Term Insurance Plans

Why should you buy Aviva Term Insurance Plans?

You might be wondering, 'Why should I buy term life insurance?' Let's explore the key term insurance benefits for you and your family when you choose a plan

• To secure your family’s financial future

  Life is full of twists and turns, and as a bread-earner of your family, it is your responsibility to secure your parents/spouse/children’s financial future. Buying the best term life insurance in india will help you secure a high assured sum with a low premium for your family in case of any unfortunate event.

• To protect your assets

  Every one of us has to take loans and debts to build a house, business, or buy vehicles. But what if something unforeseen happens to you? If you buy a life insurance term plan well in time, it will help take care of your debts all the while ensuring your family’s financial security.

• To protect against lifestyle risks

  Losing an earning member of a family can turn your loved ones’ life upside down within a second. It often makes it difficult for families to make ends meet. But if you buy term life insurance online, you can make sure that your family does not have to fend for their needs as well as wants after you.

Who Should Buy Term Life Insurance Plans

• Parents who want to secure their children’s future education
• Newly-married couples who want to gift their spouse more than a momentary gift, a gift of secure financial future
• Working women who want to ensure the financial security of their parents/spouse/children even in their absence
• Taxpayers who are looking for a tax saving plan*. Premiums paid against Term insurance plans are exempted from taxable income under section 80 C of the Income Tax Act of 1961
• Self-employed business owners and entrepreneurs as they earn no fixed income and might have a burden of personal or business loan on them.
• Young professionals who have recently started their bright future - now that you do not have family or major responsibility yet, you can start investing early so you will have a term insurance policy in place when you are ready to take the next responsibility.
• A term insurance for business owner of a Partnership business to ensure continuance of business in case of an unfortunate event
• For the Key Person in your organization

What is Term Insurance?

Term insurance is a type of life insurance that provides pure financial protection to your family for a specific period of time, also known as policy term. If the insured passes away during this period, the nominee receives full sum assured as a tax-free payout, helping the family cover expenses, maintain standard of living in their absence and repay loans if any. If the policyholder survives the term, no maturity benefit is typically paid (except in special return-of-premium plans). Term insurance offers high coverage at relatively low premiums, making it an affordable way to protect against life’s uncertainties.

How Term Insurance Works:

Let's Understand the Working Process with a Relatable Example:

Let’s understand how term insurance works with a simple example.

Rohit buys a term insurance plan and pays his premium regularly. As long as he continues paying on time, his policy remains active and his life stays covered for the entire policy term.

Scenario 1: In Case of Unfortunate Event
If Rohit passes away during the policy term, his nominee (family member) receives the full sum assured as a lump-sum payout, after claim approval.
This amount is generally tax-free as per prevailing tax laws and helps the family manage expenses, loans, and future needs.

Scenario 2: If Rohit Survives the Policy Term
If Rohit completes the policy term safely, no payout is made under a standard term insurance plan, and the policy simply ends.
However, if Rohit has chosen a Return of Premium (ROP) term plan, he may receive the total premiums paid back at maturity, depending on the policy terms and conditions.

Types of Term Insurance Plan in India

How does a Term Insurance Plan Work?

Before we talk about how it works, you should know that a term insurance plan is a legal contract or agreement between the policyholder and the insurance company. The owner (policyholder) agrees to pay for a desired term and the insurance company agrees to pay a specific death benefit to the beneficiary or beneficiaries listed in the policy. The benefits are tax-free if they meet the certain conditions. Now, let’s take a look at step-by-step breakdown of how a term insurance plan works.

• Application process: The application process is the mandate which will decide further if you will be assigned a term insurance policy or not. The process will require you to provide details related to your age, occupation, lifestyle and other things. You will also have to submit the necessary documents and proofs.
• Customise as Per Your Needs: Choose the policy term, death benefits, features, riders (additional benefits) and coverage amount as per your needs. You should look for a term insurance plan that offers you flexibility so that you can modify it as per your growing needs, when you get married or have children.
• Underwriting and Evaluation: Once you have submitted the application, the insurer will conduct a background check. This process of evaluation is also known as underwriting. After the evaluation process, you will receive the final details. Make sure you inform your nominee too and pay the premiums timely.

Features of Term Life Insurance

Let’s take a detailed look at the features of term insurance plans.

