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Apne life goals ki guaranteed1 hona Ye Bhi Sahi Hai
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What is Term Insurance?
Term insurance is the most affordable kind of life insurance. It offers financial protection in the form of a life cover to the nominee mentioned in the plan, if the insured person passes away. This financial protection is the sum assured under the term insurance policy. And, in return for this protection, the policyholder has to pay premiums to the life insurance provider.
The life cover offered by a term plan is valid for a specified period of time known as the policy term. Some term insurance plans may even offer a life cover up to 100 years of age . A term plan is also a pure life cover. This means that it does not come with any investment component.
So, if the insured person survives the policy term, they will not earn any returns in case of a regular term plan. However, if the insured person passes away during the policy term, the life insurance provider pays out the sum assured under the plan. This sum assured can then be used by the nominees to pay off any pending debts, take care of their regular expenses and pay for their life goals.
Get Information
- What is Term Insurance?
- Why do you Need a Term Insurance Policy?
- BALIC Term Insurance Products
- Types of Term Insurance
- How To Choose The Suitable Term Insurance Plan For You
- Why Choose Bajaj Allianz Life for your Life Insurance?
- What Is A Term Insurance Calculator And How Does It Work?
- Steps to use the Term Insurance Calculator
- How much Term Insurance Coverage do I Need?
- Picking a Term Life Insurance Coverage Period
Why do you Need a Term Insurance Policy?
Picture this. You are the sole breadwinner in your family of four. You earn around Rs. 50,000 a month, and your spouse and two children both rely on your income to finance their everyday expenses, meet the costs of running the household, and pay for their life goals. Your income is currently sufficient to take care of all these needs. And you have another 30 working years ahead of you, by which time you expect that both your children may finish their education and be financially independent.
However, an unexpected accident leads to your unfortunate demise, leaving your spouse and children without any financial protection. In this scenario, your spouse may either have to start working, or, if your children are old enough, they may have to give up their dreams of pursuing higher education and start earning for the family.
Term insurance ensures that your loved ones need not give up their life goals even in your absence. Here are the some common reasons you need a term insurance policy.
It protects your loved ones
A term life insurance plan gives your loved ones a financial safety net that protects them even in your absence. It helps them take care of their financial needs and live without compromising their standard of living. Furthermore, it ensures that they continue to achieve their life goals as planned. So, with a term plan in your portfolio, you can be rest assured that come what may, your child’s higher education or your spouse’s dream home will be achievable goals.
It is easy on the wallet
Term insurance is also affordable, since it is a pure life cover without any investment component. So, you can purchase a high life cover for pocket-friendly premiums. You can protect your family without straining your finances. This makes a term plan suitable for any individual looking for a life cover, no matter what the budget is.
It protects your family’s assets
In your absence, any debts or loans in your name will be passed on to your family members. If they have no financial safety net, they may have to resort to selling their assets like gold jewelry, house property or other such assets to obtain the funds needed to repay the debt. But the financial benefits from a term plan may ensure that your family’s assets remain intact, no matter what happens.
It comes with add-on riders
Term life insurance plans not only protect your nominees, they also protect you financially, thanks to the optional add-on riders available. They enhance the coverage offered and give you financial protection in case of some specific incidents. For instance, the critical illness insurance rider gives you a lump sum payout in case you are diagnosed with any of the specified critical illnesses under the rider. You can use this sum to pay for your treatment.
Similarly, there are also other common riders like the accidental permanent total/partial disability rider, the waiver of premium rider and the family income benefit rider etc. One should evaluate the purchase of these riders at the time of buying your base cover itself depending on one’s needs.
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How much Term Insurance Coverage do I Need?
Before you purchase a term insurance plan, there are many parameters that you need to decide on. and one of the important aspects to figure out is the amount of term insurance coverage you need. The amount of coverage is the sum assured under the plan. And needless to say, the larger the coverage, the better.
Having inadequate coverage can leave your family financially unprepared for their life goals. It may also make it tough for them to take care of their daily expenses. So, it is important to figure out how much coverage you need. ^Here are some ways in which you can do this.
Income Replacement Method
Expenses-Oriented Method
Human Life Value (HLV) Method
This is one of the simplest ways to determine the amount of coverage you need. It works on the principle that the sum assured under the term insurance plan should be sufficient to replace your income in case of your demise.
Here, your income replacement value is calculated as the product of your current annual income and the number of working years left. So, if you earn Rs.10 lakhs per year and you plan to work for another 20 years, you will have to get a term plan that offers a coverage of at least Rs.2 crores.
In this method, you need to figure out the total of your daily expenses, debts, loans, life goals like retirement and your children’s education and/or wedding, and the cost of taking care of your dependents for the rest of their lives. This figure indicates the financial safety net you need. From this amount, you can reduce any life cover or investment you already have to arrive at the term insurance coverage you need.
The HLV method takes into account various factors like your income, expenses, liabilities, future goals, and more to determine the ideal amount of term insurance coverage needed. It also accounts for inflation, making it a more accurate method to compute the amount of coverage you may buy.
You can use an online term insurance calculator to figure out the term insurance coverage needed using this method. All you need to do is input the details required, such as your annual income, the number of years you are planning to work, the percentage of increase in income you expect over these years and the percentage of income you spend on yourself. The term insurance calculator will then use these details to compute the term insurance coverage you require.
Picking a Term Life Insurance Coverage Period
Apart from the amount of coverage, you also need to select the right policy term for your term insurance plan. The coverage period of the term plan is the duration over which the policy is valid. The life cover will only be valid during this period. A short policy term may leave your family financially unprotected after a few years. So, it may be essential to choose a policy term that is long enough.
Here is how you can pick the suitable term life insurance coverage period.
- Long enough to cover your working years
- Long enough to cover your longest debt
- Long enough to cover your life goals
Your term insurance plan should be long enough to cover the number of working years left ahead of you. This is because in case something untoward happens to you during this period, the financial payouts from the term plan can help replace the loss of income for your family. So, for instance, if you are 30 years old now and plan to work till 60 years of age, your term plan should be at least 30 years long.
You may have availed several loans over the course of your working life, such as a personal loan for your emergency needs, a home loan to buy your dream house and even an education loan to fund your child’s schooling. In your absence, if these debts are unpaid, your dependents may have to repay these liabilities. So, your term insurance plan’s policy term should be long enough to cover your longest debt.
Over the course of life, you may have many goals to accomplish. This may include a family vacation, buying a new car, building your dream home, saving up for your children’s education and creating a retirement fund. In case of your demise, your loved ones will have to rely on the term insurance payouts to achieve these life goals. This is why your term plan should be long enough to cover your life goals.
How to choose the Suitable Term Insurance Plan For You
Choosing the right term insurance plan for your needs involves factoring in several parameters. Here are the primary aspects you need to consider before selecting the suitable term plan for you.
The amount of coverage
The first thing you need to decide on is the amount of coverage you need. There is no one-size-fits-all answer to this. You need to use any of the methods outlined above to arrive at the right amount of life cover you need. Ensure that it is large enough to cover your family’s daily needs, the cost of their life goals and any unpaid debts in your name.
