Clarify All Doubts Related To Term Insurance
Term insurance plan is a life insurance policy which offer you financial coverage in case of loss of life during the term. You pay a yearly premium against the policy to the insurance company. This policy gives a death coverage to the policy-holder and offers the sum assured to the family or next of kin. Term insurance policy offer a high coverage for a low premium. This plan ensures that the future of your family is safe even after your demise.
Why You Should Buy Term Life Insurance Plan from Paybima?
Paybima offers you a comprehensive place to buy term insurance online. We ensure that you have access to all the information before you make a decision. We show you plans customized for your requirements. Compare term insurances through our portal and buy one that covers your needs. Paybima assists you throughout your policy journey. We give you constant updates on your policy and send reminders for premiums and renewals. All of which can be carried out through Paybima’s portal.
Here’s why you should buy a term insurance policy by Paybima:
- We work to support you
- Helping you plan the cover
- Make it easy to compare and choose
We understand that the term insurance policy offers a cushion for your family to fall back on. Hence, we help you choose a policy that best suits your needs within your budget. We are there with you through the entire process from helping you choose to facilitating the decision to buy term insurance online.
Paybima understand that the burden of a car loan, home loan or business loan will fall on your family’s shoulders in the unfortunate circumstance of your demise. When helping you choose a term life insurance policy, we take into account this unforeseen burden you family might face. You can count on us to help you calculate the amount needed for today and tomorrow so that your family can live comfortably.
Our lives have become extremely busy. Our portal facilitates comparison of the best policies in India on one page. You can get information on tenures, premiums, and coverages without visiting the insurance company’s website. Tables and charts help you compare the different terms and conditions. You can calculate and take an informed with which terms insurance to buy online.
Different Types of Term Insurance Plans in India
Each insurance company in India offers different types of term insurance plans. These insurance plans are available online and offline. They have specific features and you can decide which one suits your requirements. But you need to know what entails in each type of a term insurance policy before you choose. Below are the details on different types of plans available so that you can pick the right one.
- Level Term Plan
- Standard Term Insurance Plan
- Convertible Term Insurance Plan
- Term Return of Premium (TROP) Plan
- Group Term Insurance Plan
- Increasing & Decreasing Term Insurance Plan
- Single Life and Joint Life Term Insurance Plan
A level term insurance plan is simple. There is a fixed sum assured during the term. This sum is offered to the family if the policyholder loses their life during the term. This type of plan is available all over India. Almost all term insurance companies offer this plan. You can even buy level term insurance online.
A standard term insurance plan offers cover to the beneficiary against certain risks. The policyholder pays a premium account, generally yearly, to maintain this term insurance policy. This is the most opted term insurance plan and often considered the best out of all the types.
A Convertible term insurance plan offers you the flexibility to convert the term insurance policy to another type of policy. For example, you have a convertible term insurance for 30 years, but after 5 years you want to convert it into an endowment plan. The Convertible term insurance policy allows you to do so.
A Term Return of Premium insurance policy offers to return the premium paid if the policyholder survives the term. This type of term insurance policy is gaining a lot of attention. It offers a great deal of advantage to the insured since all the money invested is repaid at the end.
A group term insurance policy is opted mostly by business and organizations. Unlike an individual policy, this plan covers all the members of a group or a family. They offer similar benefits as that of an individual term insurance policy. But they cover illness and risks that are usually excluded from individual policies
An Increasing term insurance plan increases the sum assured with every passing year. This is mostly to cover inflation and rising costs. A Decreasing term insurance plan reduces the sum assured with every passing year. This type of plan is usually taken to repay a loan or a debt. If the policyholder loses their life, the sum goes towards repayment of the remaining loan.
A single life is a regular Individual term insurance plan. A Joint Life Term Insurance plan is best suited for couples with children. They offer the same advantages and benefits to both the policyholders. It is also extremely cost-effective than buying two individual term insurance plans.
Top Benefits of Term Insurance Plans
A term insurance plan is immensely beneficial for an individual. Especially if you have people depending on you financially. These are the only plans designed for the purpose of protecting your family in difficult times. It covers critical illness and offers security in loss of life. But here are a few core benefits for term insurance plans:
- Safety for Loans and Liabilities
- Cover Critical illness
- Higher Sum Assured at Affordable Premiums
- Tax Benefits
- Support in the case of Disability
- Add-on Protection
If you have taken up loans in your life, they will have to be repaid if something happens to you. The burden of repaying will fall on your family’s shoulders. Term life insurance policy will ease this burden by taking care of all your financial responsibilities. The sum can be used to repay all your debts and liabilities.
