Term Insurance Plans

Why should you buy Aviva Term Insurance Plans?

“Why should I buy term life insurance,” you must be thinking. We have discussed the benefits you and your family recieve when you buy term life insurance.

• 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 business owner of a Partnership business to ensure continuance of business in case of an unfortunate event
• For the Key Person in your organization

Also Read: Is Term Insurance For Me?

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.

Term Insurance Features

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
• Protection against liability

The unforseen demise of a bread-earner can take a huge toll on their family, emotionally as well as financially. And if you have taken loans and debts, your family will have to fend for the money to repay your debts after you.

With term insurance with maturity benefits, your family can repay your debts without having to lose their financial security.

Term Insurance Plans by Aviva Life Insurance

It’s not just a term insurance plan – it’s a safety net you cast around your loved ones

How to Buy Term Insurance?

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

Assess Your Needs

• Calculate how much coverage your family would need in your absence.
• Consider liabilities (like loans), future expenses (like education), and daily living costs.

Compare Plans

• Use trusted platforms online or check with insurance advisors to compare features, premiums, claim settlement ratios, and add-ons.
• Look for plans with high claim settlement ratios and flexible premium options.

Choose the Right Insurer

• Pick a reputable insurer with strong customer service and transparent claim processes.

Customize Your Plan

• Select the sum assured, policy term, and premium payment frequency.
• You can even opt for additional riders like critical illness or accidental death.
• Make sure to read the exclusions and terms carefully.

Fill the Application Form

• Provide accurate personal, health, and financial details. Misrepresentation or hiding the facts can even lead to claim rejection.
• Based on your age, health and coverage amount, you may also have to undergo a medical test.
• The underwriting team will also assess your medical history and financial aspects before approving your life application form.

Pay the Premium

• Make the payment offline or online via your desired payment method like UPI, debit/credit card, or net banking.

Receive Policy Documents

• Once approved, you’ll get the policy documents via email or post. Store them safely and inform your nominee. You should also consider reviewing the documents at this stage to figure out if the insurer has missed out on some key detail.

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.

In your 20s

• Best time to lock-in the lowest premiums.
• Ideal if you have dependents like parents or education loans.

In your 30s

• You’re likely taking on responsibilities like a spouse, children, or a home loan. So, you can go ahead and explore different types of life insurance plans including term, ULIPs or even retirements.
• Premiums are still quite affordable with broader coverage options.

In your 40s

• If you already have dependent or you're already funding a child's education or paying off large debts, you cannot ignore the importance of a life insurance plan.
• Premiums may be slightly higher, but it will safeguard your dependent’s future

In your 50s and beyond

• It is rightly said, ‘better late than never’. While buying a life insurance at this stage can be costly, there can be multiple benefits, especially if you have financial dependents or unresolved liabilities. The process may involve a bit more serious medical screening.

Don’t keep waiting for a sign. If you are able to find an insurance that fit your needs, you should purchase it. Additionally, depending on the policy and insurer, there will be minimum entry limit and maximum age limit. Take that into consideration and other terms before making the final choice.

How to select the right duration for your term insurance?

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

1. Cover Your Financial Responsibilities: Choose a term 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

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.