Term Insurance | FAQ's
FAQs About Term Insurance Policy;
01: Why should I choose a term insurance plan?
Term insurance plans are the most affordable type of life insurance plans. These plans provide high insurance cover at a nominal premium amount. Some term insurance plans also offer whole life cover benefits with which you get a life cover till 99 years of age.
A term insurance plan helps you enjoy peace of mind and leave a financially stable future for your family in your absence.
02: What are the key features of a term insurance plan?
Following are the key features of a term insurance plan -
Budget Friendliness Long-term life protection Availability of riders Easy to Purchase Availability of whole life protection
03: What are the different types of term insurance plans?
Term insurance plans come in 5 different types namely Level Term Plans, Term Insurance With Return on Premiums (TROP), Increasing Term Plans, Decreasing Term Plans, and Convertible Plans.
04: What are different types of payout available under term insurance plans?
Different term insurance payouts are Lump Sum, Lump Sum plus Monthly Income and Monthly Income by way of monthly, quarterly, semi-yearly, and yearly installments.
05: Is suicide covered under term insurance ?
Generally suicide is not covered under term insurance plans. In case the life assured commits a suicide within 12 months of issuance of the policy, the nominee receives a minimum of 80% of the total premiums paid till the date of death after deduction of applicable taxes and charges.
06: What is the minimum and maximum entry age to purchase a term insurance plan?
Anyone who is between 18-65 years of age is generally qualified to purchase a term insurance plan.
07: If the policyholder passes away in a foreign country, will his term insurance be effective?
As soon as one purchases a term insurance plan, the policy will be effective disregarding the geographical whereabouts.
08: Is loan against policy available under term insurance plans?
No, facility of loan against the insurance policy is generally not available under term insurance plans.
09: Can I purchase term insurance even if I consume tobacco/alcohol ?
Yes, you can purchase a term insurance even if you consume tobacco/alcohol on a regular basis.
However, the premiums for people who consume tobacco/alcohol are usually higher than the ones who maintain a healthy lifestyle.
10: What are the different premium payment options available for term insurance plans?
The policyholder can choose to pay the term insurance premiums through Net Banking, Debit/Credit cards, NEFT (National Electronic Fund Transfer) or through any e-Wallets.
11: What Is a Term Life Insurance Plan?
Term life insurance plan or term insurance plan is a type of life insurance policy. Term insurance provides a guaranteed death benefit in the event of the death of the policyholder within the policy term. The policyholder can avail the benefits of term insurance in exchange of the policy premium.
12: What Are The Benefits Of A Term Plan?
The key benefits of a term plan include high sum assured at a reasonable premium, multiple death benefit payout options, freedom to add riders, income tax benefits, easy to understand, return of premium option, and more.
13: Why Is Term Insurance Important?
Term insurance is important to ensure financial stability of the surviving family members of the life assured in the event of the unfortunate death of the latter. Term insurance also plays a significant role by providing optional coverage for critical illness, accidental death and other unfortunate incidents.
14: Is It Good To Buy a Term Insurance Plan?
Yes, it is good to buy a term insurance plan! Term insurance plans help in not only strengthening the financial condition of a family in case of unexpected death of the earning member of the family, but also in ensuring peace of mind even during critical times.
15: What is the minimum and maximum entry age to purchase a term insurance plan? -
While the minimum entry age to buy a term insurance plan is 18 years, the maximum entry age is 65 years.
16: How To Choose The Best Term Insurance Plan In India?
You can easily choose the best term insurance plan in India for yourself by comparing different plan options on the basis of your specific requirements such as policy tenure, sum assured, premium and more aspects.
Choosing a term plan that fits your specific needs perfectly would be a fruitful decision.
17: Can a Housewife Take Term Insurance?
Most insurance companies in India do not provide term insurance options to housewives.
Since term insurance options are limited for them, it is advisable to invest in pension plans, ULIPs, endowment policies and money back plans.
18: Do You Get Money Back On Term Life Insurance?
Term life insurance does not provide money back. However, if a policyholder has a Return of Premium policy, they get a refund of the premium paid if they outlive the policy term.
19: When Should I Buy Term Life Insurance?
There is no right time to buy term life insurance. You can buy term life insurance at any point in your life. Experts advise investing in term life insurance as early as possible so that one can benefit the maximum while paying a low premium price.
20: How Much Does Term Insurance Cost?
The cost of term insurance or the term insurance premium is dependent on a few factors including age, gender, occupation, policy term, lifestyle, health, add-on benefits and more elements.
21: What Is The Difference Between Term Insurance And Whole Life Insurance?
One of the major differences between term insurance and whole life insurance is that term insurance offers a lump sum amount in the form of a death benefit, while whole life insurance offers the death and savings benefit.
Yet another difference is that while term insurance covers for a limited term, whole life insurance covers you for your whole life.