The policy term
The next step to choosing the suitable term insurance plan for you is figuring out the length of your coverage. As outlined above, the term life insurance plan should have a policy term that is enough to cover your earning years, your longest life goal and your longest debt. This will keep your family financially protected in a comprehensive manner.
The cost of coverage
The suitable term plan for you is one that you can afford. If you buy a term life insurance plan that is out of your budget, you may find it tough to keep up with the premiums. This, in turn, could cause the policy to lapse. You will then lose all the benefits offered by your term plan. That’s why it is important to choose a term plan that you can afford to buy.
The add-on riders available
Add-on riders are additional optional covers that you can purchase along with the base cover for an extra premium. These riders offer financial coverage for specific incidents. Some common riders include the critical illness insurance rider, the accidental permanent total/partial disability rider, the waiver of premium rider and the family income benefit rider. Decide if you want any of these and buy them at the time of purchasing your base plan itself.
The claim settlement ratio
The suitable term life insurance plans offer reliable protection to your nominees. To ensure that this happens, you need to choose a life insurance provider with a high claim settlement ratio . This ratio indicates the percentage of claims that an insurer has settled during a given financial year vis-à-vis the number of claims received. The higher this percentage, the more likely that your nominee’s genuine claim will be settled promptly.
Bajaj Allianz Life Insurance Company has a high claim settlement ratio of 99.02%1 in the financial year 2021-22.
The solvency ratio
The solvency ratio indicates the strength of the cash flow within a company. In the case of a life insurance provider, it reflects on how financially capable the insurance company is of settling the claims received. The higher the solvency ratio, the better it is for you, since it means that the life insurance company has the financial ability to settle the genuine claim of your loved ones. The solvency ratio indicates the strength of the cash flow within a company. In the case of a life insurance provider, it reflects on how financially capable the insurance company is of settling the claims received. The higher the solvency ratio, the better it is for you, since it means that the life insurance company has the financial ability to settle the genuine claim of your loved ones.
The Insurance Regulatory and Development Authority of India (IRDAI) mandates a solvency ratio of at least 150%. Bajaj Allianz Life Insurance Company recorded a high solvency ratio of 581%** as at 31 March, 2022.
Term Insurance Calculator
When it comes to deciding the amount of insurance coverage you need or the amount of premium you need to pay for a specific term plan, it helps if you have an accurate estimate of the numbers involved. This makes financial planning much easier for you.
However, it is not always possible to make these calculations manually. Not only will such an exercise be tedious, but it could also be prone to a significant bit of human error. Here is where financial tools like a term insurance calculator can help you.
You and your family may have a long list of life goals waiting to be accomplished. For instance, you may want to buy your dream home, purchase your dream car, or take an extended international vacation. You will want to enroll your children in the top educational institutions and build a retirement fund that is enough to support you and your spouse comfortably after you retire from the active workforce.
But life can be unpredictable, and in case something untoward happens to you during the course of your working years, your family may be unable to fulfill their life goals in the absence of your income to support them.
Your Annual Income
1 Lakh
1 Crore
How long are you planning to work ?
5 years
30 Years
Years
Expected % increase in income
5 %
20 %
%
% of income you spend on yourself
5 %
50 %
%
You Would Need A Cover Amount Of ₹ 6,65,000 To Secure Your Family's Life Goals Reset Calculator Values
What is a Term Insurance Calculator and How does it work?
A term insurance plan provides your loved ones a financial safety net to fall back on in case of any untoward developments in life. But, to truly ensure that your family is well-protected, you need to have adequate coverage in place. If you have insufficient coverage, your family may not be able to meet their everyday needs or fulfill their life goals as planned.
A term insurance calculator is a simple online financial tool that helps you get a better idea of the amount of financial coverage that you will need to protect your family’s life goals. It takes into account various factors like your annual income, the number of working years remaining, how much you expect your income to increase and how much of your income you spend on yourself.
Steps to use the Term Insurance Calculator
Using the term insurance calculator from Bajaj Allianz Life Insurance is simple and easy. All you need to do is follow a few quick steps, and the term insurance calculator will show you the results instantly. Here is how you should use this online financial tool.
1
Enter your annual income
This indicates your earning capacity. For instance, if you earn Rs. 50,000 monthly, your annual income will be Rs.6 lakhs.
2
Enter the number of years you are planning to work
For instance, if you are 30 years now, and you wish to work till you attain the age of 65, you need to enter the number 35 in this field.
3
Enter the expected increase in your income
Over the course of your working years, you will undoubtedly receive hikes in your income if you are a salaried person. Alternatively, if you are self-employed, your business income will likely increase over the next few years. Fill in the percentage by which you expect your income to increase in the future.
4
Enter the percentage of income you spend on yourself
You may spend a part of your income to meet your wants and needs. For instance, if you earn Rs.50,000 a month, you may spend around Rs.5,000 each month to meet your leisure and entertainment needs etc. That means you spend around 10% of your income on yourself. This is what you need to enter in this field.
Once you have entered these details, the term insurance calculator will display the minimum amount of coverage you will need to protect your family’s life goals.
What Factors Affect Your Term Insurance Premium and Costs
A big part of deciding which term insurance plan to buy involves figuring out if the premium for the plan is within your budget. There are term insurance calculators that can help you compute the premium you need to pay for the amount and the type of coverage you need. To do this, the term insurance calculator takes a variety of parameters into consideration.
Here is a closer look at the top factors that affect your term insurance premium.
Your Age
The term insurance premium is generally lower when you are younger. This is because your mortality risk, which is simply the risk of death, is lower when you are young and healthy. As a result, the insurer’s risk is reduced, thereby leading to lower costs of coverage.
Your Gender
In most parts of the world, women tend to live longer than men$. Many life insurance providers factor and charge lower premiums for women policyholders. This is because the mortality risk for women is marginally lower.
Your Occupation
Some occupations are riskier than others. For instance, pilots, firefighters and stuntmen have riskier jobs than teachers, managers or insurance agents. So, some term insurance companies may take this factor into account to calculate the term insurance premium. The riskier the job, the higher the premium will be.
Your Lifestyle Habits
Lifestyle habits like smoking or alcohol consumption may lead to life-threatening illnesses like cancers and liver disease. They also increase the probability of an early demise. So, term insurance companies ask for this information to compute the premiums. People with poor lifestyle habits are charged higher premiums than individuals of the same age and gender without such habits.
The Coverage
The coverage is essentially the sum assured under the life insurance plan. It is the guaranteed amount that will be payable to your nominee in case of your demise during the policy term. The higher the sum assured, the more the coverage. And consequently, with all other parameters remaining constant, the premiums for a term plan that offers more coverage will also be higher.
The Policy Term
The policy term is the duration over which the coverage offered by the term insurance plan is valid. The death benefits guaranteed under the plan will only be paid out if the insured person passes away during this policy term. The longer the policy term, the greater the overall premium will be, because the insurance provider is taking on the risk of offering you coverage for a longer period.
Who Should Buy a Term Insurance Policy?
Term insurance is a necessity for anyone who contributes to the income of your family in any manner. In many cases, term insurance plans may also be necessary for people who contribute to the household in a non-financial manner. This is because in the absence of such individuals, the surviving members of the family may have to bear additional expenses for assistance in the tasks that the deceased member of the family took care of.
