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What is Term Insurance?

Term insurance is an insurance contract between the insurance company and the policyholder. The contract details the conditions under which the insurance company may pay sum assured under the policy to the nominees if the life insured passes away during the policy tenure.

A term insurance plan is usually valid for a particular period, called the tenure of the plan. To receive term insurance benefits and to keep the policy active, the policyholder must pay certain pre-defined amounts (called premiums) to the insurer. Premiums payments can be made at once with the single premium option, Or, they may be paid either for a limited term or throughout the tenure of the policy, in regular instalments.

There are several types of life insurance plans, but for some, term insurance may stand out. Term insurance plans might be preferred by those who find the approach of these plans easy and the premiums to be affordable. These plans can help in offering financial security to the family of the life assured, without the burden of high premiums.

The premium of a term insurance plan may be based on different factors. 

A term insurance plan may prove to be useful in several ways, as it might be able to:

Protect Your Loved Ones financially

One major reason people may buy term insurance is to secure the future of their loved ones financially. If the life insured passes away and tough times arise, the pay-out from a term insurance plan may act as a financial recoup.

Be Easy On The Wallet

Term insurance premiums may be comparatively lower than other plans’ premiums. This may be because term insurance policies do not have any savings or investment element as a part of their structure.

Helps in Protecting Your Family's Assets

One may consider buying term insurance plan as the financial pay-out from the term plan may help your family pay off outstanding debts or liabilities,if any

Offers Add-ons/ Riders

Add-ons/riders are additional coverages that may be added to term insurance plans by paying a nominal extra premium. Some term insurance add-ons may include critical illness benefit rider, accidental permanent total/partial disability rider, accidental death benefit rider, waiver of premium rider, family income rider amongst others.

Helps You Stay Prepared for Uncertainties

Uncertainties do not come announced; they may often crop up with no warnings and leave one shocked and disturbed. A term plan may not help you avoid uncertainties, but it may help you stay prepared for them.

A term insurance plan may be purchased by anyone. However, some people may find term insurance to be a particularly suitable financial product, especially if they are:

Parents:

For a parent, few things may be a top priority such as securing the future of their child. They work hard so that their child may pursue their dreams. As a parent, you may not want to think of a scenario in which you are no longer there for your child. However, unfortunate times may strike anytime and leave your child bereft of the security you provide. With a term insurance plan in place, you may rest assured your child has the support to continue living a financially secure life.

Newly Married Couples:

You and your spouse may have a large list of things to tick off at the start of a new life, together. You may want to go on an exciting honeymoon or buy a house together. In the excitement, worries related to future finances may take a backseat. However, buying term insurance when one is newly married can be quite beneficial. Term Plan may be considered important if one spouse depends financially on the other. If one is young, the term insurance premium may be lower, too.

Working Women:

As a working woman, you may be giving your best to ensure a financially strong life for yourself right now. However, you must not overlook the future. A term life insurance plan may be the answer to the financial challenges it may bring. If an unfortunate event were to occur, your loved ones may not face a financial strain. This may allow you to focus more on the present.

Young Professionals:

In the heady excitement of youth, one may not exactly have the prospect of buying term insurance at the top of their mind. However, if your family members depend on your earnings to any extent, a term insurance plan may be necessary. Moreover, the term insurance premium of young people may be on the lower side, since they may be relatively healthier than older people.

Taxpayers:

Taxpayers may benefit from buying term insurance plans, because of the substantial tax benefits under Section 80C and Section 10 (10D) of the Income Tax Act of 1961 subject to satisfaction of conditions mentioned therein[1]. One may claim a tax deduction of up to Rs 1.5 lakhs under Section 80C of the Act under old tax regime. A tax exemption on the death benefit pay-out may be gained under Section 10 (10D) of the same Act, provided the terms and conditions mentioned therein are met. You may want to consult your tax advisor for more details.

Retirees:

Even during retirement, you may have a source of income on which your spouse or your children may be dependent. Your demise may cause them financial worries on top of the emotional strain. Hence, a term insurance plan may help in serving as the right solution to such concerns. A term insurance plan may also help in allowing you to leave a legacy for your children or grandchildren.

If a life insured passes away during the policy term, the nominee(s) of the term insurance policy can raise a claim against the policy. The claim is processed by the insurance company, and, if approved, the sum assured is paid out to the nominee(s). When you buy a term insurance plan either offline or online, you agree to pay a premium in return for life insurance coverage. Premiums keep the policy active. The premium and the sum assured are fixed throughout the tenure. However, with some plans, the term insurance premium and/or the sum assured may increase or decrease after a particular period.

