Enjoy affordable premiums, flexible coverage periods, and peace of mind with the benefits of term insurance plans.
Life insurance is about to get a whole lot better
A product of ACKO Life Insurance - ARN:ALIL/2023-24/09/001
The Indian insurance market offers various types of insurance policies that cater to the diverse requirements of its population. One such popular insurance product is Term Insurance (TI), which provides financial security to the policyholder's family in case of the policyholder's untimely demise. With an increasing number of people realising the importance of financial planning, Term Insurance has become an essential financial tool for ensuring a secure future for the policyholder's family. This article highlights various benefits of Term Insurance Plans in India, their importance, and some frequently asked questions.
So, let us delve into the top five advantages of purchasing a term insurance policy in India.
It is very hard to anticipate the course of life because we cannot be sure what will happen next. In case you die, term insurance will take care of your family financially. Death benefit is a one-off amount that goes to your nominee to ensure that they continue living without money problems.
In India, term insurance is very cheap. There are good coverage amounts at cheap premiums. Therefore, this is the best way of ensuring a better future for your family without necessarily feeling the pinch. This is a clever investment towards the health of your loved ones.
Is there anyone who does not want tax savings? It is important to know that term insurance premiums are also eligible for tax deductions under section 80-C of the Income Tax Act. An extra benefit is that the death benefit obtained by your nominee is exempt under Section 10(10D). Thus, you get value for money while providing for your family. It's a win-win!
That means that in term insurance, it is up to you to choose the amount of cover based on what exactly it is that will fit for your family’s needs. You can determine how much it will cover such as paying back outstanding loans, daily expenses or children’s education among others.
Peace lies in knowing that your loved ones are safe to handle your financial matters while you are away. You can lead a more relaxed life knowing that your family is well catered for. That feeling of being secure is beyond price.
Here are some crucial factors you should think about when getting a term insurance plan in India.
Ensure that the sum assured (amount paid out should you die) adequately replaces the financial needs of your family. Consider expenditures such as debt payment, schooling of the kids, living costs and inflation, etc. Therefore, sufficient coverage means long term security.
Determine the length of time you need the cover. It should take you to the age when you retire or meet your obligations like educating children or clear your loans. Longer duration could be associated with a high premium.
The cost of premiums in this case is not too expensive, but it should also be taken into consideration. The premium should be affordable, and you should not find it difficult to pay it. There is an option of making single or regular premium payments.
Most term insurance plans also incorporate riders or add-ons such as critical illness cover, accidental death benefit, and disability cover. Assess yourself regarding these requirements and consider having them if necessary included into your policy.
Make sure that you read the policy documents and know what they do not cover. Examples of a typical exclusionary language include suicide in the first year and death as a result of pre-existing conditions in the waiting period.
Choose whether to affect the premium payments monthly, annually or in one lump sum. Go for a frequency that is affordable to your budget.
Identify a reliable nominee and make them understand the policy details. In case of death, this is the person who will be compensated with that claim amount.
Shop around and compare quotes from different insurers for the best deal. This brings us to a point where online insurance aggregators may come handy for this situation.
To buy a term insurance policy in India, you need to meet certain eligibility criteria:
In order to obtain the term insurance it is necessary that the person you are applying for is at least eighteen years of age. However, some insurers typically have a maximum entry age of about 65 years, so ensure that you do not exceed that age.
Usually, there is a minimum and a maximum policy term for the term insurance. This is the minimum period of time, it could be forty or fifty years depending on the insurer and the plan you choose.
In cases of death, the sum assured is the amount your family may receive. Nevertheless, the sum assured is not conditioned to any particular criteria. Choose a sum that adequately covers your family.
Generally the sum assured will be determined by proving your income. This makes sure that your family’s financial requirements are met.
Your premium could be affected in case you smoke or drink alcohol. You may be asked to pay more than smokers, drinkers or people who don’t smoke and drink at all.
However, in calculating the premium, some insurance providers may consider the nature of your occupation. The higher premiums may be attributed to risky professions.
Term insurance policies also offer riders such as accidental death and critical illness riders. However, eligible factors and conditions of such riders might be different.
In term insurance policy, different insurance companies provide their features. Make sure you understand these features and pick the one that works for you.
Riders are add-ons that enhance your basic insurance policy. In simple terms, they provide additional benefits and protection alongside your main term insurance plan. Here are the different types of riders in term insurance.
Imagine you're in a car accident, and something unfortunate happens. This rider provides an extra sum assured if your demise is due to an accident. It's like a safety net for you and your family.
Sometimes, we face severe illnesses like cancer or heart disease. This rider pays you a lump sum if you're diagnosed with a critical illness. It can help cover your medical expenses and ease your financial burden.
This rider gives financial assistance in case there is an accident that leaves you disabled, helping you in getting over the challenges and changes in your life as a result of the disability.
The cost of your term insurance premium is largely determined by your age. To put it simply, the older you are for term insurance, the more you will pay for it. Therefore, it may be wise to think about acquiring a term insurance policy, depending on the age and life phase.
Early 20s to 30s: While young in age and a new start in life this is the best period to take up a term insurance. It is normally cheaper because you are generally healthy, at a particular age. It also secures the future of your family in the event you die prematurely.
Mid-30s to 40s: Your premium may rise as you age but it is still a good time to purchase term insurance. For example, you may be given a home loan or pay for your children’s education and therefore, term insurance will take care of your family’s future.