The benefits offered by term insurance are also multi-faceted. They include financial protection, affordable term insurance premiums and tax benefits. So, different kinds of people can benefit from this kind of coverage. Here is a closer look at the types of individuals who should buy a term plan.
1
Newly Married People
Newly married couples share many dreams and goals. It is also essential that they share the benefit of financial protection. If you're newly married, it is likely that your spouse depends on you for their financial needs. Alternatively, both of you may be contributing to the family income. A term insurance policy offers financial security to the surviving member in case of the death of a spouse.
2
New Parents
While parenting comes with many small and big joys, it also comes with several financial responsibilities. Right from the time your children are born, till the stage where they attain financial independence, you need to support them and take care of their everyday needs. You also need to give them a good education.
But in case something untoward happens to you, in addition to the emotional pain of losing a parent, your children will also have the financial burden of taking care of their needs. A term insurance plan will give your children the financial security needed to tide through these tough times. The payout from the term insurance plan can help them meet their day-to-day expenses, pay for their life goals and settle any debts you may leave behind.
3
Young Professionals
If you are a young professional earning a stable income, your family may likely depend on your earnings for their everyday expenses. But in your absence, the loss of income can be tough on the surviving members of your family. So, it is essential to get a term insurance plan to keep your loved ones financially protected. The advantage of getting a term plan at a young age is that your premiums will be extremely affordable. Young professionals can use this for their benefit and purchase a high cover at pocket-friendly costs.
4
Self-Employed Persons
Self-employed people have a financial portfolio that is quite different from the financial situation of salaried individuals. If you run your own business, chances are that your income will vary from one month to the next. You may also have personal loans and/or business loans in your name. In case something untoward happens to you, your family will have to bear the burden of these liabilities. In case of your demise, a term plan helps them meet these financial obligations without any hassle.
5
Working Women
Many families have now evolved into two-income households. Women are increasingly contributing to the family income and are becoming full-time working professionals. Working women need term insurance plans because if something untoward happens to them, their family could find it financially difficult to meet their regular needs. But with the payouts from term insurance, they can tide over the loss of income and continue to pursue their life goals. Additionally, term insurance also comes with add-on rider benefits at nominal extra cost, like critical illness insurance, among others, which covers several life-threatening conditions including ovarian cancer, cervical cancer and breast cancer.
6
Tax-Paying Citizens
As your income increases over the course of your working years, so will the rate at which you have to pay income tax.The highest tax slab in India comes with a tax rate of 30%. Fortunately, there are many deductions and exemptions that you can use to bring down your tax liability.
Term insurance plans offer tax benefits~ on the premiums paid. Under section 80C of the Income Tax Act, 1961, you can claim the premiums paid during the year as a deduction from your gross total income, up to Rs. 1.5 lakhs, subject to provisions stated therein. If you are a tax-paying citizen, particularly in the higher tax slabs, you can use this feature of term insurance to your advantage.
When Should You Buy Term Insurance?
It is always preferred to buy term insurance when you are young and healthy. This is how you can optimize the benefits and purchase a significant cover at extremely affordable premiums. When you are younger, the risk of your demise is low. So, the risk taken on by the life insurance company when they provide you a life cover is also on the lower end of the scale.
This benefit is passed on to the policyholder in the form of lower premiums. For this reason, it is essential to buy a term insurance plan when you are young and healthy, preferably in your 20s. That said, here are some scenarios or needs when a term insurance plan can be the suitable financial product to purchase.
When you are on a strict budget
If you are on a tight budget or have any major financial obligations, you may not be able to allocate a huge sum of money to buy a life cover. A term insurance plan can help you protect your family financially without compromising on your budget, since it comes with very low premiums. You can buy your term plan online to make it more affordable.
When you want additional, cost-effective coverage
If you already have a life insurance plan, but need additional coverage to protect your loved ones completely, you can opt for term insurance. This kind of a life cover gives you the additional life insurance coverage needed without any major financial outlay. You can secure your family’s financial future adequately in a cost-effective manner, because term plans offer high coverage at low premiums.
When your primary goal is financial protection
While other kinds of life insurance plans come with savings or investment components, a term plan is a pure life cover. So, if your priority is financial protection without the need for any additional savings or investment benefits, a term insurance plan fits your requirements perfectly. You can achieve your goal of securing your family’s financial future easily with a term plan.
Common Term Insurance Terminologies
Before you decide which term insurance plan to buy, you need to browse through your options, compare the plans available and understand the features and benefits they offer. While you are doing this, you may come across many term insurance terminologies that may be unclear or confusing that could prevent you from comprehending clearly the terms and features of the policy.
So, to help you make a more informed decision about your purchase, here is a list of some common term insurance terminologies and what they mean.
Life Assured
The life assured is the person whose life is covered by the term insurance plan. This is the person for whom the term insurance policy has been purchased.
Policyholder
The policyholder is the owner of the policy. This is the person who purchases the term plan.
Policy Term
The policy term is the period over which the term insurance policy is valid. The life cover offered by the term plan is valid during this period only.
Sum Assured
The sum assured under a term insurance plan, also referred to as the cover, is the guaranteed amount that the insurance provider agrees to pay the nominee on the death of the life assured. This sum is only paid out if the life assured passes away during the policy term. For instance, if you buy a plan with a sum assured of Rs. 50 lakhs, and if you pass away during the policy term, your nominee will receive the sum assured as the death benefit as per the terms & conditions of the policy.
Term Insurance Premium
The life insurance provider charges an amount from the policyholder for the life cover provided under the term plan. This amount is known as the term insurance premium. The premium can be paid as a one-time payment (in the case of single premium plans) or as periodic payments on a monthly, quarterly, semi-annual or annual basis depending up on the plan opted for.
Premium Payment Term (PPT)
The premium payment term is the period over which you are required to pay premiums for your term insurance plan. This period can be shorter than the policy term, or it can be of the same duration. In case of limited premium term plans, the PPT is shorter than the policy term, and you only have to pay premiums for a few years. In case of regular premium plans, the PPT is the same as the policy term, and you need to pay premiums as long as the policy is valid. You can also opt for a single premium plan, where you pay one time and enjoy the life cover for a longer period.
Return of Premium (ROP)
Regular term plans offer only death benefits. If the life assured outlives the policy, no payments are made by the insurer. But term insurance with Return of Premium ensures that the policyholder receives some benefit in case of maturity.
Return of Premium is an additional feature in some term insurance plans, where the premiums paid throughout the premium payment term are returned to the policyholder at the end of the policy term. This is only if the life assured survives the policy term, and if all the premiums due under the policy have been paid.
Free-Look Period
Free-look period is the duration during which you can cancel your term insurance plan without having to pay any penalty. If you are not satisfied with the terms and conditions of the term plan, you can cancel the policy during the free-look period easily. However, it is important to note that the mortality for the period covered before cancellation and the medical test expenses, if any, will not be returned. The free-look period is generally 15 days from the date of purchase for policies purchased offline, and 30 days for policies purchased online and distance marketed policies.
Grace Period
During the course of your policy term, you may occasionally forget to make a premium payment on time. Alternatively, you may not be able to pay one of the premium installments due to a financial emergency at home. In case of such a delay, your term insurance policy will not be canceled immediately. You will have a grace period, during which you can pay the premium.
