.06% |
|
| SBI Life E Shield Term Plan | 18 - 65 |
Min- 18 yrs Max- 65 yrs |
100 | 96% |
|
| LIC Tech Term Plan | 18- 65 |
Min- 28 yrs Max- 80 yrs |
80 | 98% |
|
| Aegon iTerm Insurance Plan | 18 - 65 |
Min- 18 yrs Max- 65 yrs |
70 | 98.01% |
|
Why Choose us?
Benefits of Buying from insurejoy.com?
insurejoy.com helps you to search, compare and purchase insurance plans all under one roof. You will not have the necessity to look further once you reach insurejoy.com. insurejoy.com will be your best term insurance partner.
- insurejoy.com has a directory of all insurance plans available in the market
- It provides constant assistance 24*7 through e-mails, chats and mobile calls
- We provide comparison and guidance to buy the best insurance plan that best suits you
- We have a secure mode of payment gateway that is reliable and safe
- We guide you over every step from choosing the right plan to documentation filing
- We provide you with the best online insurance portal that is user friendly and helps to derive the best insurance plan within few minutes
- insurejoy.com offers you complete support even after the policy is bought. We have a dedicated team at Help Desk who will continue to support you with all services required
- We have a detailed product description page to get a better understanding of each insurance product you are looking for
Things to remember
How Renewal of Term Insurance Policy Works?
To continue the benefits of the term insurance plan you need to renew the policy by paying the premium amount called “Renewal Premium Payment”.
- You can decide the renewal time of your policy premium during the purchase of the policy
- Payments have to be made before 3.00 pm. If it is made after 3.00 pm then the Premium Paid Certificate will be received the next day
- You will receive the premium payment receipt one day after the premium due date. The receipt can be used as payment proof to avail of tax benefits
- Policy premium has to be paid within the due date. . If you fail to renew within the expiry date he/she will be provided a grace period of 30 days. If you fail to pay the premium within the grace period, then your policy will lapse and the benefits will be stopped
What Is The Right Formula
To Create The Ideal Insurance Plan?
It is important to choose the perfect plan for an individual but with a plethora of benefits available, it might be overwhelming to choose the right plan. We at insurejoy.com will help you choose the right plan based on the following criteria
Sum Insured Factor:
The premium amount of your policy depends on the Sum Insured amount you have selected. Keeping economic inflation in mind it is necessary to select the maximum sum insured at the best premium rates.
Good Financial Stability:
Check the ratings of the insurance company at CRISIL. The insurance company that has an AAA rating is considered to be a financially sound company.
Claim Settlement Ratio:
Check the claim settlement ratio of an insurance company. The claim settlement is the most important process which should be quick and hassle-free.
Customer Service and Reviews:
Read the customer reviews and comments of the company to get an idea about their customer support.
Choose a plan that covers Riders Benefit:
The riders benefit provides coverage for critical illness and accidents. The riders benefit is an add-on benefit and comes with an additional cost. Most of the insurance companies include the riders coverage as an in-built benefit i.e. it comes with no additional cost.
Compare each plan thoroughly:
A comparison of plans gives you a better idea to choose your ideal plan. We at insurejoy.com make this process easy by providing a detailed comparison of the best plan available in the market.
In case of claim
Claim Process for Term Insurance
You need not worry about the claim process as insurejoy.com is with you at every step. We are here to guide you during the claim process and make your work easier. insurejoy.com is your No. 1 trusted partner when it comes to providing any services related to insurance.
Steps Involved in Claim Process
Immediately intimate the insurance company or at insurejoy.com about the demise of the policyholder through the contact number provided on the company website or in the policy documents
A claim form will be provided by your insurance company which has to be duly filled and sent to the insurance provider
Submit the claim form along with the original policy documents and death certificate to the insurance office
The nominee will receive the insured amount within 3 to 4 months from the date of claim.
Points To Remember During the Claim Process
The claim form will be sent to you only if the insurance provider is intimated about the death of the policyholder or maturity of the plan
The claim settlement formalities and the document process will vary from one insurance provider to other
The sum assured amount received as a lump sum is tax-free
Before settling the claim the insurance company will run an investigation to find if the details furnished by you are genuine
The sum assured amount will be provided to you by the insurer via cheque or by direct payment online to your registered bank account
Documents Required
To Buy Term Insurance
While purchasing the term insurance certain documents are required to submit. The following documents to be submitted are discussed below.
Document Needed
- Passport size photographs
- Copy of Voter’s ID
- Copy of Driving Licence
- Copy of Aadhaar Card
- Any Personal Identity Proof with photograph attached to the ID: Aadhaar, Passport, PAN, Voter’s ID, Driving Licence
Any One of these Document Needed As Address Proof
- Any recent utility bills that are not older than 2 months like electricity bills, telephone bills, post-paid mobile bills, water bills, gas bills can be provided
- Property tax receipt provided by Municipal Corporation
- Bank account Statement or Savings account statement of Post office
- Any family pension order issued by the Government of India with the applicant's address
- Accommodation allotment letter provided by an employer which is in turn issued by State or Central Government departments, any Regulatory bodies, Public Sector companies, Commercial banks with scheduled status and any financial institutions.