For those wondering, a term insurance calculator is an online tool to figure out the estimated coverage you may need (based on different variables). The factors considered in the process may include your annual income, how long you plan to work, the percentage of income expected to increase, and the amount you spend on yourself.

Broadly speaking, there may be four types of term insurance policies to choose from:

Standard Term Plans:

These plans may be considered to be a straightforward form of term insurance coverage. The premiums of a standard offline or online term insurance plan may stay the same throughout the tenure, and so may the sum assured. The policyholder can pay the premium to keep the plan active. If the insured passes away during the tenure, the nominees of the term insurance plan may raise a claim and receive the pre-determined sum assured.

Increasing Term Plans:

In an increasing term plan, the sum assured for the plan increases by a particular amount or percentage every year. However, the premiums continue to stay the same as before, throughout the policy term. For instance, consider that you purchase an increasing term insurance plan with a sum assured of Rs 50 lakhs. The rate of increase in sum assured is 5% each year. So, in the next year of the policy, your sum assured may increase to Rs 50,25,000. This increase may happen each year until a certain upper limit, for e.g. Rs 1 crore, may be reached.

Decreasing Term Plans:

In a decreasing term insurance policy, the sum assured decreases after a particular period, basis a pre-fixed rate. Similar to an increasing term plan, the premiums of the plan continue to remain the same. A decreasing term insurance plan may help individuals who seek coverage for a specific purpose until a certain period. For instance, you may have taken a sizeable loan and may not wish for your family to bear its burden in your absence. A decreasing term insurance plan may be of help here. As you pay off your loan debt, the outstanding liabilities on your shoulders may reduce. Simultaneously, the sum assured from your term plan may also decrease.

Term Insurance with Return of Premium Plans:

With a term insurance plan with return of premium option, a policyholder receives the sum of all premiums paid if they survive the policy term. There is no savings element attached to such a term insurance plan. The maturity pay-out you receive is calculated based on the total amount of premiums you paid, minus the standard deductions applicable.

Knowing the features of term insurance policies is vital to understand how it differs from other types of life insurance plans. Here are some significant features of a term plan:

Pure Life Cover:

A pure term insurance plan only offers life insurance and may not have any savings or investment components attached to it. They do not have any maturity benefits after the policyholder survives the tenure. The only exception is a Term Plan with Return of Premium (TROP), which offers survival benefits to the policyholder.

Flexible Options to Pay Premiums:

Based on your financial planning, you can choose the tenure of your recurring term insurance premium. Based on the frequency that suits you, you may pay your premiums either monthly, quarterly, bi-annually or annually. You can select single-premium term insurance plans if you wish to pay a lumpsum premium.

Convenient Online Option:

You can buy a term policy online too at your convenience. You can compare different plans online and narrow your choices based on the ones that suit your needs. Also, when you buy a term plan online, you may find managing the policy in the long haul easy.

Different Types of Coverage:

Based on your needs, you may choose from the distinct types of coverage a term plan offers, like a pure term policy, an increasing term plan, a decreasing term plan etc.

Easy to Buy:

Buying term insurance policies may be an effortless process. You may easily buy a term insurance plan by comparing several different plans available in the market. You may narrow your choices based on your requirement. When you buy online term insurance, the process may be completed within a few minutes. Filling out the form online and uploading the necessary documents may be carried out easily and without much hassle.

Easy Premium Payment Options:

Term insurance plans have flexible premium payment options. You may pay for your plan through several modes online or offline, based on your payment cycle. You may also choose autopay options for your premiums to ensure timely and stress-free payments.

Flexible Pay-out Options:

For your term life insurance policy, you may choose a pay-out option in which you may want your nominee to receive the death benefit in your absence. You can choose a lump sum pay-out option or a lump sum pay-out with fixed monthly pay-outs. Lump sum pay-out with increasing monthly pay-outs is also an option.

Low Entry Age:

Most of the life insurers provide term insurance in the age at entry range of 18 to 60 years, whereas some insurers may also offer a policy till age at entry of 65 years. . The early entry age allows young professionals to secure their financial future with a term insurance plan. Furthermore, at an early age, you can get an affordable premium for your desired sum assured.

Since term life insurance is a simple type of life insurance, it is easy to understand and buy one. Here are some benefits you can get.