This grace period is around 15 days for regular monthly premium payment option, and around 30 days for annual or other premium payment frequencies. If you fail to make the payment even during the grace period, the term insurance policy will lapse and you will lose all the benefits offered under the plan.
Term Insurance Riders
A regular term insurance plan only offers death benefits. You can enhance the financial protection offered by your term plan with the help of optional term insurance riders. These riders are add-on covers that you can buy when you purchase your term plan. In return for these riders, you need to pay a nominal extra cost called term insurance rider premium. Some common riders you can buy with your term plan include the accidental death benefit rider, critical illness benefit rider, waiver of premium rider and accidental total or partial disability rider.
Claim
In case any of the insured incidents occur, the policyholder or the nominee needs to submit a formal request to the insurance provider informing them of the incident and requesting financial payouts as guaranteed under the term plan or the rider. This request is known as a claim. For instance, if you are diagnosed with a critical illness and you have a critical illness benefit rider, you will have to raise a claim with the insurer. On the other hand, in case of your demise during the policy term, your nominee will have to raise the claim.
Features & Benefits of Term Life Insurance
Key Features of a Term Life Insurance Plan
A term insurance plan comes with many characteristic features. Check out some of the key features of a term plan below.
Pure Life Cover
Term insurance is a pure life cover plan. This means that regular term plans only offer death benefits. This is essentially the sum assured that is paid out as per the terms & conditions of the policy, if the life assured passes away during the policy term. However, there are no survival benefits in a regular term plan since it is a pure life cover. Only term insurance with Return of Premium (ROP) offers payouts if the life assured survives the policy term. In that case, the premiums paid during the policy term are returned to the policyholder.
Affordable Premiums
One of the defining features of term life insurance is that it is cost-effective. Being a pure life cover, the payouts in regular term plans are limited to death benefits. This makes it possible for insurers to charge affordable premiums. You can further bring down the cost of your term plan by buying your policy when you are young and healthy, and by purchasing it online.
Flexible Premium Payment Options
Term insurance plans offer flexible premium payment options. You can choose to pay your premium as a lump sum, one-time payment by opting for single premium plans. Alternatively, you can pay your premiums regularly on a monthly, quarterly, semi-annual or annual basis by choosing limited premium or regular premium plans.
In limited premium plans, you need to pay your premiums only for a short period. But in case of regular premium plans, you need to pay your premiums throughout the policy term. You can choose whatever is convenient for you.
Online Purchase
With the rapid digitization of the life insurance industry in India, it is now possible to buy your term plan online. All you need to do is choose your preferred life insurance provider, browse through their product suite, and select and pay the premium for your chosen policy after providing the necessary details and documents. You can then get your required term insurance coverage from the comfort of your home itself.
Different Types of Coverage
Term plans also offer different types of coverage. There are level term plans, where the cover remains constant throughout the policy term. Then, there are increasing term plans, where the sum assured increases over the policy term in a predetermined manner, up to a specific limit. You can also opt for decreasing term insurance if your debts will reduce over time. Here, the coverage reduces over the policy term.
Benefits of a Term Insurance Plan
Term life insurance offers the following benefits for policyholders and their nominees.
Financial Protection for your Family
If you contribute to your family’s household financially either completely or partially, your family members will be dependent on your income to meet their day-to-day needs and accomplish their life goals. In case something untoward happens to you, your loved ones will be left without any financial backup.
A term plan can ensure that your family is not left financially unprotected in your absence. The payouts made under the policy can help your loved ones take care of their daily needs and fulfill their life goals without any interruption.
A High Life Cover at Low Premiums
One of the primary benefits of a term insurance policy is that it offers high coverage at pocket-friendly costs. Since there is no investment component in a term plan, your entire premium is used to provide you a life cover. This is why it is possible to get a 1 crore term insurance plan like the Bajaj Allianz Life Smart Protect Goal- A Non Linked, Non Participating, Pure Life Term Insurance Plan for just Rs.20 per day2.
Long-Term Coverage
Term insurance plans offer long-term coverage, often up to 75 or 85 years of age. Furthermore, there is also whole life coverage in term insurance, where you get the benefit of a life cover till the age of 100. This kind of long-term protection ensures that your family is always financially secure in case of any unforeseen eventuality.
Tax Benefits
Term insurance also offers tax benefits~ in the form of deductions and exemptions. Under section 80C of the Income Tax Act, 1961, you are eligible to claim the premiums paid for your term plan as a deduction from your total income, up to Rs. 1.5 lakhs. This reduces your tax liability. Additionally, as per section 10(10D) of the Income Tax Act, 1961, the death benefits received by your nominee under the plan are tax-free. The above tax benefits are subject to the provisions stated therein.
Enhanced Benefits with Add-On Riders
Term insurance, by itself, offers death benefits in the form of a life cover. But you can rely on the add-on riders to enhance the protection offered by your cover. These riders offer financial coverage for specific expenses or requirements.
For instance, there is the accidental permanent partial/total disability rider, which gives you a lump sum payment in case you suffer from any partial or total permanent disability due to an accident. Then, there is a critical illness rider that offers financial coverage for select critical illnesses as defined under the rider. You can also enhance your term insurance plan with the waiver of premium benefit rider, family income benefit rider and accidental death rider.
You just need to pay a nominal additional premium for the rider/riders of your choice when you purchase the base plan, or at a later stage during the policy term.
Tax Benefits On Term Insurance Plans
Tax Benefits under Different Sections of the Income Tax Act, 1961
The Income Tax Act, 1961 contains the provisions for taxability and tax savings. Term insurance policies offer a wide range of tax benefits under different sections of the Income Tax Act, 1961. Once you get to know these provisions better, you can make use of the tax-saving benefits to reduce your tax liability.
Tax Benefits under Section 10(10D)
Section 10(10D) of the Income Tax Act, 1961, entails that any amount received from the policy, including death benefit is exempt from tax in the hands of the recipient, subject to satisfaction of conditions mentioned therein. So, in case of term plans, the amount received as death benefits will always be tax-free in the hands of the nominee.
This benefit is only available if the premium paid for the policy is less than 10% of the sum assured. Or, in other words, the sum assured should be at least 10 times the premium.
So, for instance, let’s say you purchase a 1 crore term insurance plan for an annual premium of Rs. 10,000. The policy term is 20 years. Here, the sum assured is more than 10 times the annual premium. So, section 10(10D) is applicable.
Now, in case of your unfortunate demise at any time during the 20-year policy term, your nominee will receive the sum assured of Rs.1 crore. This amount will be tax-free for them, and they don’t need to pay any taxes on the death benefits received.
Tax Benefits under Section 80C
Section 80C of the Income Tax Act, 1961 offers a wide range of deductions, subject to provisions stated therein. One such deduction pertains to the term insurance premiums paid for the policy you purchase. As per this section, the premiums paid for your term insurance plan during the financial year are deductible from your gross total income, up to Rs. 1.5 lakhs. This reduces your total taxable income, and therefore, also brings down your tax liability.
For instance, say you purchase a 1 crore term insurance plan that offers coverage for 20 years, for an annual premium of Rs. 10,000. So, as per the provisions of section 80C, you can claim Rs. 10,000 as a deduction from your total income, thus bringing down your tax liability.
