Best Term Insurance for Salaried Professionals in India

Being a salaried individual or the primary breadwinner comes with numerous responsibilities, with protecting your loved ones at the top of the list. Term insurance is a valuable financial tool often chosen by many salaried individuals in India to protect their loved one's financial future in case of any unforeseen event. Read on to understand the importance of term insurance for salaried persons, key features to consider when choosing the right plan, and more.

Being a salaried individual or the primary breadwinner comes with numerous responsibilities, with...

Term Life Insurance that Welcomes Change

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

ARN: L0088 | *T&Cs Apply

What is Term Insurance?

Term insurance offers pure protection by providing life coverage for a specified term (duration). The death benefit is paid if the insured person dies during the policy term. If the insured outlives the period, the insurance company does not pay. Term insurance plan differs from other forms of permanent life insurance in that it does not build cash value or offer maturity benefits. However, it is a highly affordable option for many salaried individuals across different income brackets.

Who are Salaried Individuals?

Salaried people are those who work for any organisation or company. They receive a specific amount of money as a salary or wage in exchange for the work done by them. They are paid a fixed sum at the due time, generally monthly.

These people work for companies, departments within the government, or even some non-profit organisations.
Salaried jobs often have various perks, including job security, paid leave, health insurance coverage, and retirement plans.
Salaried individuals usually enjoy a fixed working hour, often between 9 and 5, though some may be called to work extra hours due to the nature of their tasks.

Overall, the main advantages of being a salaried employee are stability and a predictable income, which make managing and planning personal finances relatively easy.

Why Salaried Individuals Need Term Insurance?

There are multiple reasons why salaried individuals need term insurance. Some of the key reasons include:

Financial Security for Dependents

As a salaried individual, your earnings are often essential for the survival of your family members. Term insurance ensures that your family members have the financial support to maintain their standard of life even in your absence.

Coverage for Debts

Many employed individuals have debts, either on their homes or personal loans. Term insurance covers these debts, easing the burden left to their families when they are no longer around.

Low Premiums

Term insurance typically offers a relatively lower premium than other life insurance products. Many salaried individuals easily obtain satisfactory coverage without overstretching their budgets.

Simple and Straightforward

Term insurance plans have a pretty simple meaning with well-defined terms and conditions. This makes it easier for salaried individuals to choose the correct plan according to their needs.

Key Features of Term Insurance for Salaried Individuals

Term insurance is a simple and effective form of life insurance and is an ideal option for those with stable incomes. So, let’s look at some of the key features of term insurance:

Adjustable Coverage Amount / Sum Assured

The salaried can select the coverage amount that he or she determines would be necessary to fulfil his or her financial responsibilities. This ensures sufficient protection for the family if the salaried person loses his or her life.

Policy Terms

Most insurers offer a range of policy terms (coverage duration), so you can select the term that matches your age and financial objectives.

Riders

Most term insurance products offer optional riders like critical illness cover, accidental death benefit, and waiver of premium on permanent disability. Adding these riders involves paying extra premiums.

Tax Benefits

Premium paid on term insurance is eligible for tax deduction under Section 80C of the Income Tax Act. This means salaried individuals can save a lot of money from their taxes.

How to Choose the Right Term Insurance Policy?

Choosing the correct term plan requires consideration of various factors. Among all, four key factors you must not overlook include:

Coverage Requirements

Your coverage amount should be based on your income, debt, and the needs of those financially dependent on you. Standard advice is to take coverage equal to 10 to 15 times your annual income.

Compare Policies

Research and compare policies from various insurance companies. Be patient and always look for competitive premium rates and additional benefits.

Check the Insurer's Reputation

To ensure reliability, look for insurance companies with a good reputation, strong claim settlement ratios, and positive customer reviews.

Consult a Financial Advisor

If you are unsure which one to choose, a financial advisor can help you review the options and make the right choice based on your financial goals.

Unique Term Insurance Option From ACKO

ACKO Life Flexi Term Plan is a modern, highly flexible, customer-centric solution for long-term financial protection. Under this plan, policyholders can make modifications to the policy, including:

Changes to your personal details (address, phone number)
Adjusting the Sum Assured or Policy Term
Adding or changing riders
Update nominee details and payout modes
Raise claims- All through the mobile ACKO App.

Useful Life Insurance Riders from ACKO

ACKO’s valuable life insurance riders are designed to enhance coverage to fit your needs.

ACKO Life Accidental Death Benefit Rider

Accidental Death Benefit Rider is one of the most affordable riders, built purely to protect your family financially in case of your demise due to an accident.

ACKO Life Accidental Total Permanent Disability Benefit Rider

With the Accidental Total Permanent Disability Rider, you will receive a sum that will enable you to cover your essential day-to-day needs if you are unable to work and take care of yourself due to an accident resulting in total permanent disability. It will also cancel all future premiums of your ACKO Life Flexi Term Plan.

ACKO Life Critical Illness Benefit Rider

This Critical Illness Rider from ACKO covers 21 critical illnesses, including life-threatening common illnesses among women, such as breast, cervical, fallopian, and ovarian cancer.

List of Covered Critical Illnesses:


✔️ Cancer of Specified Severity	✔️ Multiple Sclerosis With Persisting Symptoms
✔️ Myocardial Infarction (First Heart Attack Of Specific Severity)	✔️ Benign Brain Tumor
✔️ Open Chest CABG	✔️ Deafness
✔️ Open Heart Replacement Or Repair Of Heart Valves	✔️End Stage Lung Failure
✔️ Coma Of Specified Severity	✔️ End Stage Liver Failure
✔️ Kidney Failure Requiring Regular Dialysis	✔️ Loss Of Speech
✔️ Stroke Resulting In Permanent Symptoms	✔️ Loss Of Limbs
✔️Major Organ /Bone Marrow Transplant	✔️ Major Head Trauma
✔️Permanent Paralysis Of Limbs	✔️ Primary (Idiopathic) Pulmonary Hypertension
✔️ Motor Neuron Disease With Permanent Symptoms	✔️Third Degree Burns
✔️Third Degree Burns

Conclusion

Term insurance is a vital component of financial planning for salaried individuals, such as you, in India. It ensures proper financial protection for your family members. The sum assured can be used to clear debts and serve as income replacement in the case of your untimely demise. When purchasing term insurance, remember that properly assessing your requirements allows you to choose the right plan to secure your family's future.

Frequently Asked Questions (FAQs)

What is term insurance?

Term insurance is a type of life insurance that pays a death benefit to the beneficiaries if the insured dies during the term.

Why does salaried need term insurance?

Term insurance covers the financial security of dependents, pays debts, and provides affordable protection.

How much coverage should I need?

A good rule of thumb is opting for coverage 10 to 15 times your annual income.

Can I convert my term life insurance to a permanent policy?

Many companies offer conversion to a permanent policy without further medical underwriting.

What happens if I outlive my term life insurance?

If you survive the policy, the coverage ends, and there is no payout. However, you may have the option to renew or convert the policy.

Are term insurance premiums tax-deductible?

Yes, premiums paid on term insurance policies are eligible for tax benefits under Section 80C of the Income Tax Act.

Can I add riders to my term insurance policy?

Many term insurance plans allow you to add riders, such as critical illness cover and accidental death benefits, though they come with additional premiums.

How to choose the insurer?

Select insurers with high financial ratings, good customer reviews, and a high claim settlement ratio for reliability and support.

Is term insurance the best option for salaried individuals?

For many salaried individuals, term insurance is the most cost-effective way to secure adequate life coverage.