22: How Long Should The Duration Of Your Term Plan Insurance Be?
There is no specific term for which one must buy a term insurance plan. To calculate the duration of your term insurance plan, you must keep a few key aspects such as your age, liabilities, financial goals, affordability and others in mind.
23: What Is The Policy Term That I Should Select?
It is advised to choose the policy term enough to cover the risk of your loss of income. Therefore, you may either choose a policy term till your retirement age or a few years after the retirement.
24: What Are Term Insurance Riders?
Term insurance riders or add-on covers are optional benefits that a policyholder can add to their base policy to enhance the coverage.
One of the best features of term insurance riders is that they save one from buying different policies for availing different coverages.
25: If My Age Is 30 And Annual Salary Is Around Rs 5 Lakh, How Much Term Insurance Cover Should I Be Looking At?
If you want to find out the perfect term insurance cover, it is advised to not only consider your salary. You must also consider your expenses and liabilities while choosing a term insurance coverage amount.
26: Which Term Insurance Plans Provide Coverage Up To 100 Years?
Some of the term insurance plans that provide coverage for a longer period are; ICICI Pru iProtect Smart, HDFC Life Click 2 Protect Life, Max Life Smart Secure Plus, PnBMetLife Mera Term Plan and more. It is advised to check the exact coverage years under plans before making a decision.
27: Is Natural Death Covered In Term Insurance?
Natural death or death caused due to health conditions is covered under a term insurance policy.
28: How Are Term Insurance Plan Premiums Calculated?
The premium for term insurance plans is calculated on the basis of age, gender, policy term, occupation, lifestyle, health, add-on benefits and various other elements. Term insurance premiums may vary with insurer and plans.
29: What Happens If The Insured Dies Before Paying The Due Premium?
If the policyholder dies within the grace period before paying the premium, the insurance company will deduct the premium amount from the death benefit.
30: Why Are Premiums For Online Term Plans Lower Those Offered By Offline Term Plans?
Online term insurance plans come at a low premium price as compared to offline term insurance plans due to the fact that in online term plans, the customers directly interact with the insurance company, thereby leaving no scope for insurance agents and commission.
31: Are Deaths Due To Coronavirus Covered In a Term Plan?
Yes! Deaths due to coronavirus are covered in a term insurance policy.
32: How Much Term Insurance Do You Need?
If you want to find out the ideal term insurance cover you need, it is recommended to follow experts advice and decide your coverage amount about 15 to 20 times your annual income. You can also take a couple of aspects like age, health status, sum assured you wish to get and others for deciding the term insurance cover amount you need.
33: Can I Have Two Term Insurance Policies?
Yes! You can invest in more than one term insurance policies if your requirements demand you to. These policies can be from the same or different insurance companies based on your needs and choice.
34: Which Is The Best Suitable Term Insurance Plan In India?
If you want to choose the best suitable term insurance plan in India, you can opt for ABSLI Protector Plus Plan, Aegon Life iTerm Plan, Ageas Federal Flexi Term Plan, Exide Life Smart Term Plan and any other like such after considering your needs and comparing them with the benefits & features offered under the plan.
35: How Does A Term Insurance Plan Work?
Term insurance plans provide life cover for a defined period in exchange of a premium amount, which is preset. In case, any unfortunate incident takes place with the life assured resulting in their death during the policy period, the insurance company gives a fixed death benefit to the policy nominee.
36: What Documents Should I Have To Buy A Term Insurance Plan Online?
To buy a term insurance plan, you would need to provide; Proof of identity, Proof of Age, Proof of Address, Proof of Income, Medical Documents, Official Photographs.
37: Do Term Insurance Premiums Increase Every Year?
No! A term insurance premium will remain the same every year once the policy has been issued.
38: Do I Need A Term Plan In My 50s Or 60s?
Experts advise people in their 50s or 60s to buy term insurance if they are working and have dependents to look after. Having a term insurance policy by side even at such age can be of help in ensuring financial stability of family and securing your life post retirement.
39: What Are The Types Of Death Covered In Term Insurance?
The types of death a term insurance plan covers include natural death, death due to health-related issues and death due to an accident.
40: Are Term Insurance Plans Available Online?
Yes! Term insurance policies are easily available online.
41: How Much Risk Cover Should I Opt For My Term Insurance Plan?
According to the advice of the experts, one must opt for a term insurance coverage amount that is 10 to 15 times their annual income.
However, if you want to find out the ideal amount, you can easily do so by considering your health status, age, policy sum assured, and various others in mind before reaching a final amount.
42: Is Term Insurance Covered Under Section 80c Of The Income Tax?
Yes! Term insurance is covered under Section 80C of the income tax act with a limit of up to Rs. 1.5 Lakh.
43: Can a Term Plan Be Used For Repayment Of Financial Liabilities?