Tax Benefits under Section 80D
Section 80D of the Income Tax Act, 1961, offers tax benefits on the premiums paid for a health insurance policy. However, this section also pertains to the health-related riders purchased for a term insurance plan, such as a critical illness benefit rider or a surgical care rider.
The deduction limits under this section vary based on the person for whom the term insurance plan is purchased and the age of the individual. These limits are as follows.
| Person for whom the term insurance rider is purchased | Age of the person | Maximum amount of deduction allowed on the rider premium |
|---|---|---|
| Self, spouse or children | Below 60 years | Rs. 25,000 |
| Self, spouse or children | Above 60 years | Rs. 50,000 |
| Parents | Below 60 years | Rs. 25,000 |
| Parents | Above 60 years | Rs. 50,000 |
Types Of Term Insurance Plans
There are different types of term insurance plans available in India today. And if you are planning to buy a term insurance plan to secure the financial future of your loved ones, you need to make the right buying decision. A major part of this is understanding the options available to you.
Broadly speaking, you can identify four common types of term insurance plans. Check out what they are and what benefits they offer, so you can decide on what the suitable term insurance plan for your needs is.
- Level Term Plans
- Increasing Term Plans
- Decreasing Term Plans
- Term Insurance with Return of Premium Plans
Level term insurance plans are the most common types of term insurance policies available today. As the name indicates, the premiums that are to be paid for the policy remain fixed throughout the premium payment tenure. The sum assured by the insurance provider also remains the same throughout the policy term. If you buy a level term plan when you are younger, you get the advantage of lower premiums.
Benefits of Buying a Level Term Plan
A level term insurance plan offers the following benefits.
Affordable Premiums
High Coverage
Easier Financial Planning
Level term insurance plans typically offer affordable premiums that are easy on your pocket. If you purchase your level term plan when you are young and healthy, you can make use of this benefit to the fullest.
Level term plans also offer a significant amount of coverage at competitive rates. The high coverage helps protect your family extensively. For instance, you can purchase the Bajaj Allianz Life Smart Protect Goal - A Non Linked, Non Participating, Pure Life Term Insurance Plan, which gives you a cover of Rs. 1 crore, at the nominal cost of just Rs. 20 a day2.
The premiums for a level term insurance plan remain fixed throughout the premium payment term. So, it is easier for you to find a level term plan that fits into your budget. Financial planning also gets easier since you know the costs upfront.
In an increasing term insurance policy, the sum assured under the plan increases by a specified amount or a specific percentage every policy year. However, the premiums for an increasing term plan will remain constant during the premium payment term.
Let’s look at an example to see how an increasing term insurance plan works. Say you purchase a term insurance policy that offers a sum assured of Rs. 30 lakhs at the outset, with a clause that the coverage will increase by 5% each policy year, till the sum assured reaches Rs. 50 lakhs.
So, on the first policy anniversary, the sum assured under the plan will increase to Rs. 31.5 lakhs. This continues till the sum assured reaches the predetermined limit of Rs. 50 lakhs.
Benefits of Buying an Increasing Term Plan
An increasing term insurance plan offers the following benefits..
A Hedge Against Inflation
Alignment with Life Goals
Life Stage Planning
The main advantage of an increasing term insurance plan is that it offers a hedge against inflation. Since the sum assured also increases on a yearly basis, your loved ones will be better prepared to meet the challenges of inflation when the payouts are made.
Your family’s life goals may change over time. And the costs associated with those goals will also change accordingly. An increasing term insurance plan helps your loved ones meet these life goals even in your absence, since the sum assured will be high enough to cover any new goals they may have.
If you buy a term plan when you are in your 20s, you may assume a smaller cover is enough for you. But as you move from one life stage to the next, you will need a larger cover to protect your spouse and your children. An increasing term plan meets this need easily.
A decreasing term insurance plan, as the name suggests, is a policy where the sum assured decreases on a predetermined basis. The premium will remain constant. The rationale behind a decreasing term insurance plan is that over time, your financial liabilities tend to reduce as you pay off your loans. So, a smaller cover may be enough to protect your family in case the insurable incident occurs after you have settled your debts.
Benefits of Buying a Decreasing Term Plan
A decreasing term insurance plan offers the following benefits.
Optimal Life Insurance Coverage
Affordability
If you have paid off your debts by your 40s, your loved ones will not have to worry about those debts in your absence. So, by ensuring that the sum assured aligns with your family’s financial obligations, a decreasing term insurance plan gives you optimal coverage.
Since the term insurance coverage reduces over time, the premiums for this kind of a life insurance plan tend to be more affordable. The reducing risk and liability of the insurance provider is reflected in the cost of the plan, and is passed on to the policyholder in the form of pocket-friendly premiums.
In regular term insurance plans, only death benefits are paid out by the life insurance provider in case of the insured person’s demise during the policy term as per the policy terms & conditions. However, if the insured individual survives, no payouts are made. But if you want to ensure that you get some kind of financial benefit for outliving the policy, you can opt for a term plan with Return of Premium (ROP).
Here, at the end of the policy term, if the insured person has survived the period, the insurance provider pays back the premiums received during the policy duration, subject to deduction of applicable taxes.
Benefits of Buying a Term Plan with Return of Premium
A term plan with Return of Premium offers the following benefits.
Benefit for Survival
Assured Returns
One of the main issues that hold back many people from opting for a term insurance plan is the fact that in case of regular term insurance, there are no payouts made if the insured person outlives the policy term. A term plan with Return of Premium takes care of this issue and gives the policyholder some kind of payout as per policy term & conditions if they survive the policy duration.
The return of premiums is guaranteed under this kind of a term insurance policy. So, you have a clear idea of the exact amount you will receive if you outlive the policy. This also makes financial planning easier.
Term Plan Riders
A term insurance policy pays out the sum assured under the plan in case of the insured person's demise. However, the benefits offered and the coverage available can be enhanced with the help of optional add-on covers known as term insurance riders. You can buy these riders at the time of purchasing your policy itself or in some cases even later during the policy term, for a nominal additional rider premium.
There are different types of term insurance riders available. Each rider offers its own unique benefits. Check out the riders offered by Bajaj Allianz Life Insurance Company.
Accidental Death Benefit Rider
The accidental death benefit rider offers financial coverage in case the insured person passes away due to an accident when the term insurance policy is active. The payout under this rider is in addition to the death benefit offered by the base cover. However, the amount of accidental death benefit cannot exceed the base cover.
Also, if the insured person passes away due to any reason other than an accident, the sum assured under this rider is not paid out. Only the sum assured under the base term plan is paid out.
For instance, let us assume you have purchased a term plan that offers a sum assured of Rs. 1 crore, along with an accidental death benefit rider of Rs. 30 lakhs. In case of your demise due to an accident, your nominee will receive Rs. 1.3 crores. However, in case of your demise due to any other reason covered by the plan, only Rs. 1 crore is paid out.
Accidental Permanent Total/Partial Disability rider
An accidental permanent disability, whether it is total or partial, may result in a loss of livelihood for the insured person since they may not be able to continue working as usual. This loss of livelihood will lead to a loss of income for their family.
