Understanding Life Insurance of India Term Plan and Its Benefits

A term life insurance plan in India is a type of life insurance that provides coverage for a specified period, known as the term. This plan is designed to provide financial security to your loved ones in case of your untimely demise.

The term of the policy can range from 5 to 30 years, depending on your needs. You can choose a term that aligns with your financial goals, such as paying off a mortgage or funding your children's education.

One of the key benefits of a term life insurance plan in India is that it is relatively affordable compared to other types of life insurance. This makes it an attractive option for those who want to provide financial protection for their family without breaking the bank.

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A term life insurance plan in India is a type of life insurance that provides coverage for a specified period, usually ranging from 5 to 30 years.

This type of plan pays a death benefit to your beneficiaries if you pass away during the policy term.

The premium for a term life insurance plan in India is generally lower compared to other types of life insurance plans, making it a more affordable option for many people.

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Life insurance in India offers a term plan that provides a range of benefits and features to policyholders.

A term plan with return of premium (ROP) allows policyholders to stay reassured, providing a death benefit to their family in case of their untimely death.

Tax benefits are also available, with a tax deduction of up to Rs. 1.5 lakhs on premiums paid for a term plan with return of premium.

You can pay your premiums monthly, semi-annually, or annually, depending on the chosen frequency, making it easy to maintain and deliver more benefits for a lower payment than other insurance policies.

Here are some of the key features of term insurance plans:

These features make term insurance a valuable investment choice for those looking to financially secure their loved ones' future.

If you're wondering who should get life insurance, the answer is anyone with financial dependents. This includes unmarried individuals who want to ensure their parents' financial security, as well as married couples with or without children.

In fact, research shows that term insurance is beneficial to everyone having a family, and it's more of a requirement for some than for others. People with modest incomes, in particular, will find term insurance to be a lifesaver.

Here are some specific groups that should consider getting life insurance:

If you're considering buying life insurance, you should know that it's a good idea for anyone with a family. This is because life insurance provides a financial safety net for your loved ones in case something happens to you.

Term insurance is particularly beneficial for unmarried individuals who have financial responsibilities towards their parents, especially if they're retired. The maturity benefit ensures that their expenses are taken care of, and they receive a large sum of money either way.

Married couples with no children can also benefit from term insurance. It can create a financial support system for their spouse in case something happens to them. This can be especially helpful if the spouse is solely dependent on the income.

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Married couples with children have a broad set of financial responsibilities to undertake for their well-being. A term insurance plan can help alleviate some of this burden by providing a maturity benefit that can be used to save up for their children's future goals.

The premiums paid for life insurance are tax-deductible under Section 80C, providing a two-fold advantage to taxpayers. This means that you can save money on taxes while also protecting your loved ones.

Here are some key characteristics of individuals who may benefit from term insurance:

These individuals can benefit from the financial support system that term insurance provides, and it's a good idea for them to consider purchasing a policy.

If you're wondering who should get life insurance, here are some groups of people who may benefit from it.

Unmarried individuals with financial responsibilities towards their parents may want to consider term insurance with return of premium. This type of policy ensures that their parents receive a large sum of money either way, whether they pass away or survive the policy term.

Married couples with no children may also want to consider a term plan with return of premium. This can provide a financial safety net for their spouse in case of the other partner's untimely death.

Married couples with children should also consider term insurance to secure their children's financial future. This can help cover expenses such as education, marriage, and other life goals.

Young professionals with financial dependents, such as parents or siblings, may benefit from getting term insurance early in their careers. This can provide financial security and protection for their loved ones.

Self-employed individuals with inconsistent income may want to consider term insurance to ensure that their financial dependents are protected in case of their untimely death.

Newly married couples should start building a strong financial portfolio by considering term insurance. This can provide a financial safety net for both spouses and their future children.

Term insurance can help secure the financial future of your family in case of untimely death or other unfortunate circumstances. This can provide a lump sum amount to cover expenses and maintain the existing lifestyle.

