Q1. What are the benefits provided by Term Insurance Plans?
The prime aim of term insurance plansis the financial security of the family members. Hence, it provides the death benefits to the nominees on the death of the policyholder. The beneficiaries can obtain the amount either in lump sum or regularly, depending on the product terms and conditions.
Q2. When should I purchase a term plan?
Ideally, an individual must purchase a term insurance plan at a young age. When you buy term insurance plans early, the risks associated with your health are low. The insurance companiesdetermine the cost of your policies based on your age and your medical condition. The younger you are, the better your health, which eventually means less premium payment.
Q3. Can I opt for online term plans?
Certain insurance companies offer an online platformto buy term plans. These online term plans are convenient, affordable, and time-saving. If you’re looking forward to a hassle-free experience of buying term plans, follow the steps given below:
- Log in to the website of the insurance provider
- Fill the desired proposal form
- Choose the variants based on your needs
- Make an online premium payment
Q4. What is the tenure of term plans?
The tenure of a term policy must ideally be selected up to the length of your total earning span. For instance, if you plan on retiring at the age of 65, opt for tenure up to that age. In case you’re looking for a whole life coverage, choose an option that covers your entire life.
Q5. What factors determine the term plan costs?
The two most important factors that determine the costs of term plans are the sum assuredand the duration of the policy. For instance, the higher the sum assured, the greater will be the insurance premium, and vice versa. Besides, the other factors that impact the costs are smoking habits and the age of the policyholder.
Q6. Do term insurance plans provide riders?
Certain insurance providers offer riders along with term insurance plans to the policyholders. Opting for riders enhances the value of your coverage. It is an additional protection layer for your long-term security. Moreover, analyse your needs before investing in riders.
Q7. Does the term insurance plan allow tax savings benefits?
Term insurance plans allow exemption of taxes. Under Section 80C of the Income Tax Act, 1961, the premium paid is deductible up to Rs. 1,50,000 on taxable income. Additionally, death benefits are tax-free, according to Section 10(10D). However, these exemptions and deductions are subject to the provisions stated in the Income Tax Act, 1961.
Q8. Can NRIs purchase term insurance plans?
An NRI can purchase a term planby submitting all the essential documents like age proof and address proof to prove their citizenship of India. Plus, they must provide the insurer with Income proof such which includes financial documents like bank statements or pay slips and medical test reports.
Q9. How should I look for the right insurance company?
Compare policies to find the one which matches your requirements. Moreover, check the claim settlement ratio of the insurer before purchasing the policy. A claim settlement ratiosignifies the percentage of claims honoured by the insurance company. Hence, one of the best ways to opt for a term insurance plan from a company is by looking at their claim settlement ratio and suitability of the plans.
Q10. What happens if I survive the policy?
Since term plans don’t offer maturity benefits, a policyholder does not receive benefits if he survives the policy.
To sum up, investment in term insurance is one of the ideal ways to protect your family in the long run. With the financial safety of your family intact, you can live a relaxed and worry-free life. That way, you’ll be able to ensure protection for your entire family with ease even in your absence.
Q11. Can the premiums change after a period of time?
Premiums usually remain fixed throughout the policy term and do not change with time.
Q12. What is a joint term insurance plan?
A joint term insurance plan provides life cover for two individuals under a single policy, in most cases, spouses.
Q13. Do term policies cover accidental deaths?
Term policies usually cover accidental deaths. Some plans may also offer an additional payout if an accidental death benefit rider is added to the plan.
Q14. How much coverage do I need?
The required coverage depends on your income, financial responsibilities, and future goals. A common estimate is around 10 timesyour annual income, but a financial advisor can help determine the right amount.
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