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E-Term Plan & Policy Online in India
In today's digital age, protecting your family's financial future has become easier than ever with e-term insurance plans. These online term insurance policies offer the same benefits as traditional term insurance but with added convenience and often at better prices.
Let's dive deep into understanding what e-term insurance is and why it might be the right choice.
Table of Contents
What is an E-Term Plan?
An e-Term Plan is similar to a standard term plan but is a "non-participating policy," which means it provides only coverage and no earnings or returns. When you acquire an e-Term Plan, your family will receive a death benefit in the case of your untimely death.
These plans can only be purchased online, distinguishing them from typical term plans obtained through offline middlemen such as insurance brokers or agents. This characteristic makes e-Term Plans a great choice for residents in a digital India.
How Does an E-Term Plan Work?
An e-term plan is a type of term life insurance you can purchase and manage online. Here’s a breakdown of how it works:
Customisation
You can choose the sum assured, the policy term, and the premium payment term. This allows you to tailor the plan to your financial needs and goals.
Plan Options
Many e-Term Plans offer different options to enhance coverage, such as Basic sum assured on death, Sum assured plus an additional benefit for accidental death, The sum is assured, plus there is a waiver of future premiums in case of total and permanent disability
Premium Payment
You can choose from various premium payment modes (single, yearly, half-yearly, quarterly, or monthly) and terms (regular, limited, or single pay). This flexibility helps you manage your finances better.
Additional Riders
You can add riders to your policy for extra protection, such as critical illness cover, which provides a lump sum if diagnosed with a critical illness, or an accidental death benefit rider.
Claim Process
In the unfortunate event of the policyholder’s death, the beneficiaries must file a claim with the insurance company. The insurer will then verify the claim and disburse the death benefit as per the policy terms.
Understanding E-Term Insurance Plan with Illustration
Chetan is a 35-year-old software engineer and his family's primary breadwinner. He learns about e-Term Plans online and decides to explore them further by visiting the website of a reputable insurance company. He uses their online calculator to determine the sum assured and policy term that would best meet his family’s needs.
Chetan’s Term Insurance Details:
Scenarios of E-Term Insurance Plan
Death During the Policy Term
Outliving the Policy Term
Features & Benefits of an E-Term Plan
Term Insurance offers a mix of affordability, flexibility, and convenience, making it an attractive option for many. Let’s explore these plans' essential features and benefits in more detail.
High Coverage
E-term plans offer high coverage for low premiums, providing your family a substantial financial safety net. This ensures they are protected from financial difficulties, such as debts and daily expenses, in the event of your untimely demise.
Flexible Options
E-term plans offer flexibility with options like the Life Option (basic coverage), the Life Plus Option (accidental death benefit), and the Life Secure Option (waives premiums if disabled). This allows you to tailor the policy to your specific needs and lifestyle.
Payout Choices
You can choose how your family receives the payout: lump sum, level recurring payments, or increasing payments. This flexibility ensures that financial support remains relevant and aligns with your family’s needs and financial habits.
Special Rates
Providers offer special rates for non-smokers and women, making e-term plans more affordable. These discounts encourage healthier lifestyles and make the plans accessible to a wider audience.
Exit Option
Some e-term plans allow you to exit at a certain age (like 60) and get back a portion of your premiums. This feature is attractive for those reconsidering their insurance needs as they approach retirement.
Financial Security
E-term plans ensure financial security for your loved ones by providing funds to cover debts, mortgage payments, and living expenses. This safety net safeguards your family’s future and maintains their quality of life.
Peace of Mind
An e-term plan offers peace of mind by protecting your family financially. This reduces stress and anxiety, allowing you to focus on enjoying life while preparing for the future.
Tax Benefits
Premiums paid for e-term plans are usually tax-deductible, reducing your taxable income. This dual benefit makes e-term plans attractive as they provide financial protection and potential tax savings.
Convenience
E-term plans can be easily acquired and managed online, saving time and effort. You can compare plans, calculate premiums, and manage your policy from home, making the process quick and hassle-free.
Why Should You Consider E-Term Insurance?
Why Should You Consider E-Term Insurance?
Considering e-Term Insurance can be a wise decision for several reasons:
Affordable Premiums
E-term insurance often comes with lower premiums. Insurance companies have reduced costs by eliminating agent commissions and other administrative expenses. As a result, you could save between 20% and 40% compared to standard term insurance plans.