• Affordable & Accessible: Being the most cost-effective type of life insurance, premiums are lower and the cash value doesn’t accumulate in term insurance plans. This even makes it accessible to a wider range of individuals.
• Flexibility: Policyholders can choose the desired ‘policy term’ based on their needs and financial goals. The flexibility also extends to the way you pay (be it monthly, yearly, or even as a lump-sum one-time payout) and the way the beneficiary will receive the payment. For instance, the policyholder can choose from lump-sum payouts or staggered payouts, as per the family needs.
• Death Benefit: Term insurance plans provide death benefit (or sum assured) to the designated beneficiaries in case of policyholder’s death during the term. There may be no maturity benefits included in term plans. If the policyholder survives, they do not receive any payout from the insurance company. There may be exception in TROP (Term Plan with return of premium) where the policyholder will receive a lump-sum of all the paid premiums if he/she survives the term.
• Riders for Added Protection: Term plans even offer the option to get additional add-ons like critical illness cover, accidental death benefit, or waiver of premium enhance your policy.
• Tax Benefits: In addition to the above, one can even enjoy certain tax benefits. For instance, premiums paid are tax-deductible under section 80C. The death benefit is also tax-free for beneficiaries under Section 10(10D).

The best term life insurance in India will be the one that fits your needs. Compare the features, riders, and specifications to have a better understanding.

Benefits of Buying Term Insurance

• High assured sum at affordable prices

  One of the most significant benefits of life insurance term plan is that you can ensure a higher sum assured at a low premium. One secret to paying a low premium is to start early. The earlier you start, the lower the premium will be. Also, if you want to get more term insurance benefits, consider buying them online as you won’t have to pay extra charges of commission.

• Illnesses

  Critical illnesses or long-term health conditions can significantly impact your income and drain your savings due to high medical expenses. A term insurance plan with additional riders like term insurance with maturity benefits, your family can repay your debts without having to lose their financial security.

  How to Buy Term Insurance policy In India

  Buying term insurance is simpler than ever, especially with online platforms. Here's a step-by-step breakdown:

  Step 1. Assess Your Coverage Needs

  Calculate the coverage amount based on your family’s future expenses, liabilities (loans), and daily living costs.

  Step 2. Choose the Right Company

  Select a trusted company with a high claim settlement ratio, good service, and transparent processes.

  Step 3. Customize Your Plan

  Pick the policy term, coverage amount, and premium frequency. You can also add riders like critical illness or accidental death.;

  Step 4. Compare Plans Online

  Review different plans for premiums, features, flexibility, and claim settlement ratios before deciding.

  Step 5. Fill the Application Form

  Provide accurate personal and medical details. A medical test may be required depending on your profile.

  Step 6. Pay the Premium

  Complete the payment using UPI, net banking, or debit/credit card.

  Step 7. Receive Policy Documents

  Get your policy via email or post. Review all details carefully and inform your nominee.

  When to Buy a Term Insurance Plan?

  The general rule is to buy a term life insurance as early as possible because the premium is likely to increase with age and increasing medical conditions.

  Here’s how a term life insurance plan can help you at every stage of life.

  Age Group	Why You Should Buy Term Insurance
  20s	Lowest premiums; ideal for early financial protection and covering loans or dependent parents
  30s	Best for family protection (spouse, kids, home loan) with affordable premiums and higher coverage
  40s	Important to secure dependents, children’s education, and outstanding debts despite slightly higher premiums
  50s & Above	Helps cover liabilities and protect dependents; premiums are higher and medical checks may apply

  What are the payout options available with term life insurance?

  Term life insurance plans offer multiple payout options to ensure financial security for your family:

  1. Lump Sum Payout
  The entire sum assured is paid at once to the nominee. Ideal for clearing loans, debts, and managing immediate financial needs.

  2. Monthly Income Payout
  Provides a fixed monthly income for a chosen period. Helps maintain regular household expenses and long-term financial stability.

  3. Lump Sum + Monthly Income
  A combination option where part of the amount is paid upfront, and the rest is given as monthly income. Balances immediate and future financial needs.

  4. Increasing Income Payout
  Monthly income increases annually to beat inflation, ensuring better financial support over time.

  Choosing the right payout option depends on your family’s expenses, liabilities, and future goals.

  How Gender Affects Premium Rates?

  Studies show that women typically have a longer life expectancy, which often results in lower insurance premiums compared to men.

  Age	Coverage	Male (Non- Smoker)	Female (Non- Smoker)	Difference %
  20	1 Crore (60 Years)	12261	10984	10%
  30	1 Crore (50 Years)	18119	14714	19%
  40	1 Crore (40 Years)	29779	23415	21%
  50	1 Crore (30 Years)	51822	40317	22%

  Note: The premium shown above is calculated for a regular premium payment mode with annual payment frequency.

  How Smoking and Non-Smoking Affect Premiums at Different Ages?

  This table compares premium rates for smokers and non-smokers, highlighting how lifestyle habits—especially smoking—can significantly impact the cost of term insurance.

