TeamAckoNov 2, 2023
Term Insurance Plans are popular for multiple reasons, such as providing pure life insurance coverage and being the most affordable kind of plan. They can be purchased in blocks of 10, 20, or 30 years and can be renewed or switched to a Whole Life Insurance policy later on. Nowadays, a new type of Term Insurance known as an e-Term Plan is available. It provides all the features of a premium non-participating term assurance policy. This article aims to explain what e-Term Plans are, how they work, and whether they are the right choice for you and your family.
An e-Term Plan is similar to a regular Term plan. It is a "non-participating policy", which means that it is a pure coverage plan. You will not get any profits or dividends from this insurance plan. When you purchase an e-Term Plan, your family will get a death benefit in case of your sudden demise.
You can only buy e-Term Plans online. You cannot buy e-Term Plans from offline intermediaries such as insurance brokers or insurance agents. This is one of the unique features of this insurance policy, and makes it a great choice for citizens in digital India.
An e-Term Plan bases sum assured payouts on your lifestyle habits. Generally, your e-Term Plan will make the sum assured payments based on whether you smoke or not.
The sum assured decreases over time, usually in line with a specific liability like a loan or mortgage.
The sum assured increases over time to keep up with inflation.
In case the policyholder survives the policy period, the premiums paid are refunded to them in Return of Premium (ROP) Term Insurance Plans.
The policy can be converted into a permanent life insurance plan without the need for a medical exam.
Employers purchase these plans for their employees. The premium is shared by the employer and employee, and the sum assured is usually a multiple of the employee's annual salary.
Since you can buy e-Term Plans online, you can purchase them anytime and anywhere! E-Term Plans are growing in popularity because they offer you a flexible online plan that will secure your family's financial future. Here are the detailed benefits of buying an e-Term Plan.
Low premiums: e-Term plans have lower premiums compared to traditional term insurance plans as there are no intermediaries involved in the sales process, which reduces the administrative costs.
Convenience: e-Term plans can be purchased online from the comfort of your home or office. This saves time and effort and eliminates the need for physical paperwork.
Easy comparison: There are several e-Term plans available online, and policyholders can easily compare the features, benefits, and premiums of different plans to choose the one that suits them the best.
Flexibility: Policyholders can choose the policy term and sum assured as per their financial goals and requirements.
Higher coverage: e-Term plans offer higher coverage for a lower premium, making them an affordable option for those seeking higher coverage.
Transparency: e-Term plans are transparent, and policyholders can access all the information about their policy, including the premiums paid, policy term, sum assured, and other details, online.
It's easy to apply for and buy an e-Term Plan. If you're an earning Indian citizen between 18 and 60 years old, you're automatically eligible to apply.
If you're an NRI, you can still apply to buy an e-Term Plan. Although residency rules vary by insurance companies, you're eligible as long as you live in one of the counties the insurance company specifies. Whether you're earning or getting passive income, you should have a steady cash flow to buy the e-Term Plan. You should be earning enough to be able to afford your premium payments.Also read: Term Insurance for NRI
If you pass away while your e-Term Plan is active, your beneficiaries can claim the death benefit. In order for your family to raise a death benefit claim, they will need to follow a set of rules, which depend on individual insurance companies. In general, the following steps are requested from most insurance companies.
The first step is to inform the insurer about the claim by calling their toll-free number or emailing them. You will need to provide the policy number, the insured's name, and the date and cause of death.
The insurer will require you to submit some documents to process the claim, such as the death certificate of the insured, a copy of the policy, identity proof of the nominee, and any other documents as specified by the insurer.
Once the insurer receives the necessary documents, they will process the claim and verify the information provided. This may involve contacting the hospital or doctor for further information.
If the claim is approved, the insurer will settle the claim amount to the nominee's bank account. The claim amount will be equal to the sum assured of the policy.
You may require the following documents to make a claim.
e-Term Plan document, online and hard copy
Claim Form A, which the nominee needs to film out regarding you, and your death circumstances
Nominee's Proof of Age (PoA)
If you didn't name a beneficiary in your e-Term Plan, your inheritors need to establish evidence of title to your estate
If your death was accidental, your beneficiaries will need to submit a post-mortem report and FIR
Apart from being online and easy to access, an e-Term Plan offers you several useful benefits. Here are a few examples.
Policyholders can choose the policy term and sum assured as per their financial goals and requirements.
e-Term plans offer higher coverage for a lower premium, making them an affordable option for those seeking higher coverage.
Under Sections 80C and 10(10D) of the Income Tax Act of 1961, policyholders can get tax benefits for the premiums they pay and the death payments they receive. This is valid under the old tax regime.
Unlike other Life Insurance Policies, you can apply for, and purchase, an e-Term Plan online. The steps to buy an e-Term Plan may differ according to individual insurance companies, but many adhere to the following steps.
Visit the insurance company's website: To start the process of getting your e-Term Plan, you'll need to visit your insurance company’s website. You can select how many years you want your e-Term Policy to cover. Then, you'll select your sum assured based on whether or not you smoke.
Submit personal details: Make sure to honestly disclose all your information. You may need to share details such as your job and work environment, gender, age, and health conditions. This step is crucial, because if you submit incorrect details, then your beneficiaries may not be able to claim on your policy.
Calculate your premiums: All life insurance policies are based on premium payments, calculated according to your health status and age, and other criteria. Generally, insurance companies will estimate your premium payments with factors including your age, health status, gender, lifestyle habits, hobbies, sum assured you choose, and the number of years you want the policy for.
Purchase the e-Term Plan: E-Term Plans usually have annual premium payments. You can choose the annual payment option and will need to initiate the first transaction via an online payment mode.
You may need a medical exam according to the insurance company you're buying your e-Term Plan from.
Usually, insurance companies offer a 30 day grace period when you can pay for missed premium payments. If you skip more than a certain number of payments, your policy lapses or terminates.
Yes, an e-Term Plan covers all deaths, including accidental deaths. However, death by suicide is not covered under the e-Term Plan.
Disclaimer: The content on this page is generic and shared only for informational and explanatory purposes. It is based on industry experience and several secondary sources on the internet, and is subject to changes.
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