Secure your loved ones' financial future with affordable term insurance.
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Term insurance can be a slightly complex concept to understand. So let us try to make it simple. Imagine term insurance as a kind of financial safety net, kind of like a shield that protects your loved ones if something unfortunate were to happen to you. It's like having a backup plan for life's uncertainties.
You, the policyholder, pay a regular amount of money to an insurance company, in this case ACKO. This is called a premium, and you usually pay it monthly or annually. In return, the insurance company promises to provide a big lump sum of money to your family or beneficiaries if you were to pass away during the term of the policy.
Now, here's the key thing about term insurance: It's pure and straightforward protection. It doesn't come with any investments or savings features like some other insurance plans. Instead, it's like saying, "If something happens to me during this period, make sure my family gets financial support."
Term insurance is an excellent choice for many people because it's usually quite affordable, especially when you're young and healthy. It's a way to ensure that your family won't struggle financially if you're not around to provide for them.
Here's why you should consider buy a Term Insurance Plan
Life is unpredictable, and we can't foresee what might happen. Term insurance ensures that if something unfortunate happens to you, your family won't struggle financially. It provides them with a lump sum amount (the sum assured) to cover expenses like daily living, education, and even outstanding loans.
Term insurance is one of the most affordable types of life insurance in India. You pay a small amount regularly (the premium), and in return, your family gets a significant payout if you pass away during the policy term.
Another perk is that you can get tax benefits. The premiums you pay are tax-deductible under Section 80C of the Income Tax Act as per the tax regime you opt for. Plus, the payout your family receives is usually tax-free under Section 10(10D).
Term insurance plans are flexible. You can choose the coverage amount (sum assured) based on your family's needs and your budget. You can also decide how long you want the coverage to last.
Knowing that your family will be financially secure if something happens to you provides peace of mind. You can go about your daily life without worrying about their future.
Buying a Term Insurance plan is a practical option for everyone who can afford to pay a premium. This plan ensures the financial security of your family. However, there are a few people that must secure their family’s finances in case something unfortunate happens. Here’s a list.
If you have people who rely on you financially, like a spouse, kids, or ageing parents, term life insurance can be a good idea. It helps ensure that even if you're not around, they can still manage financially.
If you're the one who brings home the bacon, term life insurance is important. It ensures your family won't face financial difficulties if you're no longer there to provide for them.
If you have loans or debts, like a home loan or car loan, term life insurance can cover those debts so that your family doesn't get burdened with them.
If you're a single parent, your children depend on you entirely. Term life insurance can give you peace of mind, knowing that your kids will have financial support if something happens to you.
Buying term life insurance when you're young and healthy can be cheaper. It's like locking in a good deal for the future.
If you want to leave an inheritance or financial legacy for your heirs, term life insurance can help ensure they receive it.
If you own a business, term life insurance can be crucial to ensure the smooth transition of your business or to cover business debts in case something happens to you.
The working of a term plan is quite simple. Let’s break it down for you.
You start by choosing a term insurance plan from an insurance company in India. You pay a regular premium for this plan, which is like a small amount of money you give to the insurance company.
You also pick a "term" for your insurance plan. This is like a time frame during which the insurance will be active. It could be 10, 20, 30 years, or more. Depending upon the terms and conditions of the insurance company.
Now, let's say something unfortunate happens to you during the term you chose. It could be an accident, illness, or anything that leads to your passing away. Your family, who you mentioned as beneficiaries when you bought the plan, will receive a lump sum amount from the insurance company. This is called the "death benefit." It's financial help to your family during a tough time. They can use this money to cover expenses like paying off loans, daily living costs, your children's education, and more.
Term plans are designed to provide financial safety to your loved ones as per your unique needs. Here is a list of different types of Term Plans available in the Indian market.
Think of this as the basic version. You pay a fixed premium every year, and if something unfortunate happens to you during the policy's term, your family gets a lump sum amount (the sum assured). It's like a safety cushion for them.
This one is smart because it takes inflation into account. Your coverage amount (the sum assured) increases every year by a certain percentage. So, it keeps pace with the rising cost of living.