Financial Protection for your Family

If you are the breadwinner of your family or a partial contributor to your household, your family members ideally may depend on your income to live a quality life. In your absence, they might find themselves in a financially vulnerable place. A term insurance plan may act like a financial reserve your family can rely on when you are not there. The death benefits they receive may help them live a life with a secure financial future.

An optimum Life Cover at affordable Premiums

One of the essential benefits of term insurance plans is the affordable premiums the plan offers. It is because a term plan is pure life insurance for a specific tenure with no investment component. Hence, you can choose a life cover that suffices to cater to your family’s needs and pay off your liabilities in your absence.

Long-Term Coverage

You can choose the tenure of your term insurance based on your long-term financial planning. Insurance providers allow you to get coverage for up to to 99 or 100 years of age, depending on the plan type. A long-term cover ensures that your loved ones are financially secure over your working years.

Tax Benefits

There are several tax benefits you may get when you buy term insurance. The premiums you pay for your term insurance are subject to tax deductions according to Section 80C of the Income Tax Act, 1961, subject to provisions stated therein[1]. The limit of overall deductions that you can claim under the section is Rs 1,50,000 annually. The exemption benefit is only available for taxpayers who choose the old tax regime. There are no tax deductions available on term insurance under the new tax regime. The death benefits your nominee may receive in your absence is also exempt from taxes as per Section 10(10D) of the Income Tax Act, 1961. Note that any income from life insurance policies (other than a ULIP) with aggregate annual premiums over Rs 5 lakh will not be exempt from taxes if the policy is issued on or after 1 April 2023. However death benefits received under the policy will continue to be tax-exempt in the hands of the recipient. [5]

Protection Against Liabilities

When you are starting a family and growing in your career, you may likely take different forms of loans to address your financial needs. For example, consider that an individual has taken a home loan for 30 years and is paying their EMIs easily with their salary. However, in a sudden accident, they lose their life. The family of that individual may now be burdened to pay off the home loan and any other debts he/she may have taken. They may have to exhaust all their finances and struggle to make ends meet. Instead, if the individual had a term insurance plan with a sufficient sum assured, it might have been usable for the family to pay off any liabilities of the policyholder. Hence its essential to consider your liabilities when you choose the sum assured of your term plan.

Enhanced Benefits with Add-On Riders

Along with the base life cover, term insurance plans also offer several riders that you can choose from. These riders are additional benefits offered to you for which you have to pay additional nominal premiums. Based on your requirements, you can choose riders of your choice. The common term plan riders may include accidental death benefit rider, critical illness rider, accidental permanent total/partial disability rider, waiver of premium benefit rider, and family income benefit rider.

Survival Benefits

A regular term insurance plan may not offer you any survival benefits when your plan matures. However, there is a type of term policy that may also offer survival benefits. It is the Term Insurance Return of Premium (TROP) plan. When your term insurance matures, you get survival benefits in this plan. You receive back an amount corresponding to the overall premiums you had paid to your insurance provider. The amount may be subjected to charges and deductions.

When you buy term insurance, you can opt for riders as add-on benefits to your base plan. You are required to pay additional premium for them. Here are the term insurance riders you can choose from:

Accidental Death Benefit Rider

The accidental death benefit rider provides financial coverage in case the insured passes away due to an accident when the term insurance policy is active. The pay-out received in this rider is an add-on to the death benefit you get with the base plan.For example, let’s suppose you buy a term insurance plan that offers a sum assured of Rs. 1 crore and an accidental death benefit rider of Rs. 40 lakhs. If you were to lose your life due to an accident, your nominee may receive Rs. 1.4 crores. However, in case of your demise due to any other reason covered by the plan, the accidental death benefit rider pay-out will not be applicable.

Accidental Permanent Total/Partial Disability rider

An accidental permanent disability, whether a total or partial one, may lead to a loss of livelihood for the policyholder as they may find it difficult to work as usual.Having an accidental permanent total/partial disability rider ensures the policyholder is protected in such circumstances. The policyholder is only eligible for these pay-outs if the disability was caused due to an accident.

Critical Illness Rider

Being diagnosed with a critical illness can be a difficult experience to deal with, both mentally and financially.Having a critical illness insurance rider provides financial coverage in the event of a diagnosis of any of the covered illnesses. These riders are commonly included in most term insurance policies. They typically cover conditions such as heart disease, kidney ailments, liver disease, and others.

Waiver of Premium Benefit Rider

This waiver of premium rider provides peace of mind by waiving all future premiums, subject to rider terms & conditions, if you are unable to pay them due to a critical illness diagnosis or accidental permanent disability. With this rider, you can rest assured that your insurance plan will continue to provide coverage even in the face of unexpected hardships.

