Term Life insurance 101
What is a Term Plan?
A term plan is a traditional form of life insurance that provides financial protection to your family in your absence. It insures the life assured with a large life cover at a relatively low premium rate.
Why buy a Term insurance Plan?
- When you have a family, the need for protecting your loved ones becomes one of the top priorities in life. Term Insurance Plans help a person be prepared for Life’s uncertainties.
- High Life Insurance Coverage brings assurance that the dreams that you have for your family can be fulfilled, even in your absence.
- Lower Premiums as compared to other Life Insurance Plans that don’t burn a hole in your pocket for a high protection cover.
- Additional coverage against accidents and critical illness through riders helps to amplify the protection offered by a Term Life Insurance cover.
- You can avail Tax Benefits on premiums paid under Section 80C and claim payouts are exempt from taxes under Section 10(10D) of the Income Tax Act.
*Tax Benefits are as per the current Tax Laws.
What are the factors that affect the Term Insurance premium?
The insurance company considers –factors like age, gender, policy term, sum assured, etc. while deciding the premium amount
What are riders/add-on benefits?
“Riders” or “add-on benefits” are attached to your base insurance plan. These can be purchased at a nominal rate along with your life insurance plan. They allow the policyholder to add additional protection to their life cover.
Riders and add-on benefits are useful as they reduce the number of insurance policies you may need to protect against Accidents, Disabilities, Critical Illnesses, terminal Illnesses, etc.
What is a terminal illness benefit?
Terminal Illness benefit pays out a lump sum amount to the policyholder if diagnosed with an end-stage incurable illness, as confirmed by the medical practitioner(s). The policyholder can claim the terminal illness benefit so that they can have dignified and more comfortable last days with their loved ones.
*Check product brochure for further details on terminal illness benefit offered by the insurer
Does term insurance covers death outside India?
Yes, deaths outside India are covered in term insurance plans, However, the company may reject the claim if the death occurs due to travelling to unsafe countries. It is best to talk to your financial advisor for finer details for each product.