The Indian insurance market offers various types of insurance policies that cater to the diverse requirements of its population. One such popular insurance product is Term Insurance (TI), which provides financial security to the policyholder's family in case of the policyholder's untimely demise. With an increasing number of people realising the importance of financial planning, Term Insurance has become an essential financial tool for ensuring a secure future for the policyholder's family. This article highlights various benefits of Term Insurance Plans in India, their importance, and some frequently asked questions.
Life Cover Starting @ just ₹18/day*
Choose India’s Only Personalised Term Plan
Modify coverage as per your life stages & commitments
Hassle-Free Claim Settlement
99.38% Claim settlement ratio*
Smart Income Tax Savings
Save up to ₹54,600* on your taxes
So, let us delve into the top five advantages of purchasing a term insurance policy in India.
It is very hard to anticipate the course of life because we cannot be sure what will happen next. In case you die, term insurance will take care of your family financially. Death benefit is a one-off amount that goes to your nominee to ensure that they continue living without money problems.
In India, term insurance is very cheap. There are good coverage amounts at cheap premiums. Therefore, this is the best way of ensuring a better future for your family without necessarily feeling the pinch. This is a clever investment towards the health of your loved ones.
Is there anyone who does not want tax savings? It is important to know that term insurance premiums are also eligible for tax deductions under section 80C of the Income Tax Act. An extra benefit is that the death benefit obtained by your nominee is exempt under Section 10(10D). Thus, you get value for money while providing for your family. It's a win-win!
That means that in term insurance, it is up to you to choose the amount of cover based on what exactly it is that will fit for your family’s needs. You can determine how much it will cover such as paying back outstanding loans, daily expenses or children’s education among others.
Peace lies in knowing that your loved ones are safe to handle your financial matters while you are away. You can lead a more relaxed life knowing that your family is well catered for. That feeling of being secure is beyond price.
Here are some crucial factors you should think about when getting a term insurance plan in India.
Ensure that the sum assured (amount paid out should you die) adequately replaces the financial needs of your family. Consider expenditures such as debt payment, schooling of the kids, living costs and inflation, etc. Therefore, sufficient coverage means long term security.
Determine the length of time you need the cover. It should take you to the age when you retire or meet your obligations like educating children or clear your loans. Longer duration could be associated with a high premium.
The cost of premiums in this case is not too expensive, but it should also be taken into consideration. The premium should be affordable, and you should not find it difficult to pay it. There is an option of making single or regular premium payments.
Most term insurance plans also incorporate riders or add-ons such as critical illness cover, accidental death benefit, and disability cover. Assess yourself regarding these requirements and consider having them if necessary included into your policy.
Make sure that you read the policy documents and know what they do not cover. Examples of a typical exclusionary language include suicide in the first year and death as a result of pre-existing conditions in the waiting period.
Choose whether to affect the premium payments monthly, annually or in one lump sum. Go for a frequency that is affordable to your budget.
Identify a reliable nominee and make them understand the policy details. In case of death, this is the person who will be compensated with that claim amount.
Shop around and compare quotes from different insurers for the best deal. This brings us to a point where online insurance aggregators may come handy for this situation.
To buy a term insurance policy in India, you need to meet certain eligibility criteria:
In order to obtain the term insurance it is necessary that the person you are applying for is at least eighteen years of age. However, some insurers typically have a maximum entry age of about 65 years, so ensure that you do not exceed that age.
Usually, there is a minimum and a maximum policy term for the term insurance. This is the minimum period of time, it could be forty or fifty years depending on the insurer and the plan you choose.
In cases of death, the sum assured is the amount your family may receive. Nevertheless, the sum assured is not conditioned to any particular criteria. Choose a sum that adequately covers your family.
Generally the sum assured will be determined by proving your income. This makes sure that your family’s financial requirements are met.
Your premium could be affected in case you smoke or drink alcohol. You may be asked to pay more than smokers, drinkers or people who don’t smoke and drink at all.
However, in calculating the premium, some insurance providers may consider the nature of your occupation. The higher premiums may be attributed to risky professions.
Term insurance policies also offer riders such as accidental death and critical illness riders. However, eligible factors and conditions of such riders might be different.