Family Income Benefit Rider

Life can be unpredictable. A critical illness diagnosis, accidental disability, or even the demise of the individual may interrupt or permanently stop your income. In such situations, a family income benefit rider is useful. This rider can provide financial security for your family during tough times. It pays out a percentage of the sum assured monthly for a set period, so your family can maintain their lifestyle and meet their expenses.

Term plans may help you secure your family’s financial future to a great extent. Here’s how.
●Financial help for children’s education – One of the most important dreams you may have would be of providing the necessary education to your child/children. When you are no longer there, the term insurance policy pay-out may help in ensuring that your dream carries on.
●Financial support for your family’s lifestyle – Your family should not have to compromise on their quality of life when you may no longer be with them. With the right sum assured from a term life insurance plan, your family may be able to maintain a good quality of life.
●Help with outstanding debts – A term insurance plan may help your family deal with liabilities after you may have passed away. This may help them retain vital assets such as their home, car, or even family jewellery.
●Encouragement to follow dreams – When your family knows a term plan backup is there to support them, they may feel encouraged to follow their dreams.
Thus, a term insurance plan may secure your family’s financial future in ways more than one.

Ideally, the correct tenure of your plan should provide coverage till your retirement years. You may want a sufficient term to cover you till you have dependents or liabilities. Choose a sufficient tenure to avoid purchasing a term plan again in the later years.

The term insurance premium you may have to pay is based on multiple factors, such as:

Age:

As people age, their immune systems may weaken. They may become more vulnerable to illnesses, such as diabetes, blood pressure, heart attacks, etc. As a result, their mortality risk or the likelihood of their passing away due to medical reasons may increase. An increased mortality risk may lead to a rise in the term insurance premium rates as well.

Gender:

Women may tend to live longer than men[2].The mortality risk for women, thus, tends to be lower than that of men. Hence, female policyholders may incur a lower premium when they buy an offline or online term life insurance plan.

Medical History:

The medical history of the policyholder may be an indicator of any ailments they may face in the future. Hence, their medical conditions and that of close family members with whom they may have a genetic connection may be considered. If there is a risk of a life-threatening illness, the term insurance premium may be hiked accordingly.

Current Health Conditions:

Along with your medical history, your current medical conditions may also be considered when calculating the term insurance premium. If you are presently diagnosed with any health conditions, your term insurance premium may rise.

Smoking and Drinking Alcohol:

Smoking has been attributed as the cause of multiple diseases, including oral and lung cancer [3]. Heavy alcohol consumption can have harmful effects on the kidney, the liver, the digestive system, and even the brain [4]. Hence, smoking or drinking alcohol regularly may negatively affect your term life insurance premiums.

Profession:

Your term insurance premium may be high if you are employed in an occupation that may be risky to your health and/ or your life. This may include jobs at oil refineries or chemical factories, or even professions such as pilots, firefighters, stuntmen, and so on.

Duration of the Policy:

The duration of the policy refers to the policy tenure. If you are seeking term insurance coverage for a long time, you may incur a higher premium. This is because the insurer has agreed to cover you for a sustained period.

Lifestyle Habits:

If you live an active lifestyle where exercise and good nutrition take priority, you may find yourself paying a lower premium when you buy term insurance. Just keep in mind that if you practise skydiving, mountain climbing, or other risky adventurous activities, it may affect your term insurance premium.

There are several types of term plans you can choose from to protect your loved ones financially. Here are some factors you need to consider when you buy one.

The Amount of Coverage

The coverage you choose can be the alternative source of income your loved ones will count on in your absence. Take the needs of your family and any liabilities you may have into consideration while determining your coverage amount.

The Policy Tenure

Choosing the appropriate duration of your term insurance policy is essential when you buy one. When you buy term insurance, choose a tenure covering you for an adequate amount of time. At an early age, you can get a term plan for sufficient years at an affordable premium.

The Cost of Coverage

Once you have an estimate of the coverage you need and the duration you require it for, you will find the premium amount required to get the desired coverage. Choose a premium amount and frequency you can comfortably pay in the long haul.

Claim Settlement Ratio

When selecting a life insurance company to purchase a term insurance plan, you should consider checking their claim settlement ratio. A claim settlement ratio is the number of death related claims an insurance company has settled in a year out of the number of death related claims they have received. It is denoted in the form of a percentage. The claim settlement ratio of Bajaj Allianz Life Insurance Company is 99.04% for the financial year 2022-23~.