Purchasing a term insurance policy can be beneficial to everyone having a family, especially those with modest incomes who may not be able to save enough in case of unforeseen circumstances.

Here are some key groups of people who may benefit from term insurance:

When choosing a term insurance policy, it's essential to consider your unique needs. To do this, take the following pointers into consideration: compare features of available TROP plans, and pay attention to the different plan options and their features, such as life cover offered, policy tenure options, and premium payment term/frequency.

You can choose from various term insurance plans, including non-linked, non-participating, and pure risk premium life insurance policies. For example, Bharti AXA Life offers the Flexi Term Pro plan, which offers two options: Without Return of Premium and With Return of Premium. The plan also provides flexibility in policy and premium payment terms.

Some term insurance policies offer a return of premium benefit, which means that if you survive the policy term, you can receive a maturity benefit of all paid premiums. For instance, the Bharti AXA Life Flexi Term Pro plan offers a return of premium benefit, where you can receive Rs. 5,08,720 upon maturity of the policy.

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Here are some key features to consider when choosing a term insurance plan:

With so many term insurance policies available, it can be overwhelming to choose the right one. One of the key features to consider is the policy tenure options. You can choose a term insurance policy that covers you for a specific period, such as 10, 20, or 30 years.

You can also opt for a policy that allows you to pay premiums monthly, semi-annually, or annually. Some policies even offer a single premium payment option, which can be beneficial if you want to pay a lump sum upfront.

Term insurance policies often have a return of premium feature, which means that if you survive the policy term, you can get back the premiums you paid. This feature is particularly useful if you want to save money on taxes, as the premiums paid can be claimed as a tax deduction.

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Some term insurance policies also offer critical sickness benefits, which allow you to receive quality care for life-threatening disorders without worrying about the expense. This feature can be added as a rider to your policy at an additional cost.

Here are some key features to consider when choosing a term insurance policy:

Remember to carefully compare the features of different term insurance policies to find the one that best suits your needs.

When buying a term insurance plan, it's essential to understand what's not covered. This can save you from unexpected surprises down the line.

You might be surprised to know that some term insurance plans don't pay out if you commit suicide within the first year of taking out the policy. This is a common exclusion, so be sure to check your policy documents carefully.

Death caused by driving under the influence of alcohol or narcotic substances is also not covered by most term insurance plans. This is a big one, as it's a common cause of accidents and fatalities.

If you've been hiding your smoking or drinking habits from your insurer, be aware that death caused by these activities might not be covered if they weren't disclosed upfront. This is a crucial aspect to consider when taking out a policy.

Participating in dangerous adventure sports like auto racing, rock climbing, or hang-gliding can also render your policy invalid in the event of a fatal accident. Some insurers may offer coverage for these activities at an extra premium, but it's not standard.

Here's a quick rundown of some common exclusions to be aware of:

Choosing the right policy is a crucial step in securing your family's financial future. It's essential to consider various factors, including your current income and liabilities, to determine the right coverage amount. A good rule of thumb is to opt for a term plan with a coverage amount that's 20-25 times your gross salary.

To ensure you're protected for the right amount of time, consider your policy term wisely. The ideal policy term should extend till your retirement age or until your children are financially independent. You may benefit more from a policy with a longer term.

When choosing a term plan, carefully check the available rider options to enhance your coverage. Accidental death benefit, critical illness coverage, and waiver of premium for disability or pre-specified illness are all crucial additions to consider. Make sure to evaluate the insurance company's claim settlement practice to ensure your nominees won't face any hassle in case of an unfortunate event.

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Comparing the costs of different term plans is a crucial step in choosing the right policy. The cost of a term plan can vary significantly depending on the insurance company, policy term, and coverage amount.

A basic term insurance plan can start from as low as ₹23/day, as mentioned in Example 5. However, a term plan with return of premium (TROP) feature may cost more, starting from ₹25/day (Example 1) or ₹37/day (Example 1).