Documents for Income Proof
- Latest salary slip
- Recent Bank statement
- Form 16
- KYC related documents have to be submitted
Modes of Submission
The mode of submitting these documents is quite easy through an online portal.
- You can WhatsApp the documents to the insurejoy.com team and they will upload the documents to the required insurance portal.
- You can upload the documents directly by logging in to the insurance portal
- You can also opt to scan the documents and send them via e-mail provided by the insurance company
- You can opt for the offline mode by directly visiting your nearest insurance branch and submit the documents directly in the office or you can send the documents hard copy to the insurance office through a courier
Additional Documents
Depending on the insurance company and the type of term insurance plan taken the insurer might ask for some additional documents like medical reports. If you have undergone any surgery or underwent any medical procedures in the last few years then the insurer might ask to submit the medical records, diagnosis document, discharge letter.
Some insurance companies might ask to take a Full Medical Examination before issuing the policy. In this case, the insurance company will fix an appointment with the hospital at your convenience and take care of the medical expenses. The medical report will be directly sent to the insurance company.
The documentation process is very important and should be very precise. It is necessary to disclose every minute detail about your health because 2% of claim applicants are rejected every year due to information mismatch. Clarify any doubts directly with the insurance company to avoid confusion.
Important Tips
To Buy Term Insurance
insurejoy.com is your best comparison engine when it comes to comparing insurance policies, as it gives you enough choices on Term Insurance plans. Details about every online term plan are at the tip of your fingers. This helps you to make an informed decision when it comes to a term plan.
We are providing you with some significantly important tips to buy online term insurance, which will save your money and help you get the best plan as well.
1) Life Cover
Your insurance plan should provide the family with enough sum assured amount to take care of major financial expenses like marriages and higher studies of kids, in your absence. Choose a plan that provides maximum coverage for you and your family.
2) Premium
It is best to choose a plan that offers you maximum sum assured at reasonably fair premiums to make it economical. Keeping in mind the increasing inflation it is best to get a maximum sum assured coverage. This may cost some extra premium but the benefits are more. Choose a plan where the premium remains unchanged throughout the term.
3) Add-ons (Riders)
Choose a plan with riders benefits like accident cover, critical illness cover etc. Some insurance companies provide zero additional charges for these benefits but it usually comes at an economical cost. It provides all-around life coverage and financial security.
4) Flexibility
Choos a plan which provides the flexibility of either increasing or decreasing sum assured as per your convenience. Let's say you can increase the sum assured in case of higher studies or marriage and decrease the sum assured if you need to pay the debts.
5) Ease of Dealing
Always choose a plan where the insurer is from a reputable company. After purchasing the plan, all your further interactions are going to be with the customer service department of the insurance company, so make sure that they are professional enough to cater to all your requirements. insurejoy.com also offers the added advantage of helping you in various service-related matters since we have a dedicated help desk.
insurejoy.com is always here to help you make the best decision. Start your comparison on Term Insurance now!
Understanding the working
How does a Term Insurance Plan Work?
- Once you purchase a term insurance plan the insurance provider gets into an agreement with the policyholder
- In case of the unfortunate demise of the policyholder during the tenure, the insurance provider pays the death benefit to the beneficiary as mentioned in the policy document
- The type of payout option is chosen by the policyholder at the time of purchasing the policy
Payout Options:
There are 3 types of payout options available in the term plan. You can choose your convenient type.
- Lump-Sum - Here the death benefit is paid to the beneficiary at a single lump-sum payment
- Lump-Sum with Monthly Payment - Here half of the sum assured is paid as lump-sum and the other half is paid as monthly income regularly
- Monthly Income - Here the death benefit is received as a regular monthly income from the first month of the claim being made
Frequently Asked Questions
If your claim gets rejected even after submitting the documents properly you should immediately contact directly to the insurance provider and seek help.
You should choose a policy term that extends up to your retirement age. For eg: If you have purchased a plan when you were 35 and you are going to get retired at 60 then your policy term should be for 25 years.
The premium flexibility varies according to the plan. The premium is not fixed for term insurance.
If you have undergone any medical procedures and have any medical condition then it is mandatory to disclose such information and submit relevant documents.
Though some companies say the medical test is not mandatory it is recommended to give a medical test to avoid rejections at the time of claim.
Certain medical conditions like high blood pressure, high cholesterol, obesity, cancer, diabetes.
The mode of payment is either through cheque or through electronic transfer to your registered bank account. The death benefit is not paid by cash.
If you have opted for a pure term plan and you survive through the entire term plan you will not get the benefits. But if you have opted for ROP benefits in your term plan you will get the benefits at the end of the policy term.