Term Insurance is the simplest and purest form of life insurance. It provides financial protection to your family at the most affordable rates. With term insurance, you can get a large amount of life cover^ (i.e. sum assured) at a relatively low premium rate. The benefit amount is paid out to the nominee in case of the death of the person insured during the term of the policy.
If you are the primary earner, buying a term plan would take care of the monthly financial needs of your family in your absence.
You might have taken a loan like an education loan, home loan, personal loan, or vehicle loan. The repayment of these loans can financially weigh down your family in your absence. The proceeds from your term insurance plan pay off your loans and ensure that the financial burden does not fall upon your family.
The probability of developing a lifestyle disease increases with age#. Some term insurance plans offer critical illness protection which not only protects your family in case of uncertain eventualities but also during your lifetime. Critical illness2 benefit provides you financial security against various life-threatening health conditions such as cancer & heart attack.
When you understand the features of a term plan, you can have a clearer idea of the meaning and benefits of term insurance. Some of the hallmark features of term plans include the following:
Term insurance policies are some of the most affordable life insurance products. The premiums you have to pay for term plans are usually much lower than other life insurance policies. You can get life cover^ up to ₹ 1 crore for a monthly premium as low as ₹ 378/-*.
With the minimum eligibility age of 18 years, you can get term plans early in life. Buying a term plan at a young age helps you get sizeable coverage at very reasonable premiums.
Term insurance provides coverage for a specified number of years, known as the policy term. In case of an unfortunate event during this period, your nominee will receive the sum assured in your policy.
Term insurance tenures can start from 5 years and extend up to your 99th birthday if you choose the whole life insurance option. Depending upon how long your loved ones might need your financial support, you can select the right policy term for your needs.
Term insurance provides financial protection to your family in case of an eventuality. It is not meant to be used as an investment instrument. Thus, it does not offer any return on the premium you pay in the fortunate event that you survive the policy tenure.
However, the very absence of this investment component makes term plans so affordable. One of the unique features of term insurance is that your entire premium goes into securing your insurance cover. No part of it is deducted for investment purposes. Thus, you can get substantial coverage, enough to cover the current and future expenses of your loved ones at pocket-friendly premiums.
Also, you can opt for term insurance with a return of premium feature if you want some maturity benefits. After the policy matures, you will get back the entire premium you had paid throughout the policy tenure with such plans.
You can pay your term plan premiums as per your convenience. Annual, semi-annual, quarterly, or monthly premiums are some of the premium payment frequencies you can choose. Such regular premium payments are ideal for salaried individuals with a stable income.
You can also go for a one-time, lump sum premium payment if you have some surplus funds lying unused. Alternatively, you can go for a limited pay option and pay off your premiums within the initial few policy years. Your life cover^ remains active for the entire term plan tenure.
Thus, if you are self-employed, with variable cash inflows, you can take advantage of such single pay or limited pay options and keep your loved ones financially protected against life’s uncertainties.
A term plan keeps your family secure from financial challenges if an unfortunate event occurs. It provides a life cover^ of your choice at affordable premiums. With this life cover^, your loved ones get an assured sum in case of an unwanted incident during the policy period. The payout can help your family avoid compromising with the lifestyle you want for them in your absence.
You can add riders or add-on benefits to your term insurance policy to extend the scope of your base coverage at a nominal cost.
Various types of riders are available with term plans, such as:
Term plans allow you the flexibility to update your policy as per the changing financial needs of your life. You can increase the sum assured or add riders to your plan at your life’s key milestone events.
Thus, after marriage, or when you welcome your children into your family, and your financial liabilities increase, you can enhance your coverage. It enables you to provide your loved ones with the right financial backup against unforeseen situations.
Term plans offer many tax6 benefits. Under Section 80C of the Income Tax Act, 1961, you can claim deductions up to ₹ 1.5 lakh on the premium you pay for your term plan. The payouts are also tax6-exempt under Section 10(10D). Moreover, with an add-on health-related rider, you can avail of tax6 benefits under Section 80D on the premium paid for the rider.
This benefit waives off all your future premiums in the case of a disability9 caused by an accident. Hence, even if you fail to pay the premiums due to any income loss from a disability, you will still be able to keep your family’s future secure.
Get all these features and secure yourself and your family with ICICI Pru iProtect Smart, which ensures a safety net for your family in your absence.
Term insurance is ideal for young professionals as it provides financial security during the early stages of their careers. It offers insurance payout that can help to pay back loans and other forms of debt while securing their parents and other dependents in case of an unfortunate event.
Term insurance is essential for newly married couples as it can safeguards their financial future. The insurance coverage^ can ensure stability and security in case of unforeseen events.
Working women should consider term insurance as it provides financial independence and protection for their families in their absence. It offers insurance coverage^ that can safeguard the children, spouse and parents, enhancing overall financial security for the family.
Housewives contribute significantly to the well-being of the family and their absence can take a toll on the family. Term insurance contributes to the financial stability of the entire family in the absence of the homemaker, ensuring their well-being and security.
A term insurance plan in India aligns with the financial planning of all kinds of taxpayers, irrespective of their age, income or gender. The taxpayers can avail deductions of up to ₹ 1.5 lakh per annum for amount paid towards the premium of a life insurance policy subject to the conditions prescribed under Section 80C6 of The Income Tax Act, 1961. Additionally, the proceeds from the term insurance is exempt subject to the conditions prescribed under Section 10(10D)6 of The Income Tax Act, 1961.
Term insurance plays a crucial role in helping parents protect the financial interests of their children in their absence. It can cover expenses such as college education and healthcare, ensuring their children’s well-being.
Term insurance creates a vital financial safety net for self-employed individuals. Since self-employed individuals may not have access to employer-sponsored insurance plans, purchasing their own policy can be critical for their financial security.
NRIs can purchase term insurance in India to protect their loved ones. Term insurance can offer NRIs additional financial protection and safeguard their loved ones financially. NRIs can also claim tax6 benefits on their term plans in India, which enhances their overall financial planning and security.
You can get a simple, quick and clear answer to this question by calculating your Human Life Value or HLV. HLV is an easy-to-use numeric method of calculating the amount of Life Cover^ that you may need. The basic thumb rule that can be used to find out your HLV is as follows:
Age In Years | Income Multiple |
|---|---|
18-35 | 25 times of your annual income |
36-45 | 20 times of your annual income |
46-50 | 15 times of your annual income |
51-60 | 10 times of your annual income |
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