An accidental permanent total/partial disability rider offers financial protection in case the insured person is disabled on account of an accident. This rider pays out the sum assured only if the disability is due to an accident. The financial benefits can help replace the loss of income for the insured person as well as their family.
Critical Illness Rider
A critical illness is any life-threatening ailment that requires medical and/or mechanical assistance to keep any vital organ functioning. Such a diagnosis can be emotionally and physically draining. With the cost of healthcare and medical intervention rising steeply year-on-year, managing a critical illness can also take a toll on your finances.
A critical illness insurance rider offers financial coverage in case the insured person is diagnosed with any of the illnesses covered. Some common critical illnesses covered by most term insurance policies include heart disease, kidney ailments and liver disease, among others. The add on rider available with Bajaj Allianz Life Smart Protect Goal- A Non Linked, Non Participating, Pure Life Term Insurance Plan covers 55 specified critical illnesses.
In case of a diagnosis, the insurance provider will pay out the benefits guaranteed under the rider as a lump sum amount. The base cover will continue to remain in place even after the rider benefits are paid out.
Benefits of Term Plans with Critical Illness Cover
A term plan with a critical illness insurance add-on cover is beneficial to the policyholder in many ways. Here are the top advantages of having a critical illness insurance rider.
- It offers additional coverage for specified critical illnesses.
- It protects you from rising medical and healthcare costs.
- With this rider in place, you can avail the medical care without worrying about the costs.
- The rider premiums are deductible from your total income under section 80D of the Income Tax Act, 1961, up to Rs. 25,000 (Rs 50,000 if you are a senior citizen).
Waiver of Premium Benefit Rider
In case the insured person is diagnosed with a critical illness, or if they suffer any permanent disability due to an accident, they may be unable to continue working and earn income as usual. During such financially stressful situations, it may become impossible for the insured individual to meet the cost of the term insurance plan.
A waiver of premium benefit rider ensures that all future premiums are waived off if the insured person is unable to pay them due to accidental permanent disability or a critical illness diagnosis . In a joint life cover too, this is available upon death of the primary life assured, in case the add on cover is availed with products like Bajaj Allianz Life Smart Protect Goal - A Non Linked, Non Participating, Pure Life Term Insurance Plan.
Family Income Benefit Rider
If you are the sole earning member of your family, or if you contribute to your household finances in any way, you will no doubt agree that any interruption or loss of your income can affect your family's financial situation quite adversely.
However, the future can be quite uncertain. And the income that you contribute to your household will come to a stop if you are unable to continue working due to any reason like a critical illness diagnosis, accidental disability or death.
A family income benefit rider ensures that in such cases, your family is not financially inconvenienced. This rider pays out a percentage of the sum assured on a monthly basis, for a predetermined period of time.
For instance, the Bajaj Allianz Life Family Income Benefit Rider – A Traditional Individual Life Insurance Plan, pays out 1% of the sum assured for the remainder of the rider term, up to a maximum limit of 10 years. This benefit comes into effect if the insured person passes away, suffers accidental permanent total disability, or is diagnosed with any of the specified critical illnesses.
Benefit Illustration of a 1 Crore Term Insurance Plan
The exact benefits and costs will vary from one insurer to another, as well as from one term insurance plan to another. To get more clarity on this, check out what the sample premium for the Bajaj Allianz Life Smart Protect Goal - A Non Linked, Non Participating, Pure Life Term Insurance Plan’s Life Cover variant2 looks like so, you can get a better idea of the costs and the benefits you will get from this term plan.
Bajaj Allianz Life Smart Protect Goal Plan Without Return of Premium2
| Annualized premiums for a policy term and a premium payment term of 25 years | ||||||
|---|---|---|---|---|---|---|
| Age | Life cover of Rs. 1 crore | Add-on covers | ||||
| Accidental Death Benefit cover of Rs. 1 crore | Accidental total permanent disability cover of Rs. 1 crore | Critical illness benefit of Rs. 10 lakhs | ||||
| 30-year male | Rs. 8,836 | Rs. 6,750 | Rs. 4,459 | Rs. 2,356 | ||
| 40-year male | Rs. 17,185 | Rs. 6,750 | Rs. 4,460 | Rs. 6,233 | ||
| 50-year male | Rs. 38,568 | Rs. 6,750 | Rs. 4,464 | Rs. 14,397 | ||
Bajaj Allianz Life Smart Protect Goal Plan With Return of Premium2
| Annualized premiums for a policy term and a premium payment term of 25 years | ||||||
|---|---|---|---|---|---|---|
| Age | Life cover of Rs. 1 crore | Add-on covers | ||||
| Accidental Death Benefit cover of Rs. 1 crore | Accidental total permanent disability cover of Rs. 1 crore | Critical illness benefit of Rs. 10 lakhs | ||||
| 30-year male | Rs. 20,113 | Rs. 12,647 | Rs. 8,031 | Rs. 5,582 | ||
| 40-year male | Rs. 41,629 | Rs. 12,647 | Rs. 7,943 |
Rs. 12,860 | ||
| 50-year male | Rs. 88,976 | Rs. 12,647 | Rs. 7,762 | Rs. 24,370 | ||
Bajaj Allianz Life Smart Protect Goal Plan: Whole Life Variant2
| Annualized premiums for a policy term and a premium payment term of 25 years | ||||||
|---|---|---|---|---|---|---|
| Age | Life cover of Rs. 1 crore | Add-on covers | ||||
| Accidental Death Benefit cover of Rs. 1 crore | Accidental total permanent disability cover of Rs. 1 crore | Critical illness benefit of Rs. 10 lakhs | ||||
| 30-year male | Rs. 27,285 | Rs. 6,584 | Rs. 4,255 | Rs. 2,356 | ||
| 40-year male | Rs. 46,992 | Rs. 6,496 | Rs. 4,221 |
Rs. 6,233 | ||
| 50-year male | Rs. 84,320 | Rs. 6,357 | Rs. 4,167 | Rs. 14,397 | ||
How to Buy a Term Insurance Online
With the advancements in technology and the digitization of the life insurance industry in India, it is now possible to buy a term insurance plan online, right from the comfort of your own home.
To buy a term insurance plan online from Bajaj Allianz Life Insurance, all it takes is a few simple steps, as outlined below.
1
Visit the Bajaj Allianz Life Insurance website at www.bajajallianzlife.com.
2
Check the term insurance plans available.
3
Select the policy of your choice and click on ‘Calculate Now’/‘Buy Now.’
4
Submit the personal details required, like your name, email ID, mobile number, date of birth, etc.
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Then, select your gender, mention if you are a tobacco user, and provide the other details needed, like your education, occupation, pin code, annual income etc.
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Then, submit the other policy-related details like the variant, life cover amount, the policy term, premium payment term, the premium payment frequency etc.
7
The premium amount due for the parameters you have entered will be displayed. You can modify any of the policy details provided, and the premium will change accordingly.
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If you find the premium that will be charged within your budget, click on ‘Buy Now’ to make the premium payment and complete your purchase.
9
Once you fill and submit the proposal form, your term insurance policy will be issued.
Documents Required to buy Term Insurance
Driving license, Passport, school/college certificate, etc.
Utility bill, Passport, Aadhaar card, etc.