Imagine you have a home loan or some other big debt. This type of term plan is designed for that. As you pay off your debts, the coverage amount decreases because your financial responsibilities are decreasing too.
With this plan, if you outlive the policy term, you get back all the premiums you paid over the years. It's like getting a refund, but it's only if you're alive at the end of the term.
This one is flexible. You can start with a basic term plan and later convert it into a more comprehensive life insurance policy, like an endowment or whole life plan. It's like upgrading your insurance.
Think of riders as add-ons to your term plan. You can customise your policy by adding riders for things like critical illness, accidental death, or disability. They provide extra protection for specific situations.
Sometimes, employers offer this to their employees as part of the employee benefits package. It covers a group of people under a single policy, and the premiums are usually lower.
This is for couples. You and your spouse can be covered under one policy. If either of you passes away, the surviving spouse gets the benefit. It's a way to ensure financial security for the family.
This is specially designed for single parents. It ensures that your child's financial needs are met if something happens to you.
Choosing the best term insurance plan in India is like picking the perfect pair of shoes – you want something that fits your needs just right. Here are some tips on choosing the right term insurance plan.
The first step is understanding what you need. Term insurance is all about providing financial security to your loved ones if something happens to you. So, consider factors like your age, income, family size, and future goals. Think about how much money your family would need if you were no longer around to support them.
This is also called the 'Sum Assured.' It's the amount your family will get if something happens to you. Aim for a coverage amount that can take care of your family's expenses, like daily bills, loans, and education for your kids. A good rule of thumb is to aim for 10-15 times your annual income.
How long do you want the insurance to last? Some policies can go up to 40 years or more. It should ideally cover you until your retirement age when your family might be less dependent on your income.
Some policies come with extra benefits called 'riders.' These can cover things like critical illnesses, accidental death, or disability. Think about whether you need any of these extras.
You can buy term insurance online or choose to visit an insurer’s branch office in person. Online plans are often cheaper because there are no agent commissions. Additionally, with online insurance you receive a lot of services claim tracking.
Don't settle for the first option you find. Get quotes from multiple insurance companies and compare them. This will help you find the best deal.
Don't skip the policy document. Read it carefully to understand all the terms and conditions. If you have questions, ask the insurance company for answers.
Premium is a sum of money you pay regularly to keep the policy active. Make sure it's affordable and fits into your budget. Remember, term insurance is a long-term commitment, so choose the sum assured of your plan wisely.
Life changes, so should your insurance. Review your policy every few years to make sure it still meets your needs. You might need to increase coverage if your income or family size grows.
Be completely honest when applying for the policy. If you hide any information or provide false details, it can lead to problems when your family needs to claim.
Here are some of the factors that can affect the premium of your ACKO Flexi Life Insurance Plan.
Your age plays a big role. The younger you are when you buy a term insurance policy, the lower your premium will be.
Your health condition matters a lot. Insurance companies may ask you to undergo a medical check-up. If you're healthy, you'll likely get a lower premium. But if you have health issues, your premium may be higher.
If you smoke or drink alcohol, it can increase your premium. These habits are associated with higher health risks, so insurance companies may charge more to cover those risks.
The length of your insurance policy also affects the premium. Longer-term policies often have higher premiums compared to shorter ones.
This is the amount of money your family would receive if something happens to you. If you want a higher sum assured, your premium will be higher too.
Some policies offer extra benefits called riders, like critical illness or accidental death coverage. Adding these riders will increase your premium, but they provide additional protection.
Your job matters too. Risky jobs, like working in construction or mining, can lead to higher premiums.
If you have a risky hobby, like skydiving or racing, it can also increase your premium. Insurance companies consider your lifestyle when setting the rate.
In some cases, your gender can affect your premium. Historically, women have had lower premiums because they tend to live longer and have fewer health problems, but this gap is narrowing.
Inflation and other economic factors can also impact premium rates over time. Prices can go up as the cost of living increases.
Here's a simple guide on how to choose the best term insurance plan with the right sum assured for your family.
Assess Your Financial Responsibilities: Start by making a list of your financial responsibilities. Consider things like outstanding loans, your family's day-to-day expenses, children's education, and any other financial commitments you have. This will give you a rough idea of how much money your family would need to maintain their lifestyle and meet their future needs if you're not around.