While offering life cover, many term insurance plans also cover critical illnesses. In cases of heart attacks or cancer, the term insurance policy will offer a lump sum amount on its first detection. This service can be availed through a small addition to the existing premium.
Term insurance plans have an edge over other life insurance plans because of their premium. Online term insurance plans offer a higher sum assured in return of low premiums. A regular TROP plan gives you a return of 105% when the policy matures.
The term life insurance policy offers tax benefits like any other insurance policy. However, the new term life insurance in comparison with the old one, offers some additional tax benefits on the premium. The new policies are different because they also cover critical illnesses.
Some insurance companies offer to pay future premiums in cases of partial or total disability. This allows the term life insurance policy to continue even if the policyholder is unable to pay the premiums. All information on this is available when you make an online term life insurance comparison.
Once you’ve decided to buy term insurance online, you can now look at some add-on options. These add-on benefits offer you a larger coverage and greater protection. Some of these are, accident benefit, premium waiver, life stage benefit, critical care benefit. You can avail these benefits on an addition to your premium amount.
Key Features of Term Life Insurance Plans
A term life insurance is specifically conceptualised to offer financial assistance to you and your family. In this type of insurance policy, the sum assured is offered to the family or dependents of the policy holder. It is offered if the policyholder expires or goes through a critical illness during the term of the policy.Here are the key features of term insurance plans in India:
- Claim Settlement Ratio
- Death Benefits
- Policy Term
- Entry Age
- Maturity Age
- Tax Benefits
- Maturity Benefits
- Plan Choice
- Survival Benefits
While comparing a term insurance policy online, you must always look at the claim settlement ratio. This ensures that your family’s claims on your loss of life will not be wrongfully denied. A higher claim-settlement ratio offers security to your family.
A term insurance plan is designed to offer financial assistance to your family in the event of your death. This policy ensures that they don’t have to worry about monetary problems and can live a stable life even after your passing.
A policy term is the period you want your policy to cover you. It varies from 5-60 years. You pay a yearly premium to get this policy to continue over this period. If you lose your life or go through a critical illness during this term, the policy will offer the sum assured to your family.
The minimum age when buying a term life insurance is 18. Any person above the age of 18 can by an online or offline term insurance policy. All you need to do is buy your policy once and keep paying your yearly premium until the maturity of your policy.
There is no particular maturity age for term life insurance. The term of the policy depends on your choosing. The entry age is restricted is 65 years. But the average range of maturity age for a term life insurance policy is 65-75 years.
Every term insurance policy offers extensive tax benefits for policy holders. You can avail profitable tax benefits under Section 80C and Section 10 (10D) of the Income Tax Act. However, these benefits are subject to any modifications in the Income Tax laws of India.
There is no particular maturity benefit offered to the policy holder. The only benefit offered in a term life insurance policy is a death benefit or a critical illness benefit. This is given to the family or dependents of the policyholder if this event occurs during the term
A term life insurance is simple to choose. But many companies offer additional benefits, rider benefits, critical illness cover and more along with the policy. The best way to choose your plan is to compare term insurance policies online. You must take into account your premium, your term, sum assured and the benefits before choosing a plan.
Survival benefits are applied on policies if the policyholder survives the term of the policy. Most term insurance policies offer a certain pre-determined sum as a survival benefit. If you have a TROP plan, the premium paid by you will be returned to you on the maturity of the policy.
How to Compare Term Life Insurance Policy at Paybima?
Comparing term life insurance policies is simple at Paybima. Follow the below steps to proceed:
- Fill the form on our ‘Life Insurance’ Page. It requires three steps asking for some very basic information.
- This form will lead you to a customized list of term insurance policies offered by top insurance companies.
- You can view their details by clicking on them and check the box that says ‘compare’
- Once you’ve selected up to 4 policies, click on the ‘compare’ button at the bottom of the page.
- This will lead you to a comprehensive table listing all the benefits and shortcomings of each policy you have shortlisted.
- Now you can take your time to choose the best one for you.
How to Choose the Best Term Life Insurance Plan?
Choosing the right term insurance plan for you and your family is vital for their future. There are several factors you need to consider while making a term plan comparison. It should include the premium amount, the term, sum assured, claim-settlement, critical illnesses, the requirement of your beneficiaries and more. We look in to all these factors in detail below:
- Claim Settlement Ratio
- Feature to Add Terminal/Critical Illness Benefit
- Company Reliability
- Premium Waiver Rider upon Diagnosis of Terminal Illness
- Solvency Ratio
- Enhanced Cover
- Go for a Regular Income Payout Option
The claim settlement ratio of the insurance company will offer you an enhanced sense of security. A consistent and good ratio determines that they will not wrongly reject your family’s claims. This claim-settlement ratio is issued by the Insurance Regulatory and Development Authority (IRDA).