PAN card, Aadhaar card, driving license
Passport size photographs of the applicant
Income tax return, employer’s certificate or Form 16
Medical test reports as required for some policies
Why Choose Bajaj Allianz Life for your Term Insurance?
A term insurance plan offers several benefits to your family. However, just as it is important to choose the suitable term plan, it is also essential to choose the suitable life insurance provider. Bajaj Allianz Life Insurance is committed to giving you comprehensive benefits and advantages. Here are some reasons to choose us as your term insurance provider.
A High Claim Settlement Ratio
The claim settlement ratio reflects the percentage of claims received that an insurer has settled. The higher this number, the better, since it indicates that the life insurance company honors its claims. Bajaj Allianz Life Insurance Company has a high claim settlement ratio of 99.02%1 for the financial year 2021-22.
A Vast Network of Branches
Bajaj Allianz Life Insurance also has a vast network of over 509* branches across the country. This wide network of physical branches coupled with a user-friendly online platform helps fulfill the needs of all kinds of customers, whether they are tech-savvy or prefer in-person assistance.
A Comprehensive Product Suite
There are several kinds of term insurance plans that Bajaj Allianz Life Insurance offers. Our comprehensive product portfolio includes term plans with different features like whole life coverage, critical illness insurance, optional benefits like accidental disability rider and waiver of premium benefit and many more, with the option of online plans that you can purchase from your home itself.
Prompt Claim Settlement
In case something untoward happens to you, you will undoubtedly want to ensure that your loved ones are not financially inconvenienced. Bajaj Allianz Life Insurance honors this need by ensuring quick and easy claim settlement of eligible claims with the 1-day claim approval% benefit on eligible policies.
Frequently Asked Questions
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Who pays the term insurance premium in a term plan?
The policyholder is responsible for paying the term insurance premium in a term plan. In case of a term plan, the policyholder is also the person who is insured by the plan.
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Who should opt for a Rs. 1 crore term insurance plan?
A Rs. 1 crore term insurance plan may be a good choice for the following kinds of people -
- Those who are the sole or the primary earning members of their family
- Those who already have a life insurance plan but want to increase their life insurance coverage at affordable costs
- Those who are young and want to obtain a significant amount of coverage at pocket-friendly premiums
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Is critical illness benefit rider, you have an option to buy along with life insurance policy worth it?
Yes, a critical illness insurance cover is definitely worth it because it gives you financial coverage in case of a critical illness diagnosis. You can get this coverage by purchasing a critical illness benefit rider along with your term insurance plan by paying nominal extra premium charges. If you have this add-on rider, your insurer will pay out financial benefits in case you are diagnosed with any of the critical illnesses covered.
You can then use these payouts to meet the cost of treating or managing your critical illness. Without a critical illness rider, you will otherwise have to pay for these costs out of pocket, thereby depleting your savings or your investments. So, a critical illness add-on insurance rider is financially beneficial since it offers payouts during an already stressful point in life.
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Are there any tax savings offered by term insurance plans?
Yes, term insurance plans help you save tax on a yearly basis. As per the provisions of section 80C of the Income Tax Act, 1961, the annual premiums you pay for your term plan are deductible from your total taxable income up to Rs. 1.5 lakhs each year subject to the conditions specified therein. This, in turn, reduces your total taxable income and thereby brings down your tax liability.
So, for instance, if you pay an annual premium of Rs. 80,000 for your term insurance cover, you can claim the entire amount as a deduction.
Furthermore, according to section 10(10D) of the Income Tax Act, 1961, the death benefits paid out from your term plan are not taxable in the hands of the recipient subject to provisions stated therein. So, the payouts from your term plan are tax-free.
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How much does term life insurance cost?
Although the exact cost of term life insurance varies from one life insurance provider to another, it is one of the most affordable kinds of life insurance. You can get a significant life cover at pocket-friendly premiums if you opt for a term plan. For instance, the Bajaj Allianz Life Smart Protect Goal - A Non Linked, Non Participating, Pure Life Term Insurance Plan gives you a cover of Rs. 1 crore at the nominal cost of just Rs. 20 a day2.
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What is the eligibility criteria for term insurance?
The exact eligibility criteria for term insurance varies from one policy to another. So, before you purchase a term plan, make sure you check the eligibility criteria such as the minimum and the maximum entry age, maturity age and sum assured. Also look into the different options available for the policy term and the premium payment term, so you can make an informed decision and only apply for the policies that you are eligible for.
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Do I have to pay an additional premium for the Return of Premium (ROP) feature?
Yes, the Return of Premium (ROP) benefit is an additional feature offered on some of the term insurance plans. So, to enjoy this benefit, your premium will be different as compared to a pure risk plan.
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Can I buy a critical illness cover online? What are the benefits of buying insurance online?
Yes, you can buy a critical illness cover online as an add-on rider at the time of buying your base term insurance plan. The benefits of buying your life insurance plan and your critical illness cover online include the following -
- Ease of research
- Increased transparency
- Lower premiums
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Is a Term plan with Return of Premium (TROP) worth it?
A term plan with Return of Premium (TROP) is a type of a regular term insurance plan. It offers a death benefit as well as a benefit at maturity. The maturity benefit entails that if you outlive the policy term, you get your premiums back from the term insurance provider, after the applicable Goods & Service Tax has been deducted.
A term plan with Return of Premium is worth it because it gives you some kind of financial benefit if you survive till the end of the policy term. In a regular term insurance policy, the policyholder does not get any benefits if they outlive the policy. This may discourage many people from opting for a term plan.
But the Return of Premium (ROP) feature changes this. It also allows you to take care of any pending life goals at the end of the policy term, since you will receive the premiums paid during the policy tenure as a lump sum amount. For instance, if your term plan with Return of Premium costs Rs. 10,000 per year, and if the policy term is 30 years, you will receive around Rs. 3 lakhs at the end of the policy term. You can use this to pay for your children’s education or their wedding, or you can add it to your retirement fund.
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Do I get my money back if I cancel my term life insurance with Return of Premium (ROP)?
No. The Return of Premium (ROP) feature only comes into effect if you survive the policy term. It will not be applicable for canceled policies. So, if you buy a term plan with Return of Premium and cancel the policy during the policy term, you will not be eligible for premium refunds.
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Can I opt for the ROP feature later on for an existing term plan?
No. The Return of Premium feature needs to be chosen at the time of purchasing your original term insurance plan itself. You cannot opt for it at a later date. So, if you want to enjoy the benefits of a term plan with Return of Premium, ensure that you opt for this feature at the time of making your purchase itself.
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What affects your life insurance premiums and costs?
Your life insurance premiums and costs are affected by a number of factors. Here is a list of the top parameters that drive the cost of your life cover.
- Your age
- Your gender
- Your occupation
- Your current health condition
- Your individual medical history
- Your family’s medical history
- The amount of coverage that you choose to buy
- The additional features or riders that you opt for, etc
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How long should my term life insurance coverage last?
There is no specific magic number for this. Ideally, your life insurance coverage should last long enough to cover your earning years and your financial obligations. The suitable term insurance plans have policy terms that are adequate to ensure that your dependents are not financially inconvenienced in case anything happens to you during the tenure of the term plan.
So, for instance, if you have a 10-year loan and if you plan to work for another 30 years, your term policy should offer you coverage for at least 30 years. Alternatively, if you are just 5 years from retirement, but you avail a 15-year loan, you need to buy a term plan that offers coverage for at least 15 years.
