Term Insurance

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What is Term Insurance?

Term Insurance is a life insurance plan which will provide financial coverage to the beneficiary of the insured person for a definite period of time.

The nominee can be able to claim death benefits from the insurance company in the event of death of the term insurance policyholder during the policy term.

The death benefit is payable to the beneficiary who is usually a family member. A lump-sum amount or a combination of lump-sum and monthly amount can be provided as per the requirement.

Some Insurance Companies cover partial disability or permanent which results in the ruination of the policyholder’s regular income.

Note: In the case of survival of the policyholder the coverage at the earlier rate of premiums will not be guaranteed after the policy is expired.

The buyer either has to obtain extended coverage with different payment conditions or else waive the coverage entirely icon.

Why You Should Buy Term Insurance?

Never be short-sighted. Secure your family’s future with term insurance. In the event of an unpredicted situation, there will be no one to take responsibility that is why term insurance is important.

The lump sum given to the family will be a death benefit that can bring financial security and will help to pay off the liabilities. If you are the bread earner of the family it will be strong support for them.

Term Insurance Plans in India

Insurers Term Plans Maximum Maturity Min Sum Assured Claim Settlement Premium (for cover amount 1cr.)
HDFC Life 3D Plus Life Option 70 years Rs. 25 L 97% Rs. 1073/month
MAX Online Term Plus One Time Lumpsum Plan 70 years Rs. 25 L 97% Rs. 893/month
Aegon Religare iTerm 100 years Rs. 25 L 97% Rs. 1286/month
PNB Metlife Mera Term Plan-Full Lumpsum payout 99 years Rs. 10 L 91% Rs. 1401/month
Bharti Axa online term + Lumsum 85 years Rs. 50 L 90% Rs. 1509/month
ICICI iProtect Smart Lumpsum 75 years NA 96% Rs. 1238/month
BAJAJ eTouch Lump Sum 70 years Rs. 50 L 91% Rs. 1266/month
AVIVA iLife Total Protect 75 years Rs. 50 L 90% Rs. 1114/month
Edelweiss Tokio TotalSecure+ Lump sum 80 years Rs. 25 L 93% Rs. 12541/year
Birla Sun Life Life BSLI [email protected] Lump Sum 70 years Rs. 30 L 94% Rs. 1070/month
Edelweiss Tokio MyLife+ Lump sum 80 years Rs. 25 L 93% Rs. 1046/month
Aegon Religare Life Plus 80 years NA 97% Rs. 999/month
Aegon Religare Life & Health 80 years NA 97% Rs. 985/month
Aegon Religare Life & Health Plus 80 years NA 97% Rs. 999/month
Aegon Religare Life 80 years NA 97% Rs. 985/month
SBI eShield 60 years NA 96% Rs. 943/month
FG Generali Flexi Online Term-Lumpsum 75 years Rs. 50 L 89% Rs. 904/month
DHFL DHFL Life 75 years Rs. 25 L 90% Rs. 903/month
KOTAK e-Term 75 years Rs. 25 L 91% Rs. 872/month
TATA AIA Tata Sampoorna Raksha Lumpsum 70 years Rs. 50 L 96% Rs. 865/month
HSBC iSelect Lumpsum 70 years Rs. 25 L 94% Rs. 854/month

Premium Payment Mode: Single | Regular – Yearly, half-yearly, quarterly, and monthly.

Term insurance gives flexible plan options to match the need of every individual. You can choose:

  • The amount of preferred sum assured.
  • Premium payment option which can be either one-time or regular.
  • Term of the policy.
  • Add on protection

Benefits of Term Insurance Plan

  • Get Lump sum amount in case of sudden death.
  • Pay off all your liabilities and loans.
  • Helps your family to live with pride.
  • It also takes care of family in case of your disability or critical illness.
  • Provides additional income in case of loss of income due to accidental illness or disability.
  • Get Lump sum amount if critical illness is determined.
  • Additional sum insured in case of accidental death icon.

Key Features of Term Life Insurance Plans

There are various benefits of the term insurance policy like-

  • Affordable Premium Option

Term Insurance policy premium provides the lowest premium options.

The policyholder can choose a premium amount according to your suitability. The premium can be paid in a single payment or either monthly, quarterly, or annually.