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It's essential to compare the premium costs of different insurance companies to find the most cost-effective option. As mentioned in Example 5, premiums payable for a TROP policy are usually higher than a basic term insurance plan.

Here's a rough idea of the daily premium costs of different term plans:

To get a more accurate estimate, use a term insurance calculator, as suggested in Example 6. This will help you calculate the approximate premium rate based on your personal and medical details.

Remember to also consider the premium payment frequencies and discounts offered by the insurer when comparing costs.

Having a term insurance policy can bring a sense of peace of mind, knowing that your family will be financially secure even if something unexpected happens to you.

A term insurance policy is designed to provide financial security to your family in the event of your untimely death, allowing them to maintain their lifestyle and achieve their life goals.

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According to Example 6, the sum assured in a term insurance plan is crucial as it can be utilized by the family to sail through the crisis, repay debts, sustain the existing lifestyle, and fund life goals.

The claim settlement ratio of various insurance companies, as shown in Example 7, can also give you peace of mind, knowing that your claim will be settled quickly and efficiently.

A term insurance plan can help you provide a financial cushion to your family from hardships due to untoward circumstances, as explained in Example 9.

Some of the top insurance companies with high claim settlement ratios, as per Example 7, include:

By choosing the right term insurance policy, you can have peace of mind knowing that your family will be financially secure, and you can focus on achieving your life goals without worrying about the future.

When choosing a term insurance policy, it's essential to consider the sum assured amount. A policy buyer may find it difficult to choose between the several insurance products available, so make sure to consider the comprehensive benefits of a term plan with return of premium.

The sum assured amount depends on various factors, including your age, health, family members' age and health conditions, liabilities, assets, and future goals. According to Example 8, "Term insurance policy period must be decided by considering and assessing your individual and familial situation and requirements, including your age and health, family members’ age and health conditions, liabilities, assets, future goals, etc."

A good rule of thumb is to choose a sum assured amount that is 20-25 times your gross salary, as suggested in Example 11. This will help ensure that your loved ones are financially protected in case of your untimely demise.

To make your decision easier, here's a checklist to consider when choosing a term insurance plan:

By considering these factors and following this checklist, you can select an appropriate policy that meets your needs and provides comprehensive protection for your loved ones.

The claim process for a term insurance plan in India is relatively straightforward. If you need to file a claim, you'll need to inform the insurance company and provide a completed claims form, which can be found at their physical outlet or online portal.

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To ensure a smooth claim process, it's essential to have all necessary documents ready. These include the death certificate, original policy papers, claimant's statement, identity and address proofs, medical records of the deceased, FIR copy, and post-mortem report (if applicable).

The insurance company will process your claim within 30 days, but in some cases, additional investigation may be required, especially if the claim is made within three years of purchasing the policy.

Here's a breakdown of the claim process timeline:

In the event of a death claim, the nominee will need to submit the completed claim form, along with the required documents, to initiate the claim process.

To initiate the claim process, you need to inform the insurance company about your intention to file a claim. You can find the claims form at the insurance company's physical outlet or online portal.

The claims form will require you to provide details such as the cause of death, name of the beneficiary, location of the death, and personal details of the beneficiary. You'll also need to provide the policy number and name of the beneficiary.

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You'll need to arrange the necessary documents to ensure a smooth claim process. These documents include the death certificate, original policy document, ID proof of the beneficiary, and any medical reports or records of the beneficiary's demise.

The claim will be processed within 30 days, but additional steps may be undertaken by the insurer in some cases, such as when claims are made within 3 years of policy purchase. In these cases, the insurer may conduct additional investigation.

Here's a list of documents you'll need to submit:

In the event of the life assured's death, the nominee needs to intimate the insurance company and file a claim by submitting a filled-in claim form. This form requires details like the policy number, name of the claimant, date, place, and cause of the death.

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When you purchase a term life insurance policy, you're likely wondering what happens if you need to make a claim. One of the most important aspects of the claim process is the payout options available to you.

You can receive the policy proceeds as a lump sum payout, which can be a huge help in covering significant expenses or investing in other instruments.