Estimate Future Expenses: Think about the future needs of your family. For example, if you have young children, you'll want to ensure there's enough money for their education and other important life events. If you have a spouse who depends on your income, calculate how much they would need to cover their living expenses.
Factor in Inflation: Remember that the cost of living tends to rise over time due to inflation. So, it's a good idea to factor in inflation when estimating future expenses. What might seem like a sufficient sum today may not be enough in the future.
Consider Existing Assets and Savings: Take into account any existing savings, investments, or assets you have that your family can fall back on in case of an emergency. Subtracting these from the required Sum Assured can help you determine a more accurate figure.
Think About Your Budget: Your budget plays a crucial role in choosing the right Sum Assured. Ensure that the premium you'll be paying for the term plan comfortably fits within your budget. You don't want to strain your finances by going for a sum that's too high.
Compare Quotes: Get quotes from different insurance companies and compare their offerings. Look at the premiums they charge for the Sum Assured you need, as well as the features and benefits of their policies.
Review and Update Regularly: Life circumstances change, so it's essential to review your term plan and the Sum Assured periodically. If you have significant life changes, like getting married, having children, or buying a new home, consider adjusting your coverage accordingly. With the ACKO Flexi Benefit, you can easily make changes to your policy through the ACKO app.
Here are a few reasons why buying a term plan online is a better idea than buying the plan offline.
Shopping online for term insurance is as simple as ordering your favourite food or clothes from the comfort of your home. No need to visit an insurance office or meet with agents. You can do it anytime, anywhere, at your own pace.
Online term insurance plans are often more affordable because there are no intermediaries or agents involved. You can compare quotes from different companies easily and choose the one that fits your budget.
When you buy online, you can see all the details and terms clearly on the website. No hidden fees or confusing jargon. It's like reading a book with no fine print.
Traditional insurance can be time-consuming with paperwork and meetings. Online, you can complete the process faster, sometimes even in a matter of minutes.
You have a wide range of options online. You can customise your term insurance plan to suit your needs - choose the coverage amount, policy duration, and add riders like critical illness or accidental death coverage.
Online buying means no pushy salespeople trying to upsell you. You can take your time to understand the policy and make an informed decision.
With a few clicks, you can get instant quotes from multiple insurance companies. It's like getting multiple recommendations from friends without having to ask them.
Reputed insurance websites use encryption and secure payment gateways to protect your personal and financial information. So, your data is safe.
Imagine you want to buy life insurance in India. You want to make sure your family is financially secure if something happens to you. But you're not sure how much coverage you need or how much it will cost. That's where a Term Insurance Calculator comes in.
Think of it like a helpful tool on a website or app. You input some basic information about yourself, like your age, gender, and how much money you want your family to receive if you pass away. It might also ask about your smoking habits and health condition, as these can affect the cost.
Then, the calculator does some quick maths and gives you an estimate of how much you'll pay for the insurance each month or year. It also tells you how long the coverage will last (usually a specific number of years).
So, in simple terms, a Term Insurance Calculator helps you figure out how much insurance you need and how much it will cost. It's like a virtual assistant that takes the guesswork out of protecting your loved ones financially.
A Term Insurance Rider is like adding extra toppings to your pizza! In this case, it's extra benefits you can attach to your basic term insurance policy. These benefits are designed to give you more coverage and protection beyond the regular policy. Here are the riders that you can add to your ACKO Flexi Life Insurance Policy.
Accidental Death Rider: This rider provides you with additional coverage in the event that you die as a result of an accident.
Critical Illness Rider: This rider provides you with a lump sum of money if you are diagnosed with a critical illness, such as cancer, heart disease, or stroke.
Accidental Total Permanent Disability Rider: This rider provides you with a lump sum of money if you become totally and permanently disabled as a result of an accident.
Here is the eligibility criteria for buying a term plan at ACKO.
At ACKO, we offer term life insurance to people between the ages of 18 and 65. So, if you're anywhere in this age range, you're eligible to apply for term insurance.