Easy and Convenient Process
You can purchase your insurance policy whenever you want, day or night. The process is straightforward and user-friendly, eliminating the need for complicated paperwork. The policies are typically issued quickly, so you won’t have to wait long.
Hassle-Free Payments and Immediate Documentation
Making premium payments is hassle-free, with various methods available to suit your preferences. Once you finalise your policy, you will receive your documents immediately online, ensuring you have everything you need.
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Types of E-Term Plans
Several e-term insurance plans are designed to meet different needs and preferences. Here are the main types:
Level Term Insurance Plans
The amount paid out with a level term insurance plan remains the same throughout the policy period. If the policyholder passes away, their nominee receives this fixed amount. This type of insurance is ideal for those looking for a clear and reliable way to provide financial security for their loved ones.
Decreasing Term Insurance Plans
In a decreasing term insurance plan, the payout amount decreases over time, usually aligning with a specific debt, such as a loan or mortgage. This approach helps ensure you’re not over-insured, as the coverage reduces alongside your decreasing debts.
Increasing Term Insurance Plans
An increasing term insurance plan allows the payout amount to rise over time to keep pace with inflation. This plan benefits people expecting their financial responsibilities to grow, as it helps maintain adequate coverage against increasing living costs.
Return of Premium (ROP) Term Insurance Plans
With term insurance with return of premium plans, all premiums paid are refunded if the policyholder survives the policy term. While this type of plan tends to be more expensive, it combines life insurance with a savings feature, offering peace of mind and a way to recoup investment.
Convertible Term Insurance Plans
A convertible term insurance plan lets you switch to a permanent life insurance policy without needing a medical exam. This flexibility is perfect for those whose health may change, who foresee needing permanent coverage, or who prefer the lower costs of term insurance but want to upgrade later.
Group Term Insurance Plans
Employers buy group term insurance plans for their employees. The costs are usually shared between the employer and employee, and the payout is often a multiple of the employee's salary. This collective insurance approach offers employees valuable life coverage as part of their benefits package while helping employers attract and retain good talent.
Who Should Consider Buying E-Term Insurance?
Primary Breadwinners
If you're the main income earner in your family, E-Term Insurance can provide essential financial support if something happens to you. This helps ensure your loved ones can maintain their lifestyle and meet their financial obligations even in your absence.Young Professionals
Starting a career often means you can secure lower insurance premiums. Purchasing E-Term Insurance early can lock in a more affordable rate, saving you money. It's a smart move that provides peace of mind as you build your future.Business Owners
For business owners, E-Term Insurance can be crucial for maintaining operations if the unexpected occurs. It helps protect your business and your family’s financial future, ensuring a safety net is in place for any financial emergencies.Parents
Parents often consider their children’s future, especially regarding education and basic needs. E-Term Insurance can provide the financial protection to ensure your children can pursue their education and achieve their dreams, even if you're not around.Loan Holders
If you have outstanding loans or debts, E-Term Insurance can help cover these financial obligations. This means your family won't be burdened with paying off these debts if something happens to you. It’s a way to safeguard them from additional financial stress during a difficult time.Important Factors to Consider When Buying E-Term Insurance
Important Factors to Consider When Buying E-Term Insurance
When buying an e-term insurance plan, it’s crucial to consider several factors to ensure you make the best decision for your needs. Here are some key points to keep in mind:
- Coverage Amount: Determine the right amount of coverage based on your financial obligations, such as loans, children’s education, and daily living expenses. Experts often recommend a coverage amount 10-15 times your annual income.
- Policy Tenure: Choose a policy term that aligns with your financial goals and the duration of your liabilities. For example, if you have a 20-year mortgage, you might want a policy that covers at least that period.
- Claim Settlement Ratio: A high claim settlement ratio (over 99%) indicates that the insurer is reliable and likely to approve legitimate claims. This ratio is a key indicator of an insurer’s trustworthiness.