Some term insurance policies offer to add terminal or critical illnesses in their cover. You need to pay an additional premium to avail this benefit. If you are struck by such an illness, the insurance company will pay for your medical expenses if you have chosen this add-on feature.
Always choose a reliable insurance company when buying a term insurance plan. You and your family will be associated with this company for years. Read the reviews for the company and check their credentials from authentic sources before you decide to invest.
Some insurance companies offer the feature of Premium Waiver upon the Diagnosis of Terminal Illness. This means that if you are diagnosed with a terminal illness and cannot pay your future premiums, the company will do it for you. Your term insurance policy will continue till maturity.
The solvency ratio is the number that tells if the insurance company will be able to offer the sum assured if a claim is made by a policyholder. The Insurance Regulatory and Development Authority requires a minimum of 1.5 solvency ratio to be maintained by an insurance company.
Some insurance companies offer the option of add-on features and enhanced coverage. Enhanced coverage in term insurance policy means that the policy holders can avail additional coverage in times of critical emergencies and illnesses. This needs to be checked with the insurance company to know the additional coverage features they are offering.
It is best to view all the features offered to a rider when choosing or comparing term insurance plans. An insurance rider is a feature that adds extra benefits or amendments to the existing insurance plans and may incur additional charges on the premium.
The term insurance policy offers a lump sum amount to the beneficiary if the policyholder expires within the term. But many insurance companies also offer a regular income payout option. This option lets the company to pay the amount to the beneficiary in regular intervals. You can choose a policy that allows you this option.
Documents Required for Term Life Insurance Claim Reimbursement
Documents required - Natural Death
- Term insurance policy documents
- Claim form, duly filled and signed.
- Copy of the death certificate of the policyholder
- Statement of the beneficiary
- Any other documents asked by the insurance company
Documents required – Accidental Death
- Police investigation or FIR report
- Medical reports – hospital reports inclusive of the admission and discharge cards, test reports, etc
- Statement of the doctor, releasing the body of the policyholder
- Report of the post-mortem
- Statement of the beneficiary
- Any other documents asked by the insurance company
- Visit PayBima website and click on Term Insurance under Life insurance option
- Fill in the form with your details, select the sum assured amount and then calculate the amount of premium to be payable on the insurance policy.
- A list of quotes would be available to you from various insurers based on the details submitted
- You can browse through the various plans on offer, compare their benefits and riders, and select the one that you think is best for you
- You can then proceed to the proposal forms, fill up all the details as accurate as possible and keep all the supporting documents ready for upload
- After completing the proposal form, you can proceed to the payment page. The premium can be paid through various online modes available like credit or debit card, internet banking, UPI or wallets if available. You can also choose the frequency of premium payment i.e. annual, half yearly, quarterly or monthly.
- Post successful payment, the details are submitted to the insurance company for approval.
- The insurance company scrutinises the proposal form that you have submitted and if the company is willing to take your risks, the policy would be issued. Once the policy is issued, you would be notified. The soft copy of the policy will be sent to your registered email address and the hard copy will be mailed to your residential address which you mentioned on the application form.
- Address Proof- Driving License/Bank statement or passbook with latest entries/Passport/Voter ID/ Aadhaar Card/Ration Card
- Id Proof-Aadhaar Card/Voter ID/ Passport/ PAN Card
- Standard Age Proof-PAN Card/ Aadhaar card / Passport/Voter Id card/Marriage certificate/Ration card/Birth certificate/Driving License
- Passport-size photographs of the individual
- In some cases when the premiums are too high then Income documents of the individual are also required to calculate the amount of insurance cover that is to be provided. In such cases, the income proof would have to be submitted which can be - Salary slips of last 3 month/ Income Tax Returns/ Employer Certificate/ Latest bank statement/ Latest Form 16
- Death of the Policyholder- all types of death are covered in term insurance policy which may be due to natural causes, accidental death or death due to illness.
- Maturity of the Insurance policy is covered in all plans (except pure term plans) wherein the policyholder will receive premiums payment throughout the tenure in case of survival.
- If accidental rider is taken, accidental death would be covered and result in the payment of an enhanced death benefit
- If critical illness rider is taken, specified critical illnesses would be covered under the plan
- If the disability rider is taken, permanent total and partial disabilities would be covered under the policy
- If the insured commits suicide within 12 months of buying a policy or 12 months of renewing a lapsed policy, such a death would be excluded.