Check the Solvency Ratio

The solvency ratio reflects the financial strength of the company. It indicates the capability of the life insurance provider to settle all the claims they may receive. The higher the solvency ratio of your insurance provider, the better their financial ability to settle the claims they may receive. The Insurance Regulatory and Development Authority of India (IRDAI) has made it mandatory for life insurance companies to have a solvency ratio of at least 150%. The solvency ratio of Bajaj Allianz Life Insurance Company is 516% as of 31st March 2023^.

Choose from Several Add-On Riders

You can choose the riders of your choice when you buy a term insurance plan. These add-on riders are additional benefits for which you are required to pay an extra premium. Select riders that offer coverage against specific life uncertainties that you may worry about.

The preferred time to buy a term insurance plan may be ‘as soon as possible.’ The reason being when you purchase one at a young age, you can get your desired sum assured at an affordable premium. As you age, the tendency of being diagnosed with lifestyle diseases may increase, directly increasing your premium amount. Hence, it is preferred to buy term insurance at a young age. You may likely save on your premiums in the long haul when you buy a term plan early.

When you buy a term life policy, you are required to submit a set of documents. These include:

Proof of Age

An official document with information reflecting your date of birth like driving license, passport, Aadhaar card, school/college certificate, etc.

Proof of Address

An official document confirming your residential address like a ration card, electricity bill, gas bill, Passport, Aadhar Card, etc.

Photo Identity Proof

Any official document containing your photograph like, Aadhaar card, driving license, etc. may be accepted.

Photograph

Your passport-size photographs for the application

Proof of Income

Documents confirming your earnings. These often include income tax returns, employer’s certificates, or Form 16.

Medical Reports

The insurance company may ask for a medical report/s as per your prevailing health.

Other Mandatory Documents

PAN Card or Form 60 is required.

Just as there are multiple premium payment options, there are different term insurance pay-out options as well, such as:

1.One-Time Lump-Sum Pay-out

Term insurance plans with this type of pay-out option allow the policy beneficiaries to receive the sum assured in lump-sum if the life assured passes away. Once the death benefit pay-out is made to the beneficiaries, the insurance contract ends between the insurer and the policyholder.

2.One-Time Lump-Sum Payment with Fixed Monthly Pay-outs

In these kinds of term plans, when the life assured passes away, a fixed amount is paid out to the nominees. Additionally, a part of the death benefit is also paid out monthly for a certain fixed period, such as for the next 5 years or 10 years, after the life assured’s demise. The policyholder may decide the monthly pay-out period when they purchase the term plan.

3.One-Time Lump-Sum Payment with Increasing Monthly Pay-outs

With an increasing monthly pay-outs feature, the beneficiaries of the term insurance policy receive a pay-out monthly, with the amounts increasing each year. The rate of increase may be laid down in the policy wordings. The increasing monthly pay-outs are an addition to the lump sum death benefit received right after the life assured passes away. The premium of the term plan may change based on the kind of pay-out features you opt for.

    The term insurance claim settlement process can be divided into the following steps:

  • Intimation of the Claim
  • Submission of Required Documents
  • Verification of the Documents
  • Settlement of the Claim

Are you planning to buy term insurance but are confused with the technical terms you may have come across? Here is a brief guide to common term insurance terminologies:

1.Coverage

The coverage of a term life insurance plan refers to the situations and events monetarily covered by the term insurance contract. The coverage of a policy is subject to the terms and conditions mentioned in the term insurance plan.

2.Insurability

The extent to which an individual is considered acceptable for a term life insurance policy is called insurability.

3.Maturity Date

A term insurance plan is usually valid for a particular period. This period may be for five years, 10 years, 25 years, etc. or even beyond. The policy period can be selected by the policyholder as per his/her suitability. The date on which the policy coverage is expected to end is referred to as the maturity date.

4.Nominee

The person the policyholder appoints to receive the term life insurance pay-out in case of life assured’s demise, is referred to as the nominee.

5.Premium

When you buy a term insurance plan and receive coverage under it, you are expected to pay a pre-fixed amount to the insurance company in return for the same. This amount is called the term insurance premium.

6.Premium Payment Term (PPT)

It is the period for which the policyholder is expected to pay premiums for the plan. In most cases, the term insurance premium payment term is equal to the entire tenure of the plan.

