In India, one of the most often used insurance products is term insurance. They go under the names perpetual life insurance and permanent term insurance as well. They offer protection for a certain amount of time. This can be extended for extra periods and is typically valid for ten years.
Term insurance is a kind of life insurance where the policyholder’s nominee would get the promised amount if they pass away during the policy’s term. The insured will not get any maturity money if they live to the end of the insurance duration. These plans cover a significant risk and offer cheap rates.
Things to Take Into Account Before Selecting a Term Insurance Plan
Before selecting an insurance term plan, you need to take into account a plethora of aspects, some of which are included below.
1. Insurance Against Risk
Risk coverage is the main benefit of an insurance policy. To offset the premium that the insured paid, the insurance company gives the family of the dead insured money.
This makes it possible to insure the family’s risk.
2. Diverse Schemes
Different plans are available from insurance companies to meet the needs of the insured; more premiums translate into higher benefits.
3. Health Advantages
Insurance plans pay for the costs of critical illness treatment and hospitalization.
4. Encourages a culture of saving
Savings plans are uncommon with insurance contracts. This makes it possible for members to amass riches and foster a culture of saving for the future.
5. Extra Cash
There aren’t many insurance plans that guarantee income. The insured or the insurance policy’s nominee gets paid the entire amount guaranteed regularly (usually monthly or quarterly) in the case of any uncertain occurrence.
6. Getting a Loan
You have the option to grant the insured credit from the insurance provider. Nevertheless, access to this resource is restricted to specific restrictions.
7. Tax Advantage
A person can receive tax advantages under section 80C of the Income Tax Act, 1961, by obtaining an insurance policy.
Top 5 Term Insurance Providers in India: Summary
Below is a summary of the best-term insurance policies offered in India:
1. Insurance Plan: LIC e-Term
One of India’s top providers of term insurance is LIC. Its e-term plan is a pure, non-participating life insurance policy that can only be bought online and without the assistance of an intermediary. It is implied by pure life insurance cover that just the life of the policyholder is protected.
The policyholder’s beneficiaries get the sum insured if the policyholder passes away during the life of the plan. No money is given to the policyholder, his family, or beneficiaries if they live out the whole term of the e-term plan.
- The LIC e-Term Insurance Plan’s features are available for online purchasing.
- Smokers and non-smokers are subject to different premium rates.
- Should the policyholder pass away, the amount guaranteed will be reimbursed.
- If the buyer is not satisfied with the terms and conditions of the policy, he has 30 days from the date of purchase to return the insurance with justification.
- Compared to LIC’s offline term plan, it is less expensive.
- The LIC Online e-term plan is also available to non-residents, and it will protect them overseas as long as they are in the nation for medical examinations.
The LIC e-Term Insurance Plan’s advantages:
1. Death Benefit: In case of the unfortunate death of the insured during the policy term, the sum assured shall be payable to his or her nominee, who can be a dependent family member.
2. Maturity Benefit: If the policyholder survives until the end of the policy term, no amount shall be given to him or his family members. Pure term plans do not pay anything on maturity and hence can charge much less premium.
3. Income Tax Benefit: A life insurance premium paid up to Rs.1,50,000 every year is allowed as a deduction from the taxable income each year under section 80C of the Income Tax Act.
Death Benefit amount paid to the nominee is also exempted from tax under section 10(10D).
2. ICICI Pru iProtect Smart
Pru iProtect Smart ICICI is among the finest available in India. The only term insurance plan that pays claims for the diagnosis of 34 serious diseases is this one from ICICI. An insured person may get coverage under this plan for up to 75 years of age, along with three different kinds of tax advantages.
ICICI Pru iProtect Smart’s features
- It provides the insured with lengthier coverage and fits within their budget.
- On diagnosis of any of the 34 specified serious illnesses, payment is made.
- It provides four choices for payout and provides life insurance against terminal illnesses, including AIDS.
- The opportunity to add accidental benefit at a later time is provided to the insured.
Advantages of ICICI Pru iProtect Smart:
1. Life-nominee will only get benefits if an insured person passes away or develops a terminal disease.
In addition, the policyholder will not be required to pay any further premiums if an accident results in a permanent disability diagnosis. The insured will not be required to pay any premiums; the coverage will continue as usual.
2. Life Plus: The ” Life ” option provides the insured accidental rider benefit.
3. Life & Health: The insured critical illness rider benefit is provided under the “Life” option.
It addresses thirty-four serious ailments. No matter how much the real cost of treatment is, the policyholder will still receive the entire benefit. There is just one exercise of this gain allowed throughout the policy term.
3. SBI Smart Shield
This is a straightforward term insurance policy that intends to support family members monetarily in the tragic event that the family’s primary provider passes away.
If the insured passes away, this term plan pays the nominee the amount guaranteed. After the second year, single premium customers are allowed to cancel their coverage under the plan.
The predetermined formula is used to compute the surrender value. There is no survival benefit paid by it.
4. HDFC Click 2 Protect Plus
Pure-term insurance, such as HDFC Life Click 2 Protect Plus, offers substantial life insurance at an incredibly cheap cost.
Additionally, the insurance provides other features like:
1) The choice to enhance coverage for life events like marriage and delivery
2) The rider’s accident death benefit
3) Choosing a lump sum payment and a monthly claim settlement.
Features of HDFC Click 2 Protect Plus
1. Death Benefit: The nominee will get the following benefits if the insured individual passes away while the policy is in effect:
125% of the single premium or the total insured, whichever is larger, applies to single premium policies.
Ten times the yearly premium, or 105% of all premiums paid up until the date of death, or the sum assured, whichever is larger, applies to plans other than single premium types.
2. Life Stage Protection: This extra coverage is offered under the policy’s life option and may be accessed upon the payment of an additional premium.
This coverage ensures that the insured individual is safeguarded financially when they reach certain life milestones.
5. Term Plan Plus Max Online
With its online term plan plus, Max Life offers your loved ones financial security against the danger of illness, incapacity, and death. It’s among India’s greatest term plans.
The Max Online Term Plan Plus’s features:
- The minimum age to buy the plan is eighteen; the maximum age to buy the coverage is sixty years.
- Options for regular income distribution
- Limited payment options for premium payments
- Option to add benefits upon additional premium payment, such as premium waiver, critical sickness coverage, and accidental death
- The premium payment options available to the insured include monthly, quarterly, half-yearly, or annually.
- The 30-day freelook period applies to internet plans.