You generally need to have a source of income to buy term insurance. This is because you'll be paying regular premiums to keep the policy active. It's usually not a problem if you have a job, run a business, or have some form of steady income.
Your health plays a big role in eligibility. Insurance companies may require you to undergo a medical check-up to assess your health. If you're in good health, you're more likely to pay a lower premium. But don't worry, having some health issues doesn't always mean you can't get insurance; it might just affect the premium you pay.
Lifestyle habits like smoking or drinking can affect your eligibility and the cost of your policy. If you smoke or drink heavily, you may pay more for your term insurance.
You'll need to provide the necessary documents like proof of age, identity, and address when applying for term insurance. Make sure you have these documents in place.
Always provide accurate information in your application. Misleading the insurer can lead to problems later on, especially during the claim process.
Claiming term insurance online through the ACKO app is a straightforward process. Here's a step-by-step guide on how to do it.
Step 1: Download the ACKO app
Step 2: Log In
Open the app and either register for an account if you're a new user or log in using your existing credentials if you already have an account. You might need the policy number or other personal information during this step.
Step 3: Open the policy and click “Claim”
Once you're logged in, look for the ACKO Flexi Life Plan and click on "Claims”.
Step 4: Fill in the Details Since this is a claim for a term insurance plan, your nominee must answer a few questions and then proceed to the next section.
Step 5: Upload Documents The app will prompt you to upload necessary documents, such as the death certificate (in case of a death claim) or any other documents they require. Make sure to have these documents handy in electronic format (PDF or clear images from your phone's camera).
Step 6: Review and Submit
Double-check all the information you've entered and the documents you've uploaded. Once everything looks good, hit the "Submit" button.
If your claim is approved, the insurance company will process the settlement. The funds will be disbursed according to the terms of the policy, usually to the nominee or beneficiary mentioned in the policy.
Here is a list of documents that you may need to file a claim.
Death Certificate: This is the most crucial document. It proves that the person insured has passed away. You can get this from the local municipal authority or hospital where the person passed away.
Policy Document: You'll need a copy of the term life insurance policy. It shows the details of the insurance, like the coverage amount and beneficiary information.
Identification Proof: You'll need to prove who you are. Common forms of ID include a passport, Aadhaar card, or voter ID.
Medical Records: If the death was due to a medical reason, the insurance company might ask for medical documents or reports related to the illness or condition.
Police Report (if applicable): If the death happened under unusual or suspicious circumstances, you may need to provide a copy of the police report.
Nominee/Beneficiary ID: The person who will receive the insurance money (the nominee or beneficiary) will need to prove their identity as well.
Bank Details: You'll need to provide your bank account information where the insurance payout should be deposited. This is usually done through a cancelled cheque or a bank statement.
Proof of Relationship: If the nominee/beneficiary isn't the spouse, you may need to provide proof of the relationship, like a marriage certificate or birth certificate (for children).
Additional Documents: Depending on the specific circumstances of the claim, we might ask for more documents.
Here are some key terms related to term insurance
Term Insurance: Term insurance is a type of life insurance that provides coverage for a specified period, known as the "term." If the insured person passes away during this period, their loved ones receive a lump sum payment (the death benefit). If the insured person survives the term, there is no payout.
Premium: The premium is the amount of money you pay to the insurance company regularly (monthly, annually, etc.) to keep your term insurance policy active. It's like a subscription fee to keep your coverage in place.
Sum Assured or Death Benefit: This is the amount of money that the insurance company will pay to your family or beneficiaries if you pass away during the term of the policy. It's the financial support your loved ones will receive in case of your unfortunate demise.
Policy Term: The policy term is the duration for which your term insurance policy is in effect. It can typically range from 5 years to 30 years or more, depending on your choice when you buy the policy.
Rider: A rider is an optional add-on to your term insurance policy that provides extra coverage for specific events or situations. For example, a critical illness rider can provide additional money if you're diagnosed with a serious illness.
Nominee: The nominee is the person you designate to receive the death benefit in case something happens to you. This is usually a family member or someone you trust to handle the financial aspect on your behalf.