50s and Beyond: This is because term insurance is available, although premiums increase since health risks are higher for elderly people than for young ones. It is still a good option in securing a financial cushion to your loved ones, especially, when your savings are lacking in meeting your retirement needs.
In the hustle and bustle of life, we often forget to plan for the unexpected. That's where term insurance comes to the rescue! But with so many options out there, how do you pick the one that's just right for you? Fear not, we've got your back with these simple tips.
Before diving in, take a moment to figure out how much coverage your loved ones would need in your absence. Consider factors like outstanding loans, daily expenses, and future goals. A little maths now can save a lot of worry later.
Policies come with terms and conditions (not the boring kind!). Be crystal clear about the policy term – how long it lasts – and whether it aligns with your financial goals. Some policies may offer coverage up to a certain age, so choose one that fits your plans.
Let’s talk about money. Premiums, to be precise. Find a balance between affordability and coverage. Some policies offer lower premiums initially but might spike later. Think long term and choose a premium you can comfortably handle throughout the policy duration.
Riders are like add-ons for your policy. They can provide extra coverage for specific scenarios, like critical illness or accidental death. Consider your lifestyle and health when choosing riders – it's like customizing your insurance plan.
What's not covered is as important as what is. Take a close look at the exclusions in the policy. Some policies may not cover certain illnesses or risky activities. Knowing these upfront can save you surprises later.
Decide whether you prefer the ease of online transactions or the comfort of face-to-face interactions. Online policies are convenient, but if you prefer a human touch, go for an offline option.
Simply put, term insurance is like a safety net for your family. Simply put, it’s a scheme that offers to your relatives monetary aid if, God forbid, misfortune befalls you within the period.
Affordability is the Key: However, it has a cool element to it—it’s affordable. The reason why term insurance is so cheap. You simply pay a little more on your premium, and your family gains the necessary financial safety net for when life throws a curveball.
Support in Tough Times: Imagine this: your family is a captain of a ship and you are its anchor. In case anything happens to you, this is an anchor to keep the boat steady in term insurance. Your family is sure of going through the storm of financial uncertainties without being worried about the waves that go with it.
Planning for Tomorrow, Today: As in planting, thinking about the future is like sowing seeds. The term insurance is the seed which leads to a big tree that offers shelter and shadow. It is a wise decision to provide for your family even if you are absent.
Tax Benefits Galore: Guess what? You deserve a high-five from the government for being responsible. Term insurance is also subject to tax breaks. Therefore, this is a double-edged sword for you. You are providing for your family’s future while also getting a couple of economic benefits at the same time.
Peace of Mind: Picture this: you're sipping chai on a rainy day, worry-free. That's the peace of mind term insurance offers. Knowing that your family is financially secure allows you to enjoy life without constantly stressing about what ifs.
The ACKO Flexi Life Insurance Plan goes beyond traditional coverage, it provides a dynamic approach to meet your ever-changing needs. With the flexibility to tailor key aspects, you can ensure your family's financial well-being aligns perfectly with your vision.
Here is what makes it unique:
Free Will Creation Services: We help with the creation of a will to distribute your assets.
Flexibility: Customise important aspects of your coverage.
Optional Riders: More in-built coverages to enhance your term insurance plan.
Traditional Term Insurance policies do not offer any maturity benefits. However, some insurers provide term plans with a return of premium option, where the premiums paid are returned to the policyholder if they survive the policy term.
In the event of the policyholder's death, the nominee must submit the required documents, such as the death certificate and claim form, to the insurance company. The insurer will then verify the claim and, if found valid, settle the claim by paying the death benefit to the nominee.
If a policyholder stops paying premiums for their Term Insurance Policy, the policy will lapse, and the coverage will cease. If the policyholder dies after the policy has lapsed, no death benefit will be payable to the nominee. However, some TI plans offer a grace period to pay the outstanding premiums and reinstate the policy.
Yes, in the event of the policyholder's death during the term, the full sum assured is paid out to the nominee.
No, term insurance typically does not have a maturity benefit. It provides coverage for a specific term, and if the policyholder survives the term, there is no payout.
Yes, the death benefit received by the nominee is usually tax-free under Section 10(10D) of the Income Tax Act.
Term insurance provides financial protection to your loved ones in case of your untimely demise, ensuring they receive a lump sum amount to cover expenses.
Term insurance offers tax benefits on the premiums paid (up to a certain limit) under Section 80C, and the death benefit is usually exempt from income tax under Section 10(10D).
Yes, it's a wise decision. Term insurance provides affordable and essential financial protection for your family, ensuring their financial security in your absence.
It's advisable to buy term insurance when you're young and healthy, as premiums are lower. However, it's never too late to get coverage.
Consider your financial needs, family situation, and affordability. Compare different plans, understand the coverage offered, and choose a reliable insurance provider.
Affordable premiums, high coverage, simple structure, and tax benefits make term insurance an attractive option for securing your family's future.
To provide financial security for your family in case of your demise, ensuring they can maintain their lifestyle, pay off debts, and cover other expenses.
Yes, many insurers offer riders like critical illness or accidental death benefits that you can add to enhance your coverage. Check with your insurer for options.
Calculate your coverage based on your financial obligations, including outstanding loans, future expenses, and your family's needs. It's recommended to have coverage at least 10 times your annual income.
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.