A Detailed Explanation of Term Life Insurance

Whenever we think of buying any insurance, the thought of term life insurance definitely comes in our mind. In this article we will know in detail what is term life insurance and what is the benefit of term life insurance? Apart from this, we will discuss many such questions related to it, about which it is very important for you to know.

In this article, we have explained such questions related to term insurance, whose answer you will hardly find in such detail anywhere. Therefore, if you are also serious about the future of you and your family, then you should read this article completely because complete information about term insurance can prove to be very beneficial for you. Let’s start now –

What is Term Life Insurance?

Term life insurance is a type of life insurance, apart from this, many other types of life insurance policies are sold in India. Term life insurance offers financial coverage to your family for a specific period of time. If the policy holder dies during the term, then all the money of his policy is credited to the bank account of his nominee. But if there is no mishappening during the term with the policy holder and he remains safe even after the term, then along with his policy, the coverage and benefits of his policy also ends.

Term life insurance is typically less expensive than permanent life insurance, such as whole life insurance, and is often used to provide financial protection for a specific period of time.

Term insurance is the cheapest form of life insurance, in which you can get a high cover by paying a low premium. In this, you only get the death benefit. Joint cover also comes inside term life insurance, in which both husband and wife can be covered. You can take term life insurance either online or offline.

What is the Difference Between Term Insurance and Life Insurance?

Look, term life insurance is a type of life insurance. But there are some important differences between these two, which we will go through one by one –

1. Under life insurance, you get the benefits of both Premature Death and Survival, that is, even if the policy holder does not die within a particular period, as soon as that policy matures, even then the policy holder gets the benefits whereas in term insurance it is not so because in term insurance your family is given benefits only after your death.
2. In life insurance, whenever your policy matures, you get a fixed amount whereas in term insurance, there is no such saving element. It only covers your risk.
3. Life insurance premiums are higher than term life insurance premiums.
4. You get tax benefits in both life insurance and term insurance. Both the insurances are covered under section 80c in which you get tax exemption of up to Rs 1.5 lakh.
5. In both insurance, Maturity Benefit comes under Section 10 (10D) so that no tax will be levied on the money your Nominee will get.

Why Term Insurance is Important?

If there is only one earning member in a house and for some reason if he dies, then after that his family members have to face a lot of financial problems in and term life insurance helps in supporting his family financially after his death. That’s why it is necessary to have term life insurance for all the earning members in your household.

Most of the youngsters think that what will happen to whom after their death, what will it matter to them, but as you become mature, you will understand that these things matter a lot.

And people consider term insurance as insurance but I want to tell that it is not insurance but it is an investment which is very beneficial for your family in future.

Therefore, if you have a family, you have liabilities and you have taken a loan from somewhere, then you must take term insurance because all these money can be repaid through its cover.

On What Factors Does The Term Life Insurance Premium Depend?

The premium for term life insurance depends on your age, smoking habits and pre-existing diseases. For example, if your age is less then you will have to pay less premium and if you are a smoker then you will have to pay more premium and if you are not a smoker then also you will have to pay less premium. With this, if you have a serious illness, then in that situation also you have to pay more premium.

For the payment of term life insurance, you can select any payment mode, single or regular. Either you can make one time payment for any plan or you can choose regular mode in which you can make Yearly, Half-Yearly, Quarterly or Monthly payments.

What is the Benefit of Term Life Insurance?

In insurance, the risk cover starts from the very first day i.e. from the day you have taken the insurance, you start getting the risk coverage from the very next day.

If you have term life insurance, then under section 80c you get a tax exemption of up to 1.5 lakhs.

When you get a claim for term life insurance, it is exempted under section 10 (10D) and is not taxed. That is, if you get a claim of one crore, then there is no tax of any kind on it.

Add-on Benefits of Term Insurance

Some add-on benefits are also provided to you under term insurance, which you can also add to your policy, about which we are going to tell you now –

Accidental Rider – Inside term insurance, you get an Add on Feature of Accidental Rider, in which if the policy holder dies due to any kind of accident during TERM, then he is given a coverage of Rs 2 crores on a policy of Rs 1 crore.