- In case a critical illness rider is chosen, there is a survival period depending on the insurer’s policy terms. If the insured dies during this survival period, after the diagnosis of the critical illness, no rider benefit would be paid in such a case.
- If you hide an important fact from the insurance company at the time of buying the policy and death occurs due to such hidden fact, the company can reject your claims. In that case, the policy would become null and void and no claim would be paid. Important fact is considered to a fact which impacts your risk. For instance, if you are a chain smoker and you do not mention your smoking habit at the time of buying the policy, you are said to be hiding an important fact. Later on, in case of death due to lung cancer, the company would find out that you hide your smoking habit. In such cases, the policy would be void and no claim would be paid.
- High sum assured – As term insurance is the most affordable life insurance plan, you can opt for a high sum assured at pay low premiums for it. For e.g. premium for a one crore term insurance cover can start from Rs 500 per month. Such large covers can compensate for expenses like outstanding home loans in case of death and protect your family from a huge financial burden. And your premium will remain fixed throughout the tenure of your policy.
- Covers against critical illness – Along with providing life cover, some insurers give you the option to opt for protection against various critical illnesses. For a small addition in premium, the policy will offer you lumpsum payment benefit against illness like heart attack, kidney failure, cancer etc on detection or as per the policy terms.
- Disability benefit – Under this benefit, in case the insured suffers a total or permanent disability, the insurance company will pay all your future premiums. As a result, your life insurance cover remains active even if you are not able to make further premium payments.
- Accidental death benefit – With this benefit, the insurance company gives additional pay-out in case of an accidental death of the policyholder. This additional amount can be upto Rs. 2 crores. For example the if the sum assured opted for the term insurance is Rs 1 crore with accidental cover benefit of Rs. 1 crore, the insurer will pay a total of Rs 3 crores to your family in case of accidental death.
- Terminal illness benefit – Life threatening illness can have a serious impact on your financial condition. Hence few life insurance companies provide terminal illness benefit to policy holders. Under this, the insurer will give 100% pay-out of your life cove amount before death to help in your fight against the illness.
- Tax benefit – You can claim income tax benefits on the amount paid in form of premium for life insurance cover under section 80C under Income Tax Act. You can also claim tax benefit under section 80D for the premium paid for critical illness rider if opted with your term insurance plan. Also, in case of death, the lumpsum pay-out by the insurer to your family becomes tax free under Section 10(10D).
- Age:Your age is the number one factor for calculating the premium for term insurance cover. Younger policy holders pay lesser premiums. As you age, the premium increases since the likelihood of pay-out by the insurance company also increases. However, once you have bought a term insurance plan, your premium remains fixed throughout the policy period.
- Tenure: Another important factor that decides your premium amount. The longer the duration, the higher is the premium outflow. For e.g. a person opting for a 30 year policy has a higher probability to die in the policy period compared to a person opting for a 10 year policy. Hence he has to pay higher premium.
- Gender: Your gender also plays a role in determining your premium. Life expectancy of women is more than men and pose a lesser risk of claim. Hence they may pay lesser premium than men for the same life insurance cover.
- Lifestyle: Your lifestyle can also reflect in understanding your risk profile. People with smoking and drinking habits have to pay higher insurance premiums as they are more likely to suffer from life threatening disease
- Premium payment frequency: How you choose to make payment also plays a role in your total premium outflow. The insurance company charges higher premium if you have selected to pay the premium on quarterly, semi-annually or monthly basis.
- The death certificate of the insured
- Original documents of term insurance policy
- ID proof of the nominee, beneficiary or the claimant
- Age proof of the life insured if it was not provided at the time of buying the policy
- Police FIR if death occurred due to an accident
- Medical reports and hospital records for accidental death claim cases
- Any other relevant required document as required by the insurance company
- Hiding or giving inaccurate information about your health history, smoking habit or any pre-existing ailment while filling up application form is considered as misrepresentation and can become a basis for claim rejection
- If you are not paying premiums, your term insurance policy will lapse and your claim intimation will be rejected
- If the reason of death in not covered under the term insurance policy, your claim will be rejected. For e.g. suicides are covered only after one year of policy period. Similarly death due to drug overdose or participating in hazardous activities like war are mostly excluded and not covered in the policy.
- If nominee details are not provided or you failed to update correct information about nominee, your claim might get delayed or rejected as per the company policy
- If death occurs soon after the policy is bought, the claim might get rejected. Every insurance company has a contestability period which can range from 1 to 2 year. In case of death during this period, the insurance company can launch an investigation into the reason of death and can reject the claim if any information is found inaccurate or suspicious. However if the case is found to be genuine, the claim will be settled.