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Eligibility Criteria for E-Term Plan
To be eligible for an e-Term Plan, you generally need to meet the following criteria:
Documents Requirement for E-Term Plan
When applying for an e-Term Plan, you will need to provide several documents, including:
Identity Proof
- Aadhaar Card
- PAN Card
- Passport
- Voter ID
- Driving License
Address Proof
- Utility Bills
- Passport
- Aadhaar Card
- Voter ID
- Rent Agreement
Income Proof
- Salary Slips
- Bank Statements
- Income Tax Returns
- Form 16
Age Proof
- Birth Certificate
- Passport
- Aadhaar Card
- School Leaving Certificate
Medical Reports
Depending on the insurer's requirements, each section requires one or two documents as proof of term insurance.
What are the Exclusions in E-Term Insurance?
What are the Exclusions in E-Term Insurance?
When purchasing E-Term Insurance, it is crucial to understand that your policy may not cover some conditions. These exceptions, often known as exclusions, indicate when the insurance provider will not pay out a claim. Here are some of the most popular exclusions, described simply:
- Self-Inflicted Injuries: If someone purposefully damages themselves and dies as a result, their insurance policy is unlikely to pay it. This means that if the death is declared a suicide, the beneficiaries may not be entitled to the insurance benefit.
- Influence of Alcohol or Drugs: If a person dies while under the influence of illegal drugs or excessive alcohol, this may also be excluded. Claims may be refused if it is established that substance misuse played a substantial part in the death.
- Hazardous Activities: Many policies exclude deaths caused by harmful activities. Extreme sports, skydiving, and other high-risk activities fall under this category. If someone dies while indulging in such activities, their insurance may not give coverage.
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Common Myths About E-Term Insurance
Myth 1: Online Plans Are Less Reliable
E-term insurance plans acquired online are less reliable than regular plans. However, e-term insurance is equally reliable. In India, these plans are governed by the Insurance Regulatory and Development Authority of India (IRDAI), which guarantees that they satisfy certain requirements and safeguard consumers.Myth 2: Claims Are Harder to Process
There is a belief that filing a claim for an online plan is more cumbersome. The claims process for e-term insurance is standardised, making it easy to understand. Digital documentation allows the claim process to be completed more quickly than traditional paper processes.Myth 3: Coverage Options Are Limited
Some believe that e-term insurance policies provide fewer coverage possibilities. This is not the case. In reality, many e-term plans offer a wide range of coverage options, sometimes exceeding what traditional policies do. You may choose a plan that meets your requirements just as easily online.E-Term Plan vs. Traditional Term Insurance
Here is a comparison between E-Term Plans and Traditional Term Insurance in table format:
E-term insurance plans are shaping the future of life insurance by offering a convenient, cost-effective, and comprehensive solution. They offer the perfect blend of traditional term insurance benefits with digital convenience. When choosing an e-term plan, focus on adequate coverage, affordable premiums, a reliable insurer, clear terms and conditions, and an easy claim process.
Remember, the best time to buy term insurance is when you are young and healthy. The premium rates are lower, and you secure your family's financial future for the long term. With e-term insurance, protecting your loved ones is just a few clicks away.
FAQs about e-Term Insurance Plan
What is an E-Term Plan, and how does it work?
Is e-term insurance as reliable as traditional term insurance?
What are the key features of an E-Term insurance plan?
How does an E-Term Plan provide financial security?
Are medical tests mandatory for E-term insurance?
What tax benefits can I avail of with an E-Term Plan?
How do I choose the right coverage amount for my E-Term policy?
What are insurance riders, and should I include them in my E-Term Plan?
What is the process for applying for an E-Term insurance plan?
Are medical tests mandatory for E-Term plans?
How do I file a claim under my E-Term policy?
What documents are required to settle an E-Term insurance claim?
Can I convert my traditional term plan to an E-term plan?
What happens if I miss a premium payment?
Other Important Articles Related to Term Insurance
Disclaimer
- This is an informative article provided on 'as is' basis for awareness purpose only and not intended as a professional advice. The content of the article is derived from various open sources across the Internet. Digit Life Insurance is not promoting or recommending any aspect in the article or its correctness. Please verify the information and your requirement before taking any decisions.
- All the figures reflected in the article are for illustrative purposes. The premium for Coverage that one buys depends on various factors including customer requirements, eligibility, age, demography, insurance provider, product, coverage amount, term and other factors
- Tax Benefits, if applicable depend on the Tax Regime opted by the individual and the applicable tax provision. Please consult your Tax consultant before making any decision.
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