Life Insurance itself is categorized into different plans where the policyholder gets a death benefit in different ways based on the circumstances that might occur. One among them is the Term Insurance plan. Term insurance is an effective way of purchasing life insurance. It provides you with a lump sum amount of money when you face important phases in life.
What is Term Insurance?
As the name itself implies the meaning of the term insurance plan is the insurance offered for a particular term.
Term insurance gives a death benefit to the policy holder’s family for a fixed period or a fixed Term. It is the most popular and basic form of life insurance plan available in the whole life insurance industry. The term insurance further is divided into subcategories like
- Level term plans
- Decreasing term plans
- Increasing term plans and
- Term plans with premium returns.
Term insurance is the most affordable insurance plan under Life insurance plans and it gives only death benefits though. It does not allow any maturity benefits. Payments are made in one-time mode or lump-sum amounts are paid in case the insured dies during the tenure of the policy. So we can consider it as a high-end coverage with a low premium one can opt for very easily
Why Consider Buying A Term Life Insurance Policy?
You will get a lot of security when you buy a term life insurance policy to support your family members like your parents and spouse and dependable children if suddenly something happens to you, especially if you are the sole breadwinner.
Term insurance is also beneficial to people like:
- Newly Married people
- Taxpayers
- Retired people
- Young professionals
- Self-employed people
- Women who work for family
Apart from these basic needs or requirements, you would need term insurance for:
- To take care of your family as mentioned to make sure the needs of the family are met even in your absence.
- Term insurance helps you to pay off your loans as the family won’t have to face the burden of loans to be paid by you after something happens to you.
- It helps you to stay prepared for life’s uncertainties by helping the family achieve their long-term expenses.
If you have dependents on your family it is very important to get a term life insurance plan as the earlier you get it the better it will get because the term insurance premiums increase as per the increase in your age.
The earlier you take the cover the desired benefits can be achieved. The minimum entry age to get a term plan is 18 years and the maximum entry age is 65 years with a basic minimum policy tenure of 5 years to achieve the benefits with most of the insurance companies.
Types Of Term Plans In India
We have two types of term insurance plans in the Indian insurance market. They are
- Level Term Plan and
- TROP Plan is the Term Return of Premium plan.
Which Are The Best Term Insurance Plans In India?
Let us now look at the best insurance providers who give the best term life insurance plans in India.
| INSURANCE COMPANY | TERM LIFE INSURANCE NAME | MATURITY AGE | CLAIM SETTLEMENT RATIO | PREMIUM FOR RS.1 CR TERM COVER |
| ICICI Term Insurance | iProtect Smart Lump Sum | 85 years | 97.9% | Rs. 647 per month |
| HDFC Term Insurance Plan | Life Option | 85 years | 98.01% | Rs.709 per month |
| TATA Term Insurance | TATA MahaRaksha Supreme Lump Sum | 85 years | 98.02% | Rs. 927 per month |
| MAX Life Term Insurance | Smart Term Plan Life Cover | 75 years | 99.35% | Rs.571 per month |
| SBI Term Insurance | e-Term | 80 years | 93.09% | Rs.589 per month |
What Is Meant By LIC Term Insurance 1 Crore?
This insurance plan from Life Insurance Corporation of India is a term insurance cover that offers a guaranteed pay of Rs.1 Crore as a Sum Assured during the untimely demise of the policyholder. Thus it offers a financial backup to the insured’s family in a great way. The premiums are very much reasonable and affordable with such a high sum assured offered to the policyholder and his family.
Apart from the death benefits the policy also offers additional add-on benefits like accidental death benefit cover, critical illness cover, and terminal illness coverage.
There are three types of LIC 1 Crore Term Insurance plans they are:
- LIC Amulya Jeevan 1
- LIC Jeevan Amar
- LIC Tech Term cover
Why do we use Term Insurance Premium Calculator?
The term insurance calculator or premium calculator is a tool designed for online purposes. It concentrates specifically on calculating the premium to be paid monthly for a particular sum insured you choose before you buy it. It saves time and energy for going to the insurance company offices to try and find out if the average premium matches your budget.
The LIC term insurance premium calculator is an online tool on the official website for LIC and you can easily calculate your premium before buying a plan. This is done basically by filling in all the necessary details as per the web page.
Does Term Insurance have Tax Benefits?
The premiums paid for term insurance are tax-free up to Rs.1.5 lakhs per year under Section 80C and the death benefit given to the nominee is also tax-free for the term insurance plan during the demise of the policyholder. You would certainly need a term insurance plan if you are a taxpayer.
In conclusion of the term life insurance cover and its importance, there are some basic things we can understand while trying to buy a plan for ourselves and our family. Term insurance is cost-effective and gives you a long-time protection cover. It has a very low entry age to buy one at a very early stage of your life. It is very flexible as it has adjustable covers available. In addition to these, it has an add-on option to buy to meet your individual needs.
Common FAQs
- Should I take riders with my term insurance?
It is a very good idea to take riders or add-ons with your term insurance as it improves the effectiveness of your existing term plan. The riders you choose depend upon your requirements and needs. This makes it easier to give you a better and large cover with affordable premium rates.
- How can I decide my term for the term insurance policy I buy?
The term or tenure or your policy is dependent on how early you buy it. Also when you buy all you have to make sure of is to get the one with maximum tenure whether it is early or a bit later in your life.
- What types of deaths are covered in the term insurance policy?
The types of deaths covered can be anything from natural death or accidental or critical illness deaths unless specifically excluded from the policy wordings. The insurance company you choose is the only source you can clarify before buying your term life insurance.
- What happens if the policyholder does not die during the policy tenure?
Even if the policyholder does not die within the policy tenure, the policy will automatically terminate after the term period and any survival benefits available will be provided to the policyholder based on the insurance company who provided you with the policy.