7.Return of Premium (ROP)

It is a feature wherein the policyholder may receive the sum of all the premiums paid to date if the life assured survives the term insurance policy maturity date. This feature may not apply to all term insurance policies and may have to be opted for by the policyholder explicitly.

8.Free-Look Period

It is a feature applicable to newly issued insurance plans. The free look period is valid for a 15 days from the date of receipt of policy document and 30 days in case of electronic policies or policies obtained through distance mode to review the terms and conditions of the policy7. Within this period, the policyholder may return the policy if they are not satisfied with it.

9.Grace Period

If you were unable to pay the term insurance premium on time, the insurance company provides you with a limited extended timeframe thereafter to pay it. This timeframe is called the grace period.

10.Surrender Value

It refers to the amount the policyholder may receive if they surrender the policy before the tenure ends.

11.Claim Settlement Ratio (CSR)

It is the percentage of individual death claims an insurance company settles out of the total death claims made on it in a given period.

12.Add-On Benefits or Riders

These are additional coverage points you can add to your term insurance plan by paying a nominal extra premium. Common riders available with term insurance plans include critical illness rider, waiver of premium rider, family income benefit rider, and so on.

13.Sum Assured

It is the amount the policy nominees receive if the insured passes away under the conditions mentioned in the plan. When you buy an offline or online term insurance plan, choose a sum assured that offers adequate protection while being within budget.

14.Death Benefit

It is the amount the nominees of the policy receive if the life assured passes away while being covered by the term plan.

15.Insured

The person for whom the term insurance plan offers life cover is referred to as the insured person. If any covered event occurs with the insured, a claim may be raised, and the compensation may be paid out. In a term insurance plan, this person is usually called the life insured.

16.Maturity Claim

If the life insured survives the maturity date for term insurance plans that offer maturity benefits, they may raise a maturity claim. If the claim is approved, the benefit is paid out to the policyholder, minus the applicable charges and deductions.

Term Insurance Plans by Bajaj Allianz Life

Why Choose Bajaj Allianz Life for Your Term Insurance?

The suitable term life insurance plan may offer you apt coverage and peace of mind only when it is provided by the right insurance company. 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.

1

A High Claim Settlement Ratio


The claim settlement ratio is calculated after considering the number of death claims an insurance company has settled as compared to the number of death claims they receive. A high claim settlement ratio indicates the insurance company’s ability to pay the sum assured to your nominee. Bajaj Allianz Life Insurance Company has a high claim settlement ratio of 99.04%~ for the financial year 2022-23...Read Less

2

A Vast Network of Branches


Our online platform is incredibly easy to use and quite accessible. However, we understand that some people prefer the traditional, offline approach. With over 511 branches (as on 31 March, 2023) spread across the country, we are committed to providing an accessible and convenient experience to all our customers. So, whether you are tech-savvy or prefer in-person assistance, we have you covered. ..Read Less

3

A Comprehensive Product Suite

There are several kinds of term insurance plans Bajaj Allianz Life Insurance offers. Term insurance coverage can be availed in different variants, such as return of premium plans, joint life plans, increasing or decreasing plans, and so on.

And, with additional benefits in the form of riders, we aim to meet all your term insurance needs.

And, with additional benefits in the form of riders, we aim to meet all your term insurance needs...Read Less

4

Prompt Claim Settlement


When your family is grieving, the last thing they may want is a time-consuming term insurance claim settlement process. Hence, we believe in prompt claim settlement. We offer easy and quick claim settlement, with eligible claims being settled with 1-day claim approval% on certain eligible policies...Read Less

5

Multiple Customisations


One policyholder’s needs may differ from that of the other. One may want basic term insurance coverage while another may look for a comprehensive term insurance plan tailored to their needs. With a variety of features and riders available, our policyholders may customise their term insurance plans as per their suitability...Read Less

6

Increasing Death Benefit

With our increasing death benefit term insurance plan, the death benefit amount may increase gradually over a period. Rather than purchasing an additional policy to meet the rising costs of living, it may be better to opt for an increasing term insurance plan

7

Critical Illness Benefit


Unfortunate times may come in different forms. It may not only be limited to one’s demise. Being diagnosed with a critical illness can be an unfortunate event that takes away one’s ability to support themselves and their family. With the critical illness benefit, you may rest assured that your family’s financial standing does not take a hit if such any of the covered illness occurs. ..Read Less

8

Accidental Death and Disability Benefits

An accident may cause more than emotional trauma and physical injuries. It may cause financial hardships as well. While some accidents may lead to the victim passing away, others may cause total or partial disabilities.

