Term Insurance

What is Term Insurance?

How Does Term Insurance Work?

Features of Term Insurance

Types of Term Insurance Plans

What is a Term Life Insurance Rider?

Who Should Buy a Term Insurance Policy?

When is the Right Time to Buy Term Insurance?

Why Do I Need Term Insurance?

How Much Term Insurance Do I Need?

Age Approx HLV
18-35 25 X Annual Income
36-45 20 X Annual Income
46-50 15 X Annual Income
51-60 10 X Annual Income

For example, for a 30-year-old earning 10 lac annually, the ideal life cover would be 25 x 10,00,000= 2,50,00,000.

How to Choose the Term Insurance Policy Period?

What Are the Factors That Can Affect a Term Insurance Premium?

How to Choose the Right Term Insurance Plan?

Terminologies Related to Term Insurance

FAQs About Term Insurance

Is there an age limit to buying a Term Insurance Plan? up-arrow

The age limit varies across insurance providers and plans. Most of the time, the entry age is 18+ years, and the maximum age is 65 years to buy a Term Insurance Plan.

What are the types of deaths covered in Term Insurance? up-arrow

The following types of deaths are considered valid by an insurance provider at the time of claim settlement:

a) Natural Death

b) Death due to any critical illness

c) Accidental Death

d) Death due to natural calamities like earthquakes, floods, etc.

e) Suicide is covered if it happens after 12 months of buying the policy. However, if it occurs within 12 months, a certain proportion of the sum assured is paid to the nominee.

Read more:

What types of deaths are not covered by insurance? up-arrow

a. Any Death that involves self-harm or self-infliction of injury like suicide is not covered under insurance.

b. Death due to driving under the influence of alcohol or drugs is not covered. 

c. Death due to participating in hazardous activities

d. Death due to the involvement in illegal activities when either the life insured was involved in any criminal activity or the nominee is criminal, and it is discovered that the life insured was killed with the nominee's involvement. 

Can I buy more than 1 Term Insurance policy? up-arrow

Yes. You can buy more than 1 Term Insurance Policy. It is beneficial to buy more than one Term Insurance Policy, owing to multiple factors, the foremost being reducing the risk of claim rejection.

Can I change the nominee in my Term Plan, and how many times can I do so? up-arrow

Yes. You can change the nominee during the term of your policy. And you can do this as many times as you want. But the change should be communicated to your insurance provider clearly in writing to ensure that the change is correctly incorporated and the nominee receives the payout hassle-free.

Should we take Riders along with Term Insurance? up-arrow

Yes, Riders enhance the effectiveness of a Term Insurance Plan with minimal additional premium. They are optional add ons but adding them to your base plan can be very useful, especially for specific circumstances otherwise not covered in your base plan, like critical illness, accidental Death, disability etc. 

Do we get any return in Term Insurance? up-arrow

Term Insurance mostly has no savings component and is designed to provide only the Death Benefit. However, some specific Term Insurance plans come with the Return of a Premium Option. In these plans, at the end of the policy tenure, if the policyholder survives, the complete premium is paid back to the policyholder, and in case of the policyholder's demise, the Death Benefit is paid to the nominee. 

Can I get Term Insurance if I'm not in a job? up-arrow

You cannot purchase Term Insurance if you are not earning. An Income Proof needs to be submitted for Term Insurance. Income can be from a job, profession or business.

Can husband and wife both take Term Insurance? up-arrow

Yes, husband and wife both can take a joint Term Insurance. In this case, the Sum Assured is paid out on the first claim basis. In case of the demise of both joint holders, the sum assured is payable to the nominee.  

What is the difference between Term Insurance and Accidental Insurance? up-arrow

Accidental Insurance provides Death Benefit only if the policyholder dies due to an accident, while Term Insurance provides Death Benefit in case of any death. 

Why should I buy Term Insurance when I already have Life Insurance from my employer? up-arrow

It's great if you have life coverage from your employer. However, in most cases, these covers are not enough. Analyse your financial cover requirements and decide if you need another insurance cover. In such cases, Term Plans, due to their affordability, can be a good choice as an addition. Also, the insurance plans provided by the employer cease to exist once you leave your company. 

What would happen if a person has two Term Insurance policies? up-arrow

If the policyholder has two separate Term Insurance policies, the second insurer must be made aware of the first policy, and the first insurer must provide acknowledgement. 

Can Non-Resident Indians (NRIs) buy Term Plans in India? up-arrow

Yes, if the NRI is legally an Indian citizen, they can buy a Term Plan in India.

Does the premium remain the same throughout the tenure of a policy?  up-arrow

Generally, the premium of a Term Insurance remains the same throughout the tenure of the policy; however, if the policyholder develops some ailments or lifestyle habits like smoking, drinking etc., the premium would increase when the same is declared to the insurer. And it is essential to make this declaration to avoid any claim decline in the future. 

What if I do not want my Term Cover once I have taken it? up-arrow

Term Plans generally come with a Free-Look period of 15 days, 30 days in case the policy is purchased online during which you can check the complete details, accept certain terms or cancel the policy altogether. 

On maturity, can a fresh policy be availed at the rate of the old premium? up-arrow

No. Once the policy matures, it is considered closed and cannot be renewed. In such a case, if the policyholder wishes, they have to take a new policy as per the new terms and conditions. 

What is the Contestability Period in Insurance? up-arrow

The Contestability Period in Life Insurance is the time frame during which an insurer can contest or question the claim raised by the beneficiaries. This is usually 2 years from the date of policy purchase. 

If I stop smoking today, or maybe 6 months before taking a Term Insurance Policy, will I get a Non-Smoker rate? up-arrow

The premium difference is considerable between a smoker and a non-smoker, and Smokers usually pay at least two to four times more than non-smokers. Insurance companies provide a Non-Smoker premium rate if you abstain from tobacco for at least 3-5 years; some even give it in 1-year abstinence from tobacco. However, since the underwriting rules differ across companies, it is best to check with your insurance provider.

What is the best kind of Life Insurance Policy? up-arrow

The best kind of Life Insurance is the one that suits your requirements. If you want high coverage at a low cost, go for Term Insurance. However, Whole Life Insurance should be the choice if you want coverage for the rest of your life.