Life, as we know, is full of uncertainties. And to keep ahead of them, you need to plan ahead. Term Plan is a pure life insurance Plan that offers you comprehensive and affordable coverage for a limited period of time to suit your needs.

The sole objective of Term plans is to serve the protection needs of the customers and by doing so, safeguard one’s family from the financial implications of unfortunate circumstances that one cannot foresee. If the insured dies during the term, the death benefit will be paid to the beneficiary.

What is Term Insurance?

Term insurance is a type of life insurance that provides coverage for a specific period of time or years, i.e., a term. This type of life insurance provides a financial benefit to the nominee in case of the unfortunate demise of the insured during the policy term. A term insurance policy provides high life cover at lower premiums. These fixed premiums can be paid at once or at regular intervals for the entire policy term or for a limited period. Premium amount varies basis the type of the premium payment method opted by the buyer.

Why do I need term life insurance?

To Safeguard Your Family's Future: As a breadwinner, it is important for you to ensure the well-being of your spouse, parents, and children. Term insurance can help you do this. This financial tool can offer your loved one’s financial security in your absence and help them cover their essential needs.

To Protect Your Assets: You may have taken loans to buy a house or car. The obligation to settle these loans will fall on your family after you. Term insurance offers your family the financial support they need to repay your outstanding debt. Not only does the insurance payout help them pay your dues, but it also ensures that the assets you have worked hard to build and acquire are protected and available for your family.

To Reduce Lifestyle Risks: The mental and financial strain of losing a loved one can be hard on a family. Dealing with loss can make it difficult for loved ones to carry on with their lives. This can impact their work and ability to earn money. Term life insurance can help the surviving family with adequate financial support at a trying time.

To Be Prepared for Uncertainty: Apart from anticipated expenses like education, loan repayments, housing and others, term insurance is also helpful to cover financial emergencies in your absence. As witnessed during the COVID-19 pandemic, life can be uncertain. Term insurance can help you prepare for unexpected financial needs, so you always have a safety net to rely on.

Low Premium and Attractively Large Cover: Term insurance offers an affordable way to safeguard the financial interests of your family. You can get high insurance coverage at a cost-effective premium and leave a substantial sum for your dependents. This helps you ensure financial protection without straining your pocket.

Comprehensive Rider: A term life insurance policy is a multi-faceted tool that can offer coverage against a range of financial uncertainties. Term insurance offers the option to add riders to enhance the plan's coverage. These can be added on top of the base sum assured at an additional cost. You can choose from riders like accidental death benefit, critical illness rider, waiver of premium rider and terminal illness rider and enjoy better financial protection in adverse situations.

Who should buy a term plan

Parents: Parents are generally the sole source of financial support for their children. The needs of children extend from school fees and living expenses to hefty university fees, later in life. An unfortunate event with a parent can jeopardize their future and deprive children of life’s opportunities. Parents must ensure that this scenario does not come to pass, by purchasing a term insurance policy. This policy will pay out a lump sum and/or income to satisfy their children’s expenses, in the event of any mishap of the parent(s).

Newly Married Couple: Roses, chocolates, and movie tickets are great, but here’s a truly long-lasting gift for your spouse – term insurance. This gift will give your spouse more than momentary joy, and it will secure their future. A term insurance policy assures the spouse of financial support in case of a mishap with the insured person and should be purchased as soon as possible by married couples.

Working Women: The women of today are on an equal footing with men, whether it be managing their finances or providing for their family. Today, a family is as dependent on the woman’s income as it is on the men. This dependency brings with it the need to financially secure your loved ones in case something happens to you. A Term Insurance plan assures that your parents/spouse/children are financially secured even in your absence. It ensures that your family does not have to compromise on their lifestyle and can continue with the goals you set for them. The term insurance cover amount also helps to take care of any outstanding liabilities like home loan, auto loan, education loan, and more. Not only this, but some term insurance plans also come with the added benefit of a critical illness rider that provides a payout if you are diagnosed with a serious illness like breast or cervical cancer.

Young Professionals: Young professionals are just starting their careers. Many of them are not yet married and have no financial dependents. However, this is likely to change in the future as they get married or support their parents/relatives. Such individuals should buy term insurance now rather than wait. This is because once a policy is purchased, the premiums stay the same throughout an individual’s life. On the other hand, waiting to buy term insurance in the future can force customers to pay higher premiums because term insurance premiums increase with age.