  Age	Coverage	Male (Non- Smoker)	Male (Smoker)	Difference %	Extra Premium (Yearly)
  20	1 Crore (60 Years)	12261	18965	55%	6704
  30	1 Crore (50 Years)	18119	28495	57%	10376
  40	1 Crore (40 Years)	29779	47677	60%	17898
  50	1 Crore (30 Years)	51822	84366	63%	32544

  What should be the ideal duration of a term insurance?

  Consider the below aspects to select the right duration for your term life insurance plan.

  1. Cover Your Financial Responsibilities: Choose the best term insurance plan: that lasts until your major financial obligations are covered like your child’s education, marriage, home loan or any other long-term debt.

  2. Until Your Children Are Independent: If you have young kids, your term should last until they become financially independent, often around age 22–25. For example, if your youngest child is 3, a 20 or 25-year term insurance plan would be appropriate.

  3. Until Retirement Age:Many people choose a term that lasts until they retire or expect to have built enough savings and assets. If you are in your 30s or 40s, you can choose term plan lasting up to 60 or 65 years.

  4. If You’re Young and Just Starting Out: Locking in a 20 or 30-year term while you’re young and healthy can help you get lower premiums.

  While these are general guidelines, the ideal duration for a term life insurance policy depends on your personal and financial circumstances. Find a balance between your future goals and present conditions to choose the right policy term.

  Factors That Impact Term Insurance Premiums

  Your term insurance premium may depend on the following factors:

  • Age: Younger individuals are typically charged lower premiums because they’re considered lower risk. As age increases, so does the likelihood of health issues, which may lead to higher premiums.
  • Health and Medical History: If you are diagnosed with any critical condition like diabetes, heart disease, or high blood pressure, you may have to pay higher premiums.
  • Lifestyle Choices: Every lifestyle choice that you make creates a difference. Smoking, alcohol consumption, and other high-risk habits can increase your premium significantly.
  • Gender: Statistically, women tend to have longer life expectancy which is another key factor in deciding life insurance premiums.
  • Occupation: If you are involved in jobs that involve physical risk such as mining, construction, or firefighting, you may have to pay higher premiums for your term insurance plan.
  • Policy Term & Sum Assured: Longer policy durations and higher coverage amounts generally mean higher premiums.
  • Riders and Add-ons: If you’re opting for additional benefits within your term insurance plan, your premiums will increase.

  When purchasing a life insurance, make sure to maintain transparency throughout the situation. Do not hide any medical condition or habit that you’re involved in, as it can even lead to denials later.

  Documents Required for Term Insurance Policy

  Here are the documents you will have to submit if you’re planning to buy term life insurance plan.

  • Identity Proof: Aadhar Card, PAN Card, Voter ID, Passport, or driving license.
  • Address Proof: Aadhar Card, Voter ID, Passport or utility bills like electricity/ water or gas.
  • Proof of Age: Birth certificate, passport, school leaving certificate or Aadhar card.
  • Income Proof: Salary slips, bank statement, Form 16 or income tax return (ITRs).
  • Other documents: Medical reports and documents, recent passport-size photographs, beneficiary details, proposal form, policy document and bank details.

  How to claim term insurance?

  Here is a step by step guide to how to claim term insurance:

  • Inform the Insurance Company: Notify the company from where the policy is bought from about the policyholder’s demise at the earliest through their helpline, website, or branch.
  • Collect Required Documents: Gather all necessary documents such as the claim form, original policy document, death certificate, nominee’s ID and address proof, and bank account details.
  • Submit the Claim Request: Fill out the claim form accurately and submit it along with the required documents.
  • Provide Additional Documents (if needed): In case of accidental or early death, you may be asked to submit medical records, FIR, or post-mortem reports.
  • Verification Process: The insurance company reviews and verifies all submitted details and documents.
  • Receive the Claim Amount: Once the claim is approved, the amount is transferred to the nominee’s bank account.
  • Track the Claim Status: Keep checking the status and follow up, if required, to ensure timely processing.

  How to Avoid Claim Rejection?

  Here is a step by step guide to how to claim term insurance:

  • Provide Accurate Information before Policy Issuance: Share complete and truthful details about medical history, lifestyle habits, and existing conditions while purchasing the policy.
  • Pay Premiums on Time: Ensure timely premium payments to keep the policy active and valid.
  • Understand Policy Terms: Carefully read the policy document to know the coverage, exclusions, and conditions.
  • Keep Documents Updated: Maintain and update important documents such as ID proof, address proof, and bank details.
  • Inform Nominees: Make sure the nominee is aware of the policy details and claim process.
  • Update Changes Promptly: Inform the insurance company about any changes in contact details or personal information.
  • Maintain Proper Records: Keep copies of all policy-related documents and communication for smooth claim processing.