The lump sum payout option is great for those who need a substantial amount of money in one transaction, such as to repay debts, cover college fees, or make a down payment on a house.

Alternatively, you can opt for periodic payouts, where a portion of the benefits are paid out as a lump sum, and the remaining amount is paid out in installments over a predetermined period.

This option provides a steady income stream, which can be a huge relief for families who need to cover regular expenses, such as utility bills or rent.

Here are the two main payout options available:

The payout rules vary from insurer to insurer, so it's essential to review your policy documents to understand the specific payout options available to you.

In some cases, you may be able to choose between a lump sum payout or installment or annuity payouts, depending on your family's financial situation.

Ultimately, the payout option you choose will depend on your individual circumstances and needs.

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Term insurance premiums vary from person to person depending on certain parameters.

A basic insurance plan provides a lump sum amount to the family of the person who is insured in case of their unfortunate death.

Age is a significant factor that affects term insurance premiums, with younger people generally paying lower premiums.

The premium payable for term insurance also depends on the sum assured, which is the amount that the policyholder's family receives in case of their death.

Factors that affect the estimate of term insurance premiums include the person's age, sum assured, and other parameters.

A term insurance plan provides financial security to the family of the person who is insured in case of their death.

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You can attach riders to your base policy to boost its benefits. Riders are additional benefits that come with extra costs.

Term insurance riders act as an additional layer of protection that can be added to a basic term plan. They're designed to extend the coverage to specific areas and take care of emergency situations better.

Accidental death benefit rider gives extra financial benefits to your nominees in case you die an accidental death. There is an accidental death Sum Assured which is paid to your nominee apart from the base Sum Assured of the policy.

The amount of extra premium payable for the riders depends on the life assured’s age, sum assured, policy term, and payment schedules.

The rate of premium for young insurance buyers is less as compared to someone above the age of 50.

Several factors affect the rate of premium, including the age and gender of the applicant, name of the policy, premium payment frequency, sum assured, tenure, date of birth of the applicant, rider, and proposer’s name.

To calculate the approximate premium amount, you can use a term insurance calculator by adding these details.

The premium for your Term Insurance policy is calculated based on factors such as age, gender, and medical details.

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A sum assured in term insurance is the pre-decided amount that the nominee is entitled to receive if the life assured dies within the policy term.

The sum assured should be ten to twenty times your annual income, according to the traditional thumb rule.

However, every individual’s needs differ, and it's critical to evaluate various aspects before settling on a figure.

A term insurance cover must generally be 15-20 times of your annual income, as recommended by experts.

For example, if your annual income is Rs. 6 lakhs, you must purchase a cover for minimum Rs. 90 lakhs to Rs. 1.20 crore.

The standard daily premium for a 24-year-old healthy male, non-smoker, 25 years policy term, and 25-year premium payment term is ₹15 per day.

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In India, life insurance is a crucial aspect of financial planning, especially for families with dependents.

The Indian life insurance market has seen significant growth in recent years, with a compound annual growth rate (CAGR) of 10.2% from 2015 to 2020.

With a life insurance policy, you can ensure that your loved ones are protected in case of your untimely demise.

According to a survey, 71% of Indians consider life insurance as a necessary investment for securing their family's future.

In India, the minimum sum assured for a life insurance policy is ₹2.5 lakhs, as per the Insurance Regulatory and Development Authority of India (IRDAI) guidelines.

Individuals pre/post retirement may think buying term insurance is unnecessary, but it's still a good idea to consider their financial dependents, such as a non-working spouse or child.

Term insurance premiums are tax-free, subject to certain conditions outlined in section 10(10D) of the Income Tax Act of 1961.

You may want to leave a sizable fortune to your children or grandkids, and term insurance can help you do that.

Financial responsibilities don't necessarily end with retirement, and term insurance can provide financial security for loved ones.

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You can get a tax deduction of up to Rs. 1.5 lakhs annually for the premiums paid on term insurance, under Section 80C of the Income Tax Act, 1961.