Critical Illness Rider – If the policy holder has to face any critical illness during TERM, then whatever benefit is fixed in the Critical Illness Rider in his policy will be given to you. For example, if you get Critical Illness Rider above 50 lakh rupees on your term policy, then as soon as you discover this Critical Illness Rider, then you will get this 50 lakh rupees in your bank account in addition to the coverage of your term life insurance.

Disability Rider – Inside term insurance, you also get to see the writer of Disability Rider, in which if the policy holder becomes disabled due to an accident due to the term, then according to his policy, he will get whatever benefit of Disability Rider he will get. . Apart from this, now he is unable to earn so he will not have to pay the premium for his term life insurance.

All these add-ons are very important for you, for which you have to pay a little more than your premium but you get many benefits. That’s why you must add it to your policy and take advantage of it.

Things to know before you buy Term Life Insurance:

Before buying term insurance, you have to take care of some things, about which we will tell you below.

1. Always keep in mind that whenever you take any insurance, always take insurance from Renowned Company only. That is, you can always buy term insurance from a reputed company like TATA, LIC and MAX etc. Because whenever you buy insurance from a trusted company, then it is easy for you to get a claim from there and if you buy insurance from a small company, then you may face problems at the time of claim.
2. The sooner you buy term insurance, the more you benefit and it is also known as Early Age Benefit.

For example, if you take a term insurance of one crore at the age of 18 years, then your 1 year premium will be ₹ 5000 and if you buy the same insurance at the age of 28 years, then your 1 year premium will be ₹ 7000 and if you take the same one crore policy at the age of 48 years, then your 1 year premium will go up to ₹ 20000 i.e. as your age increases, your premium will also increase but your benefits will remain the same. Though these figures are not fixed, they keep on going up and down. It is meant to say that buy term insurance as soon as possible.

3. One of the most important things to keep in mind is that not everyone can get term insurance. There is a rule here that No Income – No Term Insurance. Wherever you go to buy your insurance, you have to show your income proof there.

Anyway, any company provides you term insurance because you are an earning member and your family needs financial support if any mishappening happens to you tomorrow.

That’s why the company provides you term insurance up to 20 times of your annual earnings. This is a general rule which you can also calculate yourself.

For this you have to file ITR (Income Tax Return). If you are earning money, then fill your ITR according to whatever bracket you come in. Because during term insurance it can be demanded from you. And in today’s internet era, you don’t need to do a lot of manual processing to fill your ITR. For this, you can take the help of a trusted website Cleartax where you can easily fill your ITR.

Learn More About Term Life Insurance:

Now we will discuss some more important questions related to term insurance, which you must know if you buy term life insurance for yourself –

Where to Get the Best Term Life Insurance and Why?

Policy Bazaar is the most popular platform to choose the best term insurance plan for yourself, from where you can choose the best term insurance plan for yourself. If you buy term life insurance for yourself from somewhere offline, then you will get the cheaper insurance online on Policy Bazaar.

The second big advantage of getting insurance from Policy Bazaar is that here you get many big companies together, which makes it very easy to compare all of them and choose the best plan for yourself.

The third advantage of getting insurance from Policy Bazaar is that you do not have to go to the company to make an insurance claim, rather you can claim your insurance directly from Policy Bazaar. Policy Bazaar has its own Dedicated Claim Assistance Program which is completely free in which you are given Free Document Pickup, Free Counselling and a Claim Assistance card.

Along with this, you are also provided with a claim help line here, but you will get all these benefits only when you buy term insurance from Policy Bazaar.

Now we will see how you can choose the best term insurance plan for yourself from Policy Bazaar –

How to Buy Best Term Insurance From Policybazaar?

To choose the best term life insurance for yourself from Policy Bazaar, you have to follow the steps given below –

• To buy term insurance from Policy Bazaar, you need to visit this page termlife.policybazaar
• Here you will enter your Gender, Full Name, Date of Birth and Phone Number and click on View Free Quotes.
• After that, you will be asked some basic questions which will be related to you. You will answer them correctly and will do next.
• Now a lot of plans will come in front of you, where you can see the plans and features of all the insurance companies. Here you are also given Extra Options above, with the help of which you can also filter these plans.