The accidental death and disability benefits provided under a term plan may help you cope with these things in a better manner. These riders may provide financial pay-outs if the life insured passes away or incurs disabilities due to an accident.

9

Maturity Benefits


With our term plans with return of premium feature, the premiums you pay for your term plan may be returned to you if you survive the policy’s maturity. This may be subject to standard deductions. ..Read Less

10

Cover for Your Spouse

We also offer joint life insurance policies where the primary life insured as well as their spouse receive term insurance coverage under one plan. Even when the primary life insured may pass away, the term insurance coverage of their spouse continues to be active. 

We also offer joint life insurance policies where the primary life insured as well as their spouse receive term insurance coverage under one plan. Even when the primary life insured may pass away, the term insurance coverage of their spouse continues to be active. We also offer joint life insurance policies where the primary life insured as well as their spouse receive term insurance coverage under one plan. Even when the primary life insured may pass away, the term insurance coverage of their spouse continues to be active. We also offer joint life insurance policies where the primary life insured as well as their spouse receive term insurance coverage under one plan. Even when the primary life insured may pass away, the term insurance coverage of their spouse continues to be active. We also offer joint life insurance policies where the primary life insured as well as their spouse receive term insurance coverage under one plan. Even when the primary life insured may pass away, the term insurance coverage of their spouse continues to be active. We also offer joint life insurance policies where the primary life insured as well as their spouse receive term insurance coverage under one plan. Even when the primary life insured may pass away, the term insurance coverage of their spouse continues to be active. ..Read Less

11

Waiver of Premium Benefits


Your term insurance coverage should not end if an unforeseen event, such as the diagnosis of a critical illness or an accident, takes away your earning capacity. In such a situation, you may not be able to pay the term insurance premium. With the waiver of premium rider from Bajaj Allianz Life Insurance, your pending term insurance plan premiums can be waived off for the rest of the tenure in case of such an event.

With the waiver of premium rider from Bajaj Allianz Life Insurance, your pending term insurance plan premiums can be waived off for the rest of the tenure in case of such an event...Read Less

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Frequently Asked Questions on Term Insurance

1.Which term insurance policy should I buy?

It's important to carefully evaluate your financial obligations and the needs of your dependents in the event of your death to determine the appropriate policy, amount of coverage and term length for your policy. You may want to consider consulting with a licensed insurance agent or financial advisor to assist you in selecting the most suitable term insurance policy for your individual situation.

2.What are the benefits of buying a term insurance plan online?

There are several benefits to buying a term insurance plan online, including convenience, lower premiums, comparing options etc..

3.What kind of deaths are covered in term plan?

The type of deaths covered in a term insurance plan will depend on the specific policy and its terms and conditions. However, term insurance plans usually cover death due to natural causes, such as illness or disease, as well as accidental death.

4.Why should I buy a term insurance?

There are several reasons why you should consider buying a term insurance policy, including financial protection, affordability, flexibility, tax benefits and peace of mind.

5.What is the minimum & maximum age for a term insurance policy?

The minimum and maximum age for a term insurance policy will depend on the specific policy and insurance company. However, in general, the minimum age for purchasing a term insurance policy is typically 18 to 60 years, whereas some insurers may also offer a policy till age at entry of 65 years. 

6.Who pays the term insurance premium in a term plan?

The policyholder is required to pay the premium for a term insurance plan. A policyholder is an individual who gets life cover or buys life cover for self or another person in return of the premium

7.Who should opt for a Rs 1 crore term insurance plan?

You may want to choose a Rs 1 crore term insurance plan if you think your family’s needs and liabilities requires the amount.

8.Is it worth to buy a critical illness benefit rider along with term insurance plans?

Yes, a critical illness benefit rider may be worth your money. The treatment of critical illness may be expensive, and the diagnosis may affect your earning capacity as well. A term plan may ensure that in case of any diagnosis of covered critical illness, you have financial cover to rely on. 

9.Are there any tax savings offered by term insurance plans?

Yes, term insurance plans can help you save tax every year, thanks to 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 under old tax regime, subject to the conditions specified therein.[1] Also, the pay-out your nominee may receive in your absence is tax exempt as per the provision of Section 10(10D) of the Income Tax Act, 1961[1].

10.How much does a term life policy cost?

The exact cost of your term insurance depends on several factors, such as your age, occupation, coverage amount, and policy tenure. You can use a term insurance calculator to get an estimate of the premium you have to pay for your desired plan. 

