TERM INSURANCE
Term Insurance is a kind of insurance in which the person who is willing to take the insurance defines the term and the sum assured to cover the unfortunate death during the defined span of time. In this insurance, if the insured dies during the term of insurance than the total sum assured is provided to the nominee.
WHAT ARE THE POINTS TO BE CONSIDERED WHILE TAKING TERM INSURANCE PLAN?
- Financial Security
- Riders
- Accidental death rider-It means if the insured person has taken a rider for accidental death and the person’s death is caused due to accident then the sum assured paid by the company would be double
- Accidental Disability rider- It means if the insured person has taken a rider for Accidental Disability and the person meets with an accident leading to partial disability then he will be given percentage of the sum assured paid according to the disability
- Income Benefit rider- It means if the insured person has taken a rider for Income Benefit and the person dies then the nominee will get monthly income for few years along with the sum insured
- Waiver of Premium rider- In case of permanent disability the future premium will be waived and policy will be continued
- Sum Insured
- Person can opt for sum assured as high as 30 times of his yearly income as per ITR
- If the sum assured chosen is high as per company then the Insurance Company might request for supporting documents (income proof) from the insured
- Minimum sum assured varies from company to company Example: 20 Lac or 25 Lac
- Loading on Premium
- For a smoker then your premium will be higher as compared to a non-smoker. It may be 40% or higher
- Existing medical conditions like hypertension etc. will also attract loading subject to underwriting guidelines
- Occupational risk and dangerous hobbies will also attract loading on the premium
- Entry age
- Entry age to take term insurance varies from company to company
- For few companies, it is 18-60 years
- And, in some companies, it is 18-65 years
- Maximum age limit
- Policy can be renewed till 70years in some companies
- And, in some companies, it can be renewed till 75years
- Grace Period
- If policy holder has not paid the renewal premium before the due date then the policy will not lapse as you have 30 days grace period option. If the insured person dies during the 30 days grace period and has not paid the premium then also company will pay the benefits to the nominee after deducting the unpaid premium
- Note- If the grace period has been crossed then the policy will lapse and no benefits will be provided by the Insurance Company
- Policy Revival
- Premium
- Premium mode available under this plan can be monthly, quarterly, half-yearly and yearly. The single premium option is also available.
- Premium of Term Insurance remains constant throughout the term chosen by the Insured
- Since the Premium for Term Insurance plan is cheaper in the early age. Thus, it is advised that the term plan should be taken as soon as the person starts earning.
- It is especially advised for the sole bread earner of the family
- Few Term plan providing companies have option for online payment as well
- Nominee Details
- Nominee is the person chosen by the insured who should be provided with the sum assured in the event of unfortunate death of the Insured
- If the nominee is a minor then he can choose an appointee along with it. As if the insured dies before nominee attains the 18 years of age then appointee can take care before the nominee becomes major
WHAT ARE THE CONDITIONS UNDER WHICH BENEFITS OF LIFE INSURANCE ARE NOT PROVIDED?
- Suicide
- Drugs Overdose
- Self-inflicted injuries
- Criminal Activity
- Hazardous Hobbies