• Above here you can select your Coverage Amount in the section of Life Cover that how much money you want to cover. Along with this, on the basis of the companies here, you can also see their Cover Age that which company will provide you Term Insurance for how many years.
• After selecting the plan you will click on it and you will come on a new page. Here you will fill in your details. Here you will also have to fill information related to your plan like – Total Coverage, Covers for…years, Mode of Payment, etc. which you can fill according to your own.
• If you want more details related to your plan, then you can download the PDF by clicking on Download Brochure above. You will get all the information related to your plan in this PDF. After this you will hit Proceed
• Now you will proceed by entering your city and pin code. After this, a list of what you will get in your plan will be shown in front of you. You click on Review Details.
• Now the complete details will come in front of you which you have filled-up yourself, which you will check carefully because after this you cannot make any changes in it.
• After this you will click on Checkout then Payment Gateway will come in front of you and here you can pay with Debit card, Credit card or Net Banking.

So friends you can buy a best term life insurance plan for yourself from Policybazaar by following all these steps.

Can We Change Nominee in Term Insurance?

Yes, you can change your nominee in your term life insurance policy whenever you want. Whenever you feel that you need to change the nominee in your term insurance, you can change it without any hesitation. Changing nominee in your term insurance is not a complicated task. This is a simple process which you can do online or by filling up the Nominee Change Form by visiting your insurer’s branch.

You need some simple details about your policy and your nominee to fill this form. After this, you must get a written acknowledgment from your insurer that he completely agrees with your decision.

Along with this, you must inform your family about changing your nominee in your term insurance so that they do not face any kind of trouble at the time of claim.

Which Medical Test Required for Term Insurance?

Which medical tests are required for term insurance, it depends on the health, age, coverage amount of the applicant and also on your insurer. Along with this, it also depends on your insurance premium as to which medical tests you need. Some of the common medical tests are as follows –

1. Blood test
2. Urine test
3. ECG or EKG
4. Chest X-ray
5. Blood pressure measurement

Documents Required for Term Insurance

You need documents like income proof, identity proof, medical report (if policyholders are 45 and above), and proof of residence to buy term insurance. Below you have been given the complete details of these documents, which are demanded by the insurance company during term insurance-

Official Identity Proofs:

1. Passport
2. Voter’s ID
3. Aadhaar Card 
4. Job card issued by NREGA 
5. PAN Card 
6. Form 60 
7. National Population Register

Valid Address Proof:

1. Proof Utility bills including electricity, postpaid phone, piped gas, and water bills, no older than 2 months 
2. Pension Payment Orders (PPO) of the retired individuals
3. Municipal Tax Receipt or Property Tax Receipt
4. Allotment of Accommodation letter from the employer authorised by the State or Central Government, PSUs, financial institutions, commercial banks, etc.

Income Proof:

(Salaried Individuals)

1. Last 3 months’ bank statement with details of salary credited
2. Last 2 years’ Income Tax Returns
3. Recent Form 16

(Self-Employed Individuals)

1. Last 2 years’ Income Tax Returns
2. Computation of income generated 
3. If computation is not available, last 3 years’ Income Tax Returns
4. Last 2 years’ audited balance sheet and profit loss account by a certified CA

Medical Proof:

1. Past and recent medical records 
2. Results of medical tests allocated by the insurer

Please Note – The data of these documents has been taken from policybazaar, which can change depending on the insurer company.

FAQs:

Final Words:

It is expected that from this article you would have been able to know in depth about what is the Benefit of Term Life Insurance. Whether you take it offline from an insurance agent or online from any platform, but you must take a term insurance policy for yourself because it is like an investment for you, due to which your family gets financial coverage in future.

Rather, you must get this insurance done for every earning member in your home. If you have any question or suggestion related to this topic, then do tell in the comment, we will try to reply you.