Buy Best Term Insurance Plans & Policy Online In India 2024

Why Do You Need a Term Insurance Policy?

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.

How Does a Term Plan Work?

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 may be 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.

What is a Term Insurance Calculator

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.

Features of Term Insurance

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.

Benefits of Buying Term Insurance

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.

How Does a Term Plan Secure the Financial Future of Your Family?

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.

How Long Should the Term Insurance Policy Period Be?

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.

What Are the Factors That Can Affect Term Insurance Premiums?

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.

When is the Preferred Time to Buy a Term Insurance Plan?

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.

How Much Term Insurance Coverage Do You Need?

The right term insurance coverage depends on your financial needs. Assess your age, income, expenses, existing assets and liabilities, and number of dependents and then find out the suitable coverage amount⁸. You can also use the different methods of coverage calculation like the following –

Basic thumb rule⁸
– This rule states that you need coverage of at least 10-12 times your annual income
Financial need analysis⁸
– This is a more holistic approach which considers your assets, liabilities, incomes and expenses to find out the right coverage amount.
Human Life Value (HLV)⁸
– This method estimates the economic value of human life. It aims to calculate a sum assured which, in your absence, would give your family the income that they expect from you when it is invested in a risk-free avenue. For instance, say you provide an income of Rs. 30,000 every month to your family. This means that your family expects an income of Rs.3.6 lakhs every year. In your absence, they would lose this income. So, the sum assured should be such that when it is invested in a risk-free avenue, the interest earned can make up for the lost income. If the risk-free interest is assumed to be 6%, the sum assured would be Rs.60 lakhs which would yield Rs.3.6 lakhs at 6% p.a.
Underwriter’s thumb rule⁸
– This rule also uses a multiple of your annual income to determine the sum assured. However, the multiple depends on your age.

You can use either of these methods to find the right term insurance coverage amount. Alternatively, you can use the term insurance calculator available online and find the right sum assured for your financial needs.

Common Term Insurance Terminologies

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:

Term	Definition
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.
Insurability	The extent to which an individual is considered acceptable for a term life insurance policy is called insurability.
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.
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.
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.
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.
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.
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 policy. Within this period, the policyholder may return the policy if they are not satisfied with it.
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.
Surrender Value	It refers to the amount the policyholder may receive if they surrender the policy before the tenure ends.
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.
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.
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.
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.
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.
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 Claim Settlement Process

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

References:

https://cleartax.in/s/life-insurance-taxability
https://pubmed.ncbi.nlm.nih.gov/23331196/
https://nhm.gov.in/index1.php?lang=1&level=3&sublinkid=1122&lid=640#:~:text=What%20are%20health%20impacts%20of%20tobacco%20use%3F
https://www.metropolisindia.com/blog/preventive-healthcare/negative-effects-of-excessive-alcohol-use/
https://www.moneycontrol.com/news/business/personal-finance/budget-2023-tax-exemption-for-traditional-insurance-policies-9978941.html
https://irdai.gov.in/life3
https://irdai.gov.in/document-detail?documentId=385593
https://economictimes.indiatimes.com/wealth/insure/how-much-life-insurance-do-you-really-need/articleshow/22065416.cms?from=mdr

Term Insurance

Why Do You Need a Term Insurance Policy?

Protect Your Loved Ones financially

Be Easy On The Wallet

Helps in Protecting Your Family's Assets

Offers Add-ons/ Riders

Helps You Stay Prepared for Uncertainties

How Does a Term Plan Work?

Who Should Buy a Term Insurance Policy?

Parents:

Newly Married Couples:

Working Women:

Young Professionals:

Taxpayers:

Self-Employed Individuals:

Retirees:

Term Insurance Plans by Bajaj Allianz Life

What is a Term Insurance Calculator

Types of Term Insurance Plans

Standard Term Plans

Increasing Term Plans

Decreasing Term Plans

Term Insurance with Return of Premium Plans

Features of Term Insurance

Pure Life Cover:

Flexible Options to Pay Premiums:

Convenient Online Option:

Different Types of Coverage:

Easy to Buy:

Easy Premium Payment Options:

Flexible Pay-out Options:

Low Entry Age:

Benefits of Buying Term Insurance

Financial Protection for your Family

An optimum Life Cover at affordable Premiums

Long-Term Coverage

Tax Benefits

Protection Against Liabilities

Enhanced Benefits with Add-On Riders

Survival Benefits

What Are Term Insurance Riders?

Accidental Death Benefit Rider

Accidental Permanent Total/Partial Disability rider

Critical Illness Rider

Waiver of Premium Benefit Rider

Family Income Benefit Rider

How Does a Term Plan Secure the Financial Future of Your Family?

Financial help for children’s education

Financial support for your family’s lifestyle

Help with outstanding debts

Encouragement to follow dreams

How Long Should the Term Insurance Policy Period Be?

Age:

Gender:

Medical History:

Current Health Conditions:

Smoking and Drinking Alcohol:

Profession:

Duration of the Policy:

Lifestyle Habits:

How to Choose a Term Insurance Plan?

The Amount of Coverage

The Cost of Coverage

Claim Settlement Ratio

Check the Solvency Ratio

Choose from Several Add-On Riders

When is the Preferred Time to Buy a Term Insurance Plan?

How Much Term Insurance Coverage Do You Need?

Basic thumb rule8

Financial need analysis8

Human Life Value (HLV)8

Underwriter’s thumb rule8

Proof of Age

Proof of Address

Photo Identity Proof

Photograph

Proof of Income

Medical Reports

Other Mandatory Documents

What Are the Pay-out Options in Term Life Insurance?

Basic thumb rule⁸

Financial need analysis⁸

Human Life Value (HLV)⁸

Underwriter’s thumb rule⁸

Claim Settlement Ratio^~

Claim Approval^%

CARE Stable Rating^$

Assets Under Management (AUM)^**

Number of Lives Covered^#

Solvency Ratio^{^}