This tax benefit is available under the old tax regime.

Premium paid towards the Term Insurance Policy can avail tax benefits under section 80C and the proceeds of the insurance policy is tax free under section 10(10D) of the Income Tax Act, 1961 subject to the terms & conditions laid in the Act.

Under Section 80C and 10 (10D), the premium paid towards the term plan and the benefit amount are tax-free.

You can get a tax deduction of up to Rs. 1.5 lakhs on the premiums paid for a term plan with return of premium.

Here's a summary of the tax benefits available:

To apply for life insurance in India, you'll need to provide a photo identity proof. This can be a passport, PAN card, or voter ID card, which are all accepted by most insurance providers.

A passport is a widely accepted form of photo identity proof and is valid for life insurance purposes.

In India, the PAN card is also a commonly accepted form of photo identity proof for life insurance applications.

Your voter ID card is another accepted form of photo identity proof that can be used to apply for life insurance in India.

People of all ages and walks of life have become more observant and careful in the wake of the Covid-19 pandemic.

This increased knowledge has been particularly noticeable in India's insurance industry, where people are now wondering about term insurance and risk protection.

A term insurance plan is not only beneficial but has also become a requirement in current difficult circumstances.

In fact, it's crucial to have a term insurance plan to financially protect your loved ones in case something happens to you.

A sum assured in term insurance is the pre-decided amount that the nominee is entitled to receive if the life assured dies within the policy term, which can be utilized by the family to sail through the crisis.

This sum assured can also be used to repay debts, sustain the existing lifestyle, and fund life goals.

The Covid-19 pandemic has highlighted the importance of having a financial safety net, and a term insurance plan can provide just that.

With a term insurance plan, you can get a tax deduction of up to Rs. 1.5 lakhs on the premiums paid, which is a significant benefit.

To get a life insurance policy in India, you'll need to submit a few essential documents. These documents serve as proof of your identity, age, income, and address.

To prove your age, you can use a birth certificate, 10th or 12th mark sheet, or a passport.

Aadhaar card, Passport, PAN Card, or Voter ID are all acceptable forms of identity proof.

Your income proof should show your current income as the insurance company needs to assess your financial situation.

To verify your address, you can use a telephone bill, electricity bill, ration card, passport, or driving license.

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You'll also need to fill out a proposal form, which will provide the insurance company with the necessary information about yourself and your policy requirements.

Here's a quick rundown of the documents you'll need:

If you're looking for life insurance in India, you're likely searching for the best plan to suit your needs.

Term life insurance is a popular choice, with many Indians opting for it to cover their family's financial needs in case of an untimely death.

According to the Insurance Regulatory and Development Authority of India (IRDAI), term life insurance policies have seen a significant increase in recent years, with a growth rate of 15% in 2020.

Whole life insurance, on the other hand, offers a lifetime coverage and is often preferred by those who want to save for their children's education or retirement.

A whole life insurance policy typically has a guaranteed cash value, which can be borrowed against or used to pay premiums.

ULIPs (Unit Linked Insurance Plans) are another type of life insurance that combines investment and insurance, allowing policyholders to invest in a variety of funds.

In 2020, the ULIP market in India saw a growth rate of 12%, with many investors opting for this type of plan due to its flexibility and potential for long-term growth.

Critical illness insurance is also a popular search term, with many Indians looking for coverage that can help them manage the financial burden of a serious illness.

This type of insurance typically covers a range of critical illnesses, including cancer, heart disease, and stroke, and can provide a lump sum payment to help with treatment costs.

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In India, you can opt for a Renewable & Convertible Term Plan that combines the benefits of a term plan with a savings plan. This type of plan can be converted into a saving-cum-insurance plan to take care of your latest insurance needs.

Initially, you buy a term plan that is renewable as per the policy terms to cover your insurance needs during the initial years of work and when you are single without any dependents.

The plan can be converted at a later stage, and your premium will alter at the time of conversion.

Such plans are renewed after a specific time period to offer continuous coverage.