11.Do I have to pay an additional premium for a Term Insurance Return of Premium (TROP) plan?

A Term Insurance with Return of Premium (TROP) plan offers maturity benefits to the policyholder, unlike regular term plans. Hence, their premium may be comparatively higher than a term life insurance policy without maturity benefits.

12.Is Term Insurance with Return of Premium (TROP) worth buying?

A Term Insurance with Return of Premium (TROP) is a type of term insurance plan offering benefits when the plan matures. The maturity benefit is applicable if you outlive the policy term. Your insurance provider will give you back all the premiums you paid. It may be worthy for individuals looking for a term plan with maturity benefits.

13.Do I get my money back if I surrender my term insurance with Return of Premium (TROP)?

While you would not receive any benefit on maturity if policy is surrendered (since it gets terminated immediately), on surrender of the policy, a surrender benefit will be paid to  you.

If the customer does not surrender and continues the policy till maturity, and if the policy has acquired surrender value, reduced paid-up maturity benefit shall be payable to the customer on survival till maturity. 

14.Can I opt for the return of premium for an existing term plan?

No. When you buy term insurance, you choose the type you want to purchase. If you have bought a regular term plan, you cannot convert it into a return of premium. These are both different types of products and may have different premiums, structures, and terms and conditions.

 

15.What affects your term insurance premium?

Your life insurance premium may be affected by your:

●      Age

●      Gender

●      Occupation

●      Current health conditions

●      Individual medical history

●      Family’s medical history

●      Desired amount of coverage

●      Choice of additional features or riders, etc.

16.How long should my term life insurance coverage last?

The ideal tenure varies from person to person, but simply put, the longer the tenure, the better. You may want sufficient coverage until you retire, and with no dependents or liabilities to worry about. Buying a term plan with less tenure will have lower premiums. But, after a few years, you may have to buy a new policy again and the premium may be higher based on your increased age along with other factors.

17.Which types of death are not covered by life insurance?

The exact list of exclusions may vary from one insurance provider to another. The following types of death are generally excluded by most life insurance plans-

●      Death by suicide within one year of purchasing the policy

●      Death because of the life assured committing any breach of law with criminal intent

●      Death because of self-inflicted injuries

Other than the exclusions mentioned above, you may want to read your term policy papers for further clarity.

 

18.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 and new life insurance policies cover deaths due to it.

19.How much life insurance should you carry?

The life cover you choose depends upon several factors like your earnings, your dependents, your liabilities, and other aspects of financial planning. You can use a term insurance calculator to get an estimate of the coverage you need.

 

20.What is the time limit for an insurer to settle claim for a term plan policy?

The claim process begins as soon as the insurance company is notified, and the required documents are submitted. Life insurance companies must pay out the claims within 30 days of receipt of the claims. It’s a mandate set by the Insurance Regulatory and Development Authority of India (IRDAI) (except for cases where further investigation is required)[6]. In case of further investigation, the insurer has to complete the investigation in 90 days from the date of receipt of claim intimation and the claim needs to be settled within 30 days thereafter[6].

 

21.Who is eligible to claim a tax benefit on term insurance premium?

It is the policyholder who is eligible for the term insurance tax benefits since they have paid the premium. 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 under old tax regime, subject to provisions stated therein. [1]

22.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 mode of policy purchase. During this period, you can cancel your term life insurance without any penalty or fines. If you cancel your plan during the free-look period, the premium you paid will be refunded to you. The refund amount is calculated after deducting the premium for the period covered before cancellation and any other charges that may be applicable. After the free-look period, your term insurance policy lapses if you stop paying the premiums

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Disclaimers

The views stated in this article are not to be construed as investment advice and readers are suggested to seek independent financial advice before making any investment decisions. For more details on risk factors, terms and conditions please read the sales brochure & policy document (available on www.bajajallianzlife.com) carefully before concluding a sale. Bajaj Allianz Life Insurance Company Ltd., Regd. office Address: Bajaj Allianz House, Airport Road, Yerawada, Pune - 411006, Reg. No.: 116, CIN: U66010PN2001PLC015959, Call us on toll free No.: 1800 209 7272, Mail us: customercare@bajajallianz.co.in.

 

Tax benefits as per prevailing Income tax laws shall apply. Please check with your tax consultant for eligibility.

 

~ Individual death claim settlement ratio FY- 2022-2023

%96.31% of non-investigative individual claims approved in one working day for FY 2022-23. 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.

^Solvency ratio 516% as at 31 March 2022 against IRDAI mandated 150%