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Term Insurance

Term Insurance is a basic type of life insurance product that provides financial coverage to your loved ones for a specific period called policy term. In case of your untimely death within the policy term, the insurer pays a death benefit to your nominees listed under the plan. Read More

The core purpose of a term insurance plan is to provide financial assistance to your loved ones in your absence, that can help them manage their expenses, fulfill their life goals, repay debts, if any, in your absence. This financial cover is called as sum assured, in exchange for which, the policyholder has to pay a certain amount called premium to the insurer. 

For example, Mr.Sunil, who is 25 years old, buys a ₹1 Crore Term Insurance plan for a policy tenure of 30 years. He will be paying ₹546 per month in 1st year and ₹ 583 per month for the remaining policy tenure. If Mr. Sunil happens to die within the policy term, the nominee(s) listed under the plan will receive a sum assured of ₹1 Crore as financial assistance in his absence.^^ Read Less

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Written ByPalak Bagadia
AboutPalak Bagadia
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Palak Bagadia, Associate – Digital Marketing at Bajaj Allianz Life, with experience spanning content and performance marketing, recruitment, employee engagement in the BFSI industry.
Reviewed ByRituraj Singh
AboutRituraj Singh
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Rituraj Singh,With over 6.5 years of experience in the insurance industry, Rituraj Singh, Manager- Product & Brand Marketing at Bajaj Allianz Life Insurance overlooks new product launches, compliance, and brand projects, leveraging artificial intelligence and technology to enhance outcomes.

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.

Who Should Buy a Term Insurance Policy?

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

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.

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Newly Married Couples

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.

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Working Women

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.

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Young Professionals

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.

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Tax Payers

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.

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Self Employed Individuals

Self-Employed Individuals:

Being a self-employed individual may bring a different level of professional freedom. However, it may also lead to a bit of unpredictability due to the lack of financial security. As a self-employed person, you may buy a term insurance plan online or offline to make sure any present instability does not affect the future of your loved ones.

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Retirees

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.

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Term Insurance Plans by Bajaj Allianz Life

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.

Steps to Buy a Term Plan
Buying a term plan online is a matter of a few steps.The policy may be issued once this process is verified and complete. The issuance of the policy will depend on the underwriting guidelines of the insurance company.

Choose an appropriate plan as per your needs

Use the term insurance calculator to calculate your term insurance premium

Submit the documents as required

Pay for the plan using secure payment portals

Undergo a medical check-up, as required by the insurer

Types of Term Insurance Plans

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

Standard Term Plans

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.

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Increasing Term Plans

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.

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Decreasing Term Plans

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.

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Term Insurance with Return of Premium Plans

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.

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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.

What Are Term Insurance Riders?

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

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.

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Accidental Permanent Total/Partial Disability rider

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.

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Critical Illness Rider

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.

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Waiver of Premium Benefit Rider

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.

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Family Income Benefit Rider

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.

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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.

How to Choose a Term Insurance Plan?

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

Amount of Coverage

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.

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Cost of Coverage

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.

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Claim Settlement Ratio

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~.

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Check the Solvency Ratio

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^.

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Choose from Several Add-On Riders

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.

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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.

Documents Required To Buy Term Insurance

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

Proof of Age Proof of Age

Proof of Age

Proof of Address

Photo Identity Proof

Photograph

Proof of Income

Medical Reports

Other Mandatory Documents

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

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

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

Your passport-size photographs for the application

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

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

PAN Card or Form 60 is required.

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

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

One Time Lump Sum Payout

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.

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One Time Lump Sum Payment with Fixed Monthly Payouts

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.

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One-Time Lump Sum Payment with Increasing Monthly Payouts

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.

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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

Why Bajaj Allianz Life Insurance ?

Bajaj Allianz Life, one of India's leading Private Insurer, committed to offer value packed and innovative products to meet you Life Goals

99.23%

Claim Settlement Ratio~

1 Day

Claim Approval%

AAA

CARE Stable Rating$

₹1,09,829Cr

Assets Under Management (AUM)**

4.19 Cr

Number of Lives Covered#

432%

Solvency Ratio^

Disclaimer:~Individual Death Claim Settlement Ratio for FY 2023-2024, %96.70% of non-investigative individual claims approved in one working day for FY 2023-24. 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, $For details refer to press release published by CARE**All figures as on 31 March 2024, ^Solvency ratio 432% as at 31 March 2024 against IRDAI mandated 150%, #Individual Group.