In term insurance policy, different insurance companies provide their features. Make sure you understand these features and pick the one that works for you.
Riders are add-ons that enhance your basic insurance policy. In simple terms, they provide additional benefits and protection alongside your main term insurance plan. Here are the different types of riders in term insurance.
Imagine you're in a car accident, and something unfortunate happens. This rider provides an extra sum assured if your demise is due to an accident. It's like a safety net for you and your family.
Sometimes, we face severe illnesses like cancer or heart disease. This rider pays you a lump sum if you're diagnosed with a critical illness. It can help cover your medical expenses and ease your financial burden.
This rider gives financial assistance in case there is an accident that leaves you disabled, helping you in getting over the challenges and changes in your life as a result of the disability.
In the hustle and bustle of life, we often forget to plan for the unexpected. That's where term insurance comes to the rescue! But with so many options out there, how do you pick the one that's just right for you? Fear not, we've got your back with these simple tips.
Before diving in, take a moment to figure out how much coverage your loved ones would need in your absence. Consider factors like outstanding loans, daily expenses, and future goals. A little maths now can save a lot of worry later.
Policies come with terms and conditions (not the boring kind!). Be crystal clear about the policy term – how long it lasts – and whether it aligns with your financial goals. Some policies may offer coverage up to a certain age, so choose one that fits your plans.
Let’s talk about money. Premiums, to be precise. Find a balance between affordability and coverage. Some policies offer lower premiums initially but might spike later. Think long term and choose a premium you can comfortably handle throughout the policy duration.
Riders are like add-ons for your policy. They can provide extra coverage for specific scenarios, like critical illness or accidental death. Consider your lifestyle and health when choosing riders – it's like customizing your insurance plan.
What's not covered is as important as what is. Take a close look at the exclusions in the policy. Some policies may not cover certain illnesses or risky activities. Knowing these upfront can save you surprises later.
Decide whether you prefer the ease of online transactions or the comfort of face-to-face interactions. Online policies are convenient, but if you prefer a human touch, go for an offline option.
Simply put, term insurance is like a safety net for your family. Simply put, it’s a scheme that offers to your relatives monetary aid if, God forbid, misfortune befalls you within the period.
However, it has a cool element to it—it’s affordable. The reason why term insurance is so cheap. You simply pay a little more on your premium, and your family gains the necessary financial safety net for when life throws a curveball.
Imagine this: your family is a captain of a ship and you are its anchor. In case anything happens to you, this is an anchor to keep the boat steady in term insurance. Your family is sure of going through the storm of financial uncertainties without being worried about the waves that go with it.
As in planting, thinking about the future is like sowing seeds. The term insurance is the seed which leads to a big tree that offers shelter and shadow. It is a wise decision to provide for your family even if you are absent.
Guess what? You deserve a high-five from the government for being responsible. Term insurance is also subject to tax breaks. Therefore, this is a double-edged sword for you. You are providing for your family’s future while also getting a couple of economic benefits at the same time.
Picture this: you're sipping chai on a rainy day, worry-free. That's the peace of mind term insurance offers. Knowing that your family is financially secure allows you to enjoy life without constantly stressing about what ifs.
The ACKO Flexi Life Insurance Plan goes beyond traditional coverage, it provides a dynamic approach to meet your ever-changing needs. With the flexibility to tailor key aspects, you can ensure your family's financial well-being aligns perfectly with your vision.
Here is what makes it unique:
We help with the creation of a will to distribute your assets.
Customise important aspects of your coverage.
More in-built coverages to enhance your term insurance plan.
Here’s a list of common questions and answers related to benefits of Term Insurance plans in India.
Disclaimer: The content on this page is generic and shared only for informational and explanatory purposes. It is based on industry experience and several secondary sources on the internet, and is subject to changes.
1.5K Linkedin Followers 
Reviewed by Vaibhav Kumar Kaushik 
Acko Technology & Services Private Limited
#36/5, Hustlehub One East, Somasandrapalya, 27th Main Rd, Sector 2, HSR Layout, Bengaluru, Karnataka 560102
Products 
Company
Legal
Support
Car Insurance 
Bike Insurance
Health Insurance
Group Health Insurance
Travel Insurance
Life Insurance