Taxpayers: Premiums paid under the policy are allowed as a deduction subject to conditions u/s 80C of the Income Tax Act, 1961. The proceeds received under the policy are exempt subject to conditions prescribed under 10(10D) of the Income Tax Act, 1961

Self Employed: As a self-employed person, you face many challenges. Unlike salaried individuals, you do not earn a fixed monthly income; you have an uneven source of income that depends on the ups and downs of the market. Plus, you may have also taken a business or personal loan from creditors, banks, or even your family and friends. Hence, buying a term insurance plan to secure your family becomes even more important for you. A term life insurance policy can ensure that your family remains financially secure even in your absence.

Retirees: Having a term insurance plan in your golden years provides financial security to your spouse. In case of your death, the payout from the policy will allow them to maintain their standard of living and cover medical costs.

Housewives: Term insurance for housewives is important as it provides her family with financial security in case of her untimely death. A term insurance payout helps cover the costs of running the household, including childcare and other expenses.

Benefits of Buying Term Insurance Plan:

• Affordable Premiums
• Cover Against Critical Illnesses
• Support in case of disability
• Additional Financial Security
• Tax Benefits
• Death Benefit
• Survival Benefits
• Whole Life Cover
• Flexible Payout Options

How to choose the best term insurance plan?

Evaluate your needs: Assess your financial situation, family’s needs, and future expenses to determine the coverage amount and the term that best suits you.

Compare different plans: Research and compare various insurance providers and their term insurance plans. Pay attention to premiums, coverage options, and any additional features or benefits.

Check the credibility of the insurer: Before buying a term insurance, it is important to assess the credibility of the insurer. Analysing the factors like claim settlement ratio, number of lives covered, volume of claims settled, solvency ratio, and longevity of the company can help you choose the right insurance company as per your needs.

Know the existing customer experience: Customer experience plays a crucial role in selecting the best term insurance plan. Apart from benefits and affordability, make sure to pay attention to the customer experience. This simplifies the processes involved and offers you peace of mind. Look for an insurance company that has a quick turnaround time and is proactive in solving your queries.

Take into account service quality and online accessibility: Service quality and online accessibility ease the process of buying a plan, paying premiums, and raising a claim. You can look for online reviews or check with your peers and family to find plans that offer easy accessibility through customer support. This enhances convenience and saves time.

Check the claim settlement ratio: The claim settlement ratio helps you determine the insurer's credibility and ability to settle claims on time. It is important to look for an insurance company with a high ratio to ensure your insurance claim is paid on time without any hassles or delays. This can offer better financial security for your loved ones.

Choose a plan that offers term insurance riders: While the primary purpose of term life insurance is to offer your family financial protection in your absence, term insurance also offers additional features. Riders like the critical illness benefit, accidental death benefit, and others provide financial support against many adverse situations. Consider your needs and budget and add suitable riders to your plan to enhance your plan's coverage.

Look for a term insurance plan with multiple payout options: Traditionally, term insurance policies offer a lump sum payout to your family in case of an untoward incident during the policy term. While this can help your family cover their needs, it can be challenging for them to manage such a large sum. Hence, it is advisable to look for term insurance plans that have the option to choose regular income, increasing income, or a combination of lump sum and regular income. You can opt for options that cater to your needs to ensure your family's well-being in the long run.

Term Insurance Riders

• Terminal illness rider
• Waiver of premium due to permanent disability
• Critical illness rider
• Accidental death benefit

Frequently Asked Questions

When is the right time to buy a term insurance plan?

The right time to buy a term insurance plan is as soon as you can. The chances of getting lifestyle diseases increase as you age, and so do insurance costs. When you invest in a term plan at a young age, you get an insurance policy at an affordable premium. Hence, it may be advised to invest in term life insurance when you are young. This will save a lot of money in the long run. Moreover, it will also provide you and your loved ones with extended coverage and financial security from an early age.

Is term insurance considered an asset?

Yes, term insurance is one of the greatest assets you can create to safeguard the future financial interests of your family members. It can help you leave behind a legacy for your loved ones and help them carry on with their lives and fulfill their goals in your absence.

Can I change the duration of life cover after the term insurance policy is issued?

No, you cannot change the policy period of Term Insurance after the policy is issued.

What kind of deaths are not covered in term insurance?

All kinds of deaths are covered under a term insurance plan, including natural, accidental, murder, illnesses, and natural calamities. Only death due to suicide in the first year of policy is not covered.

Will my term insurance premium remain constant if, later, I became a heavy drinker/smoker?

Your Term Plan premium is decided when you buy the plan and remains unchanged throughout the policy period. However, the insurance provider may not take into consideration any claim arising as a direct consequence of alcohol consumption. Read your policy document carefully to understand all the exclusions related to alcohol use.

You should also disclose any change in your lifestyle and health condition, including smoking habits, to your insurer. It will ensure a hassle-free claim settlement at a time when your family needs the sum assured the most.