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I have invested in various products of Bajaj Allianz Life Insurance - I am happy with the services, returns and diversified product portfolio.
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5
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I am a happy customer who is satisfied with the after sales service. I have full trust in Bajaj Allianz Life Insurance Company.
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I was introduced by my advisor to invest in Bajaj Allianz Life Insurance .I have invested in the same and am happy with the returns and services.
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I am a 7 year old customer of Bajaj Allianz Life Insurance and very happy about the services.
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References:

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

^^Above illustration is for Bajaj Allianz Life eTouch- A Non Linked, Non-Participating, Individual Life Insurance Term Plan (UIN: 116N172V03) considering Male aged 25 years | Non-Smoker | Policy Term (PT)– 30 years | Premium Payment Term (PPT) – 30 years | Sum Assured opted is Rs. 1,00,00,000 | Online Channel | Standard Life | 1st Year Premium is Rs. 546 / Month. 2nd Year onwards premium Rs. 583/ Month. Total Premium Paid is Rs. 2,03,430 | Medical Rates | Monthly Premium Payment Mode | Death benefit opted is lumpsum payout and monthly installments (Lumpsum Payout Percentage : 45, Income Payout Percentage : 55) | 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. This is exclusive of all the discounts mentioned above.

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

a Premium Holiday has to be selected at inception to avail this benefit and also depends on other policy terms & conditions

d 5% Discount applicable for customer's first individual life insurance policy, applicable only on first year’s premium, 5% Discount for salaried customers, applicable only on first year’s premium, 6% Discount on online purchase is available for regular premium payment and limited premium payment frequency, applicable only on first year’s premium.

e Above illustration is for Bajaj Allianz Life Smart Protection Goal - A Non Linked, Non Participating, Individual Life Insurance Term Plan (UIN: 116N174V03) considering Male aged 25 years | Non-Smoker | Standard Life | Policy term (PT)– 30 years | Premium Payment Term (PPT) – 30 years | Total Sum Assured opted is Rs. 1,00,00,000 | Total Premium - Rs. 2,08,143 (1st Year Premium is Rs- 6535/- and 2nd Year onwards Rs -6952/- )| Online Channel | This is exclusive of discount for salaried customers and for customer's first individual life insurance policy | medical rates | Yearly 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.

f Product feature/benefit mentioned above are dependent on optional benefit, if selected.

g HSAR – High Sum Assured Rebate is subject to policy terms and conditions

h Premium rate applicable to female life will be based on the premium rate of 3 years younger male

X
Terms & Conditions

I hereby authorize Bajaj Allianz Life Insurance Co. Ltd. to call me on the contact number made available by me on the website with a specific request to call back. I further declare that, irrespective of my contact number being registered on National Customer Preference Register (NCPR) or on National Do Not Call Registry (NDNC), any call made, SMS or WhatsApp sent in response to my request shall not be construed as an Unsolicited Commercial Communication even though the content of the call may be for the purposes of explaining various insurance products and services or solicitation and procurement of insurance business

 

Please refer to BALIC Privacy Policy

X
Disclaimer

%%Above illustration is for Bajaj Allianz Life eTouch- A Non Linked, Non-Participating, Individual Life Insurance Term Plan (UIN: 116N172V03) considering Male aged 25 years | Non-Smoker | Policy Term (PT)– 30 years | Premium Payment Term (PPT) – 30 years | Sum Assured opted is Rs. 1,00,00,000 | Online Channel | Standard Life | 1st Year Premium is Rs. 6,238. 2nd Year onwards premium is Rs. 6,659. Total Premium Paid is Rs. 1,99,349 | Medical Rates | Yearly Premium Payment Mode | Death benefit opted is lumpsum payout and monthly installments (Lumpsum Payout Percentage : 45, Income Payout Percentage : 55) | 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. This is inclusive of all the discounts mentioned above.

##Tax benefits as per prevailing Section 10(10D) and Section 80C of the Income Tax Act shall apply. You are requested to consult your tax consultant and obtain independent advice for eligibility before claiming any benefit under the policy.Above Tax benefit is calculated considering deduction of Rs. 150,000 and applicable tax rate of 31.20%.

@Term Insurance plan bought online directly from Bajaj Allianz Life Insurance has no commissions involved.

^^The Return of Premium amount is total of all the premiums received, exclusive of extra premium, rider premium and GST & /any other applicable tax levied, subject to changes in tax laws
Bajaj Allianz Life Insurance Co. Ltd. | IRDAI Reg. No. 116

X
Disclaimer

Bajaj Allianz Life eTouch- A Non Linked, Non-Participating, Individual Life Insurance Term Plan (UIN: 116N172V03)

*Tax benefits as per prevailing Section 10(10D) and Section 80C of the Income Tax Act shall apply. You are requested to consult your tax consultant and obtain independent advice for eligibility before claiming any benefit under the policy.

~Individual Death Claim Settlement Ratio for FY 2023-2024

1Premium Holiday has to be selected at inception to avail this benefit and also depends on other policy terms & conditions


Bajaj Allianz Life Insurance Co. Ltd. | IRDAI Reg. No. 116

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