A term insurance plan can help you provide your family with a giant pool of finances, which in turn can help them prevent debts and loans or repay financial liabilities if you are no longer there to provide. This substantial amount will also be a great source of support in achieving goals like paying off debts, child’s education, marriage of your children, and more.
44: Is It Necessary To Buy A Rider With Term Insurance?
No! It is not necessary to buy a rider with a term insurance plan. Riders are not a compulsion, but are advised to be added to term plans so as to extend the coverage and enjoy various benefits attached.
45: Whom Should I Name My Nominee In The Policy?
If you want to appoint a nominee for your term insurance plan, you must choose someone who is trustworthy for you. It can be your spouse, son or daughter, father or mother or any other relative who you can depend on to take care of others in your absence.
46: Can I Change My Term Insurance Plans Details Later On During The Policy Tenure?
If you wish to change the term insurance plan's details, it is advised to do so during the free-look period, which is provided by the insurer for policy and specification reconsideration.
47: What Happens If I Don’t Die? Will I Get Anything In Term Insurance?
In general cases, if the life assured survives the policy term under their term insurance plan, the policy simply comes to an end. However, if the life insured had opted for term insurance with the return of the premium feature, they would get the premium paid at policy maturity.
48: Should I Buy A Term Plan Or A Traditional Life Insurance Plan?
The choice between term insurance and traditional life insurance depends on your specific requirements. If you are looking for an insurance cum investment option, choosing a traditional life insurance plan would be great.
However, if you want to cover yourself for only a specific period and financially support your family in case of your unfortunate demise, opting a term insurance policy would be beneficial.
49: How Can I Get Rs. 1 Crore Term Plan?
You can easily get a Rs. 1 Crore term plan online. It is advised to look for insurance providers offering Rs. 1 Crore sum assured insurance plans. It is important to note that if you fall under the policy’s eligibility criteria, you will be able to buy a Rs. 1 Crore Term Plan easily.
50: Should You Opt For Limited Pay Or Regular Pay Term Insurance Plan?
On choosing Limited Pay, you will have the option to only pay the premiums for a specific period of the policy tenure.
As per your wishes, you can pay off the premiums way before the policy tenure ends. On choosing Regular Pay, you will be required to pay the premiums throughout the policy tenure to enjoy life coverage. It is advised to choose an option that suits your needs the best.
51: Can I Change My Term Insurance Plans Details Later On During The Policy Tenure?
Changes to a term insurance plan are not allowed during the policy tenure. It is advised to be specific about your term insurance plan requirements before buying the policy to avoid inconvenience later on.
52: Can I Change The Frequency Of Payment For My Term Insurance Policy?
Yes, you can! It is advised to make any change regarding payment frequency at the time of the term insurance policy anniversary.
53: Can I Change The Duration Of Life Cover After The Term Insurance Policy Is Issued?
No! Unfortunately, you cannot change the duration of the life cover once the term insurance policy has been issued. It is advised to be sure of the duration before buying the plan.
54: What Happens To Term Life Insurance At The End Of The Term?
In case, you outlive your term insurance policy, at the end of the policy term you won’t have life coverage to support you anymore. If you still wish to be covered, it would be a better choice to buy a new term plan.
55: What Kind Of Deaths Are Not Covered In Term Insurance?
Deaths due to preexisting conditions, driving under the influence of alcohol, participation in adventurous activities, pregnancy and childbirth are among a few deaths that a term insurance plan does not cover.
56: How Many Times Can I Change The Nominee In My Term Plan?
You can change the nominee of your term insurance policy as many times as possible or as specified by the life insurance company.
57: What Happens If The Nominee Dies?
In the event of the death of the nominee of the term insurance policy before the policyholder, the benefits are payable to the policyholder/their heirs/legal representatives or holder of the succession certificate.
58: Do You Get Your Money Back At The End Of The Policy Term On Survival?
In general, term insurance policies do not provide money back at the end of the policy term on survival. However, if the policyholder has opted for the TROP (term insurance with return of premium), they get the entire premium amount as a survival/maturity benefit after policy maturity.
59: Can You Cash Out Term Insurance?
No! A policyholder cannot cash out their term insurance policy.
60: Why Is The Term Insurance Premium Amount For Smokers Higher Than That Of A Non-smoker?
The term insurance premium amount for a smoker is higher than that of a non-smoker because smokers are at a higher risk of getting infected by diseases like lung cancer, bronchitis, and more. Due to the lower life expectancy, smokers have to pay a higher premium amount.
Link: Understand more on Term Insurance in detail.
Terms and Conditions:
*Standard T&C Apply. For more details on risk factors, terms and conditions, please read the sales brochure of respective insurers carefully before concluding a sale. Tax benefits are subject to changes in applicable tax laws. For detailed communication on sales contact below authority.
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Insurance Advisory Club
IRDAI Licensed Agent
- Mr. Dheeraj Bodduna
Financial Advisor
Contact: 85220 66133
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