Grace Period: If you miss paying your premium on time, the grace period is a short window during which you can make the payment without your policy getting cancelled. It's like a small buffer to prevent your coverage from lapsing immediately.
Lapse: If you stop paying your premiums and don't revive the policy within the grace period, your term insurance policy may lapse. This means you lose your coverage, and your beneficiaries won't receive any payout if you pass away.
Underwriting: This is the process insurance companies use to assess your health, lifestyle, and other factors to determine your premium and whether they'll approve your application for term insurance.
Term life insurance can be a bit confusing, and there are some common myths about it in India. Let's break down these myths and find what the reality is.
Myth 1: Term Life Insurance is Too Expensive
Reality: Term life insurance is actually quite affordable. You pay a small premium regularly, and in return, your loved ones get a lump sum if something happens to you during the policy term. It's like buying peace of mind at a reasonable cost.
Myth 2: Term Life Insurance Has No Benefits if You Survive
Reality: Some people think that if they don't pass away during the policy term, they won't get anything back. But that's not true. Term insurance provides financial security to your family if you're no longer around. Your peace of mind is the benefit!
Myth 3: Term Insurance is Only for the Elderly
Reality: Term insurance is for everyone, not just older folks. In fact, it's a smart move to get it when you're young and healthy because premiums are lower. It helps protect your family's future, especially if you have dependents.
Myth 4: You Don't Need Term Insurance if You Have Savings
Reality: While savings are important, they might not be enough to cover your family's financial needs in case of your unexpected absence. Term insurance adds an extra layer of protection to ensure your loved ones are financially secure.
Myth 5: Buying Term Insurance is Complicated
Reality: Buying term insurance is easier than ever today. You can do it online, and many insurance companies offer simple, user-friendly processes. You don't need to go through a lot of paperwork or deal with complicated jargon.
Myth 6: It's Okay to Underinsure
Reality: Underinsuring yourself defeats the purpose of term insurance. Make sure your coverage amount is sufficient to support your family's financial needs, including daily expenses, loans, and education.
Myth 7: Smoking Doesn't Affect Premiums Much
Reality: Smoking significantly increases your premiums because it's a risk factor. If you quit smoking, you can reduce your premiums over time. It's a win-win for your health and your wallet.
Myth 8: You Can't Change Your Policy Once It's Bought
Reality: You can adjust your term insurance policy if your life circumstances change, like getting married, having children, or buying a home. Insurance companies often allow you to modify your coverage.
Most insurance companies require the policyholder to be a citizen or resident of India, be of a certain age (usually between 18 and 65 years), and have a stable income source.
You should consider factors such as your income, expenses, debt, and future financial obligations, such as children's education or mortgage payments, when determining the coverage amount.
Most Term Life Insurance policies in India come with a renewable option, which allows you to renew the policy for another term after the initial term expires.
If you outlive your Term Life Insurance policy in India, the policy will expire and you will not receive any payout.
Yes, buying term insurance is a good idea because it offers financial protection to your loved ones if something happens to you. It's affordable, and the premium you pay is for pure insurance, so there's no investment component. This means you get a high coverage amount at a low cost.
Term insurance in India can cost as little as a few hundred rupees per month, but it depends on factors like your age and health. To get an exact price, compare quotes from different insurance companies. It's a smart way to protect your loved ones financially if something happens to you.
Buying term insurance early is a good idea as most people are young and healthy. Thus, their premium is low. So, now is the right time to buy a term insurance plan.
Term insurance premiums go up every year because the older you get, the higher the risk, and the higher the cost to insure you.
To calculate term life insurance premiums in India.
Decide how much coverage you need.
Choose the policy term (how long you want to be covered).
Assess your age and health.
Get quotes from different insurance companies.
Decide on the premium payment frequency (monthly or annually).
The insurance company calculates your premium based on your details.
You can add extra coverage options (riders) if needed.
Review the cost and policy details, then purchase the policy. Be honest about your health for accurate coverage.
When you pay premiums for your term insurance, you can get a tax deduction under Section 80C of the Income Tax Act. This can help you save money on your income tax. Just remember to check the specific tax rules and limits that apply to your policy and situation.
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.