  • Return more than the Investment

Some customer faces the difficulty that with zero returns on the survival of the term in the term insurance policy one should buy or not?

So in that case policyholder should choose the company which will give the return of the entire policy premium amount paid by the policyholder under the tenure of the term insurance plan. This will be covered under the term return of the premium plan of the company.

  • Multiple Options

An insurance company provides the policyholders with the option of various term plans. The policyholder can choose the term insurance policy as per the need.

One can choose from single or joint-life term insurance plans. In case of a change in the marital status, the policyholder can extend the policy for the spouse.

  • Add – on benefits

There are many benefits that are not covered by the term insurance plans for the individual. Insurance companies recognize the need for the policyholder and they provide various add-on plans as per the need of the customer.

Premium amount hike with the add-on in the policy that provides cover for the cases like permanent disability, critical illness, and accidental death.

  • Death Benefits

All forms of death are covered (even terrorist attacks)

* *Note: In the event of the death of the insured by suicide within the first year of the policy or with 1 year of the date of renewal of the death benefits provided are not applicable.

  • Tax savings

The premium amounts paid where payouts are made in the case of death are free of tax. In a legal way, there are various acts of the Income Tax Act under which term insurance plan covered and thus one enjoy the benefit of free of tax policy.

How to Select the Best Term Insurance Plan:

  • Company reliability: The company’s solidity and position are very important in any sector of business especially life insurance to gain the trust of customers. The position in the household sector, the FICO score on their funds gathered.
  • Expenses: We realize that costs have an important role to play in terms of safety plans. Hence, search for plans with the least costs which lead to less premiums in the same cover or you can choose a company that provides discounted premiums to no smokers.
  • Convenience: Over the range of life coverage plans, one can find the term plans online which shows the most extreme enhancement. For one, price and by additional premium rates have been lowered appreciably and this process is on.
  • Enhanced Cover: It is a unique option given by the online terms’ plans of specific insurers the chance to improve their life cover at their difficult situations of the life of the policyholder.
  • Claim settlement ratio: The proportion explains what numbers of settlements have been done per 100 claims. Hence, a claim settlement proportion of 100% indicates that the organization has settled each claim.
  • Solvency ratio: The constancy and financial goodwill of the insurance agency are shown by its solvency ratio. It provides an understandable picture of whether it can make reasonable pending claims and develop the business without becoming insolvent
  • Riders: The one who gives you all secured edges is the best term insurance plan for you. One approach to reach this is through riders. An insurance rider is extra to the essential plan that offers benefits far beyond the subject of the policy.

Term Insurance India – Types of Plans

A term insurance plan is a policy that will charge only for the cost of insurance that you need to secure your family. However, still under the same there are many alternatives accessible that you can find as per your needs.

  • Pure term plan

It is the easiest and the cheapest form of term insurance plan. In this, the insurance company will pay a fixed sum assured amount to the heir or applicant in case of death of the policyholder.

Although in such cases where the insured survives, he/she will not be getting anything in return. Usually, the premium for term plans depends upon three things that include age; term of the policy and the sum assured you choose.

The term plans are the cheapest insurance product, still, you can get a discount if you buy them online.

  • Return of premium plan

It is true that not everyone would be fine with the concept of paying for years and will get nothing in the end. Return of premium plan is for those people.

Investing in this plan would be little expensive as compared and under the same you will surely get a return of premium.

Under this plan, the insured will surely get a return at the end of the policy, but in case he dies during the policy term then the nominee would be receiving the sum assured amount.

  • Decreasing plan

Under the decreasing form of term insurance plan, the sum assured decreases every year just like the pending loan amount. You can buy this plan at very less charges as the sum assured will decrease every year.

Banks usually collect the single premium type of this plan and pay the premium on behalf of you. Also the amount of premium gets included to your total debt liability, which you pay with the help of an increased EMI.

  • Increasing plan

Just opposite of a decreasing plan. Under this the amount of cover will increase by about 5% every year until your sum assured increase by 50% or doubles up in value.

The premiums of these plans are on the higher side as the insurance company risks large amount every year.

  • Convertible plans

It is a combination of saving plan and a term plan. It is a plan, where you buy a term plan, which you can convert into an investment-cum-insurance plan later. However, your premium may change at the time of conversion.