Basically, Term insurance is a type of life insurance plan that gives coverage for a particular period of time or years. This type of life insurance provides financial protection to the nominee in case the policyholder dies during the policy term. So here the insurer provides coverage for a certain ‘term’ in exchange for a specific premium paid over a period of time. Term Insurance policies provide high life cover at lower premiums. This article is full of information on the best term insurance plans in India. First, let us discuss in detail the definition and features of a term insurance plan.
FAQ
Simply, Term insurance is a specific life insurance policy. It provides coverage for a specific period of time or a “term” of years. If the insured person dies during the time period specified in the policy and the policy is active, or in force, a full death benefit will be paid.
The term plan works pretty simply. Like, when you buy a term life policy from an insurance company, they promise that it will pay your beneficiaries a set amount if you die during the policy’s term. In exchange for this, you pay a regular monthly premium to the company for the duration of that term.
Though term insurance is taken as a liability, not an investment, term insurance is done to financially protect your loved ones. A policy’s death benefit could help to pay debts you leave behind. So, basically, it is financial security for your family on behalf of you.
The term insurance does not have any cash value. The premium you paid for the insurance increase after the initial guarantee period. It is indeed cost-prohibitive over time.
What is a Term Life Insurance?
Term life insurance is a type of life insurance policy that covers the insured for a specific period of time, usually 1 to 30 years. If the insured dies during this period, their beneficiaries will receive the death benefit from the policy. Term life policies typically have lower premiums than permanent life insurance and are often used as an affordable way to protect loved ones in case something unexpected happens.
Benefits of Term Insurance Plans
Here are some top benefits of term insurance.
Affordability
If you think about the affordability of term insurance, then there are various plans on it and they affordable. So, Term insurance plans are a combination of affordability with simplicity. Lile, you can get a life cover of 50 Lakhs at premiums as low as 17/day*
Tax Benefits
Here, another attraction of the insurance plan is tax benefits. You can easily avail tax benefits under section 80C of the Income Tax Act, 1961, for the premium paid and sum assured of your term insurance plan.
Easy Buying
Now, the time has changed. Instead of stepping out of your home and going to the insurance company, you can buy term insurance from your home only. Yes, now term insurance of different companies is easily available online.
Flexibility in Premium
You have the option to pay premiums on a monthly, semi-annual, or annual basis. Also, there are also term insurance plans that offer single-pay premium options.
Protection against Liability
During our lifetime, we buy a car, house, etc. In case a mishap occurs to you – accident, disability, or demise – the term insurance plan replaces your financial role in the family.
What are the Different Types of Term Insurance?
There are various types of term insurance besides the level term policies we’ve outlined so far. Each policy has its pros and cons, depending on the needs of the policyholder.
Convertible Term
Convertible term life insurance allows a term insurance policy, which has a limited number of years before expiring, to convert into whole-life or permanent insurance. The major benefit of convertible insurance is that the policyholder doesn’t have to submit to a medical exam, nor are any health conditions considered when the term policy converts to permanent insurance.
Increasing Term
Some policies allow you to increase the death benefit as time goes on. The premium increases as well, but it allows policyholders to pay lower premiums early on in life when they have a lot of bills and expenses. The increasing term prevents having to qualify for another policy at an older age to get the added benefit as would be the case with traditional term insurance.
Mortgage Term or Decreasing Term
A mortgage term or decreasing term policy is the opposite of the increasing term because the death benefit amount decreases over time. The goal is to match the decline of the term benefit to the reduction of the policyholder’s outstanding mortgage. The idea behind this strategy is that you don’t need as much life insurance if you have less mortgage debt. However, although the premiums are smaller than term insurance, the premium payments remain constant even as the benefit declines.
Annual Renewable
As each year passes, the term insurance is renewed but for a higher premium since the policyholder is a year older. The benefit of annual renewable term insurance is that the coverage is guaranteed to be approved each year. However, it may not be the most cost-effective for everyone due to the increased costs over time.
What are the two Best Term Insurance Plans in India?
These are some of the best term insurance plans in India.
ICICI Prudential Term Insurance Plan
You can directly go to their official website and search for a term insurance plan. There are lots of benefits. You can calculate your payable premium by insurance calculator.
Key Benefits of IPRU Term Insurance
Large Cover at Affordable Rates
Get ₹ 1 Crore life cover starting at ₹ 490 per month. Your premiums remain fixed for the entire policy duration.
Option to Increase Life Cover
Life stage benefit gives you an option to increase the cover after Marriage (50% increase), 1st (25% increase) & 2nd (25% increase) childbirth, without any medicals. Additional premiums will be calculated based on the increased life cover and remaining policy term as per your age at the time of each such increase.
34 Critical Illness Benefit Option
This optional benefit gives a full claim payout on the first diagnosis of 34 Critical Illnesses like cancer, heart attack and kidney failure. No hospital bills are required. You stay covered for a maximum of 30 years without any change in premium.
Permanent Disability Benefit
In case of permanent disability due to an accident, all future premiums are waived off, and the life cover continues for the remaining policy duration. This benefit comes in-built into your policy without any extra cost to you.
100% Terminal Illness Payout
Terminal illnesses are not only life-threatening but can also spell financial ruin. This benefit helps you fight those illnesses by paying 100% of your life cover amount before death (covers AIDS as well). This benefit comes in-built into your policy without any extra cost to you.
Tax Benefits up to ₹54,600
Premium paid and benefits received are eligible for tax benefits U/S. 80C and 10(10D).
HDFC Term Insurance
With HDFC term insurance plan you can assure yourself that your loved ones will be financially secure in your absence. The term plans have a wide variety of choices to cater to a wider audience and their individual requirements.
Benefits of HDFC Term Insurance
- Affordable premiums – HDFC term insurance plans are cost-effective and affordable with premiums that do not put a financial burden on you.
- Flexibility – HDFC term insurance plans offer many different coverage options for selection, giving you freedom of choice in term plans as per your individual requirements.
- MWPA enrolment benefit – You can enrol in the HDFC term insurance plans under the MWPA act to ensure that your death benefit is secured only for your loved ones legally.
- Tax benefits – Tax benefits can be availed in the HDFC term plans for premium payment and benefit receivable under sections 80C and 10(10D) of the Income Tax Act, 1961.
- Lower premium for a healthy lifestyle – HDFC term plans also reward you with a lower premium for maintaining a healthy lifestyle.
Types of HDFC Term Insurance
- HDFC Life Click 2 Protect 3D Plus
- Click 2 Protect Health
- HDFC Life Click 2 Protect Plus
Conclusion
Ideally, you should take a term insurance policy as soon as you start earning. Term insurance plans are necessary if you have financially dependent family members. Whether you are 18 years of age or 65 years, a good Term Assurance Plan will definitely cover you. Therefore, you will get complete peace of mind for your family.