This way, in case anything untoward happens to you during your policy term, your family can rely on the death benefits to pay for the debts in your name or to replace the loss of income.
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Which types of death are not covered by life insurance?
The exact list of exclusions may vary from one life insurance policy to another, and from one insurance provider to another. That said, the following types of death are generally not covered by most life insurance plans.
- Death by suicide within 1 year of purchasing the policy
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Are there any add-on riders available for term insurance plans with Return of Premium?
Yes, there are many add-on riders that you can purchase with your term plan with Return of Premium. Some common rider options include the critical illness benefit rider, the family income benefit rider, the accidental permanent total/partial disability rider and the waiver of premium rider. These riders can be purchased for a nominal additional rider premium.
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Does life insurance cover pandemics?
Since pandemics are rare occurrences, there are no specific clauses including or excluding deaths due to a pandemic from your life insurance cover. However, in the case of COVID-19, all existing as well as new life insurance policies cover deaths due to the COVID-19 pandemic^^.
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How much life insurance should you carry?
For calculating the amount of life insurance you need, you can go by the common rule of thumb of having sum assured that is ten times your annual income#. For instance, if your annual income is ₹10 lakh, you should have a life cover worth at least ₹1 crore. However, according to experts, this method does not give you the exact picture. The calculation should be based on a number of factors like family expenses, future milestones and goals, retirement needs, debt repayments, your age and health.
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What is a death benefit?
The death benefit is the assured payout made by the insurance provider to the nominee mentioned in a life insurance plan, if the insured person passes away during the policy term. The amount to be paid as the death benefit is specified at the time of purchasing the policy itself.
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What is the time limit to claim life insurance?
There is no specific time limit within which the nominee should raise a life insurance claim. However, life insurance companies have to pay out the claims within 30 days of receipt of the claims, as per the Insurance Regulatory and Development Authority of India (IRDAI) mandate, except for cases where investigation is required.
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Does life insurance pay for death by suicide?
All life insurance plans do not cover death by suicide during the first year of the policy or one year from revival. Deaths by suicide after this period are covered. However, it is advisable to read the terms and conditions of your policy to understand the inclusions better.
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Who is eligible to claim term insurance premium tax benefit?
As per section 80C of the Income Tax Act, 1961, term insurance premiums are deductible from your total taxable income up to Rs.1.5 lakhs per annum subject to provisions stated therein. The policyholder is the person responsible for paying the term insurance premiums. So, it is the policyholder who is eligible to claim the tax benefits on the term insurance premiums paid during the year.
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What should I do in case of an accident or illness that is covered under my term plan?
Accident and illness are not covered under pure term plans; however, you can opt for insurance riders that cover accidents or any critical illnesses at nominal extra cost. If any such accident or illness occurs, you need to file a claim with your insurance provider promptly. The insurer will then verify your claim and pay out the benefits if you are eligible for them.
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Can I cancel my term insurance policy during its tenure?
Term insurance plans offer a free-look period of 15 days or 30 days depending on whether the policy is purchased online or not. During this period, you can cancel your term insurance plan without any penalty or fines. If you cancel your term plan during the free-look period, the premium you paid will be refunded to you , after deducting the premium for the period covered before cancellation as well as medical costs, and other charges if any.
However, if you want to cancel your policy after this period, you can do so by contacting your insurer. Alternatively, if you stop paying your premiums, your term insurance policy will automatically lapse. This is not advisable though, because you will lose all the benefits offered by your policy and your loved ones will be left without any financial protection.
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Is there an age limit to buy a term plan?
Yes, most term insurance plans come with minimum and maximum entry age limits. Before you buy your term plan, check out the eligibility criteria to make sure you qualify for the policy.
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Are there any optional covers available under the term insurance policy?
Yes, there are many optional covers called add-on covers/riders, that you can buy with your term insurance policy, such as the critical illness benefit rider, the accidental permanent total/partial disability rider, the waiver of premium rider, the family income benefit rider etc.
2Bajaj Allianz Life Smart Protect Goal - A Non Linked, Non Participating, Pure Life Term Insurance Plan (UIN: 116N163V03)| Above illustration is considering Male aged 25 years | Non-Smoker | Life Cover Variant | Policy term (PT)– 30 years | Premium Payment Term (PPT) – 30 years | Sum Assured opted is Rs. 1,00,00,000 | Online Channel | Medical rates | Annual Premium Payment Mode | Premium shown above is exclusive of Goods & Service Tax/any other applicable tax levied, subject to changes in tax laws, and any extra premium and is for illustrative purpose only.
~Tax benefits as per prevailing Income tax laws shall apply. Please check with your tax consultant for eligibility.
1Individual claim settlement ratio FY- 2021-2022
%95.49% of non-investigative individual claims approved in one working day for FY 2021-22. 1 day is counted from date of intimation of claim before 3 PM on a working day (excluding Non-NAV days for ULIP) at Bajaj Allianz Life offices.
*Branches as on 31 March 2022
**Solvency ratio 581% as at 31 March 2022 against IRDAI mandated 150%.
^https://www.livemint.com/money/personal-finance/four-methods-to-calculate-how-much-term-insurance-you-need-11605023306997.html
$https://pubmed.ncbi.nlm.nih.gov/23331196/
#https://www.livemint.com/money/personal-finance/four-methods-to-calculate-how-much-term-insurance-you-need-11605023306997.html
^^https://economictimes.indiatimes.com/wealth/insure/life-insurance/are-deaths-due-to-coronavirus-covered-by-life-insurance-policies/articleshow/74687234.cms
SMS Service
Dear Customer,
To get SMS updates on your policy - now you can refer to our glossary of pull sms services from the table:
| GLOSSARY - PULL SMS TABLE! | |||
|---|---|---|---|
| No. | Service | Type Keyword | Send To |
| 1 | For Callback for service related queries | SUPPORT<space>POLICY NO | 8108222251 |
| 2 | For Callback for renewal premium payment related queries (From Registered Mobile Number) | RENEW<space>POLICY NO | |
| 3 | For Branch Address | BRANCH<space>PIN CODE | |
| 4 | For Callback for Reinvestment related queries (From Registered Mobile Number) | REINVESTMAT<space>POLICY NO | |
| 5 | For Fund Value of Policy (From Registered Mobile Number) | FV<space>POLICY NO | |
| 6 | For Account Statement (From Registered Mobile Number) | ACCSTMT<space>POLICY NO | |
| 7 | To Update Email Address (From Registered Mobile Number) | EREG<space>Unique ID*<space>DOB of policyholder in DDMMYYYY<space>email id | |
| 8 | For Callback for queries related to fund switching | FSWITCH<space>POLICY NO | |
| 9 | For IT Certificate (From Registered Mobile Number) | TAXCERT<space>POLICY NO | |
| 10 | For Claim status | CLAIM<space>POLICY NO | |
Disclaimer: By using above SMS services kindly note that you would be authorizing to receive call(s) / SMS from Bajaj Allianz Life Insurance Co. Ltd through its representatives on your tele-contact no with respect to the query for which you have requested call back even if it is registered under NCPR/NDNC registry with your telecom operator.
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