What is Term Insurance?
Term Insurance is the simplest and purest form of life insurance. It provides financial protection to your family at the most affordable rates. With term insurance, you can get a large amount of life cover^ (i.e. sum assured) at a relatively low premium rate. The benefit amount is paid out to the nominee in case of the death of the person insured during the term of the policy.
COMP/DOC/May/2020/85/3608
Our Top Selling Term Plan1
Life cover^ with a range of optional benefits to give complete protection to you and your family.
- Life cover^ at affordable rates
- Lump sum payout on the first diagnosis of any of the 34 Critical Illnesses (optional)2
- Accidental Death Benefit up to ₹ 2 Crore (optional)3
- In-built Terminal Illness Cover - you get the full sum assured if you are diagnosed with a terminal illness4
- In-built Premium Waiver on permanent disability9 due to an accident
- Tax benefits5 up to ₹ 54,600/- under Sections 80C, 80D & 10(10D)
- Choice of 4 payout options - lump sum, regular income, increasing income and lump sum+regular income
- Life Cover^ till the age of 99 years
Why do you need Term Insurance?
Financial security for your family
If you are the primary earner, buying a term plan would take care of the monthly financial needs of your family in your absence.
Secure your Assets
You might have taken a loan like an education loan, home loan, personal loan, or vehicle loan. The repayment of these loans can financially weigh down your family in your absence. The proceeds from your term insurance plan pay off your loans and ensure that the financial burden does not fall upon your family.
Risks related to lifestyle:
The probability of developing a lifestyle disease increases with age#. Some term insurance plans offer critical illness protection which not only protects your family in case of uncertain eventualities but also during your lifetime. Critical illness2 benefit provides you financial security against various life-threatening health conditions such as cancer & heart attack.
Features of Term Insurance
When you understand the features of a term plan, you can have a clearer idea of the meaning and benefits of term insurance. Some of the hallmark features of term plans include the following:
Affordability
Term insurance policies are some of the most affordable life insurance products. The premiums you have to pay for term plans are usually much lower than other life insurance policies. You can get life cover^ up to ₹ 1 crore for a monthly premium as low as ₹ 378/-*.
Age of entry
With the minimum eligibility age of 18 years, you can get term plans early in life. Buying a term plan at a young age helps you get sizeable coverage at very reasonable premiums.
Policy Term
Term insurance provides coverage for a specified number of years, known as the policy term. In case of an unfortunate event during this period, your nominee will receive the sum assured in your policy.
Term insurance tenures can start from 5 years and extend up to your 99th birthday if you choose the whole life insurance option. Depending upon how long your loved ones might need your financial support, you can select the right policy term for your needs.
Maturity Benefit
Term insurance provides financial protection to your family in case of an eventuality. It is not meant to be used as an investment instrument. Thus, it does not offer any return on the premium you pay in the fortunate event that you survive the policy tenure.
However, the very absence of this investment component makes term plans so affordable. One of the unique features of term insurance is that your entire premium goes into securing your insurance cover. No part of it is deducted for investment purposes. Thus, you can get substantial coverage, enough to cover the current and future expenses of your loved ones at pocket-friendly premiums.
Also, you can opt for term insurance with a return of premium feature if you want some maturity benefits. After the policy matures, you will get back the entire premium you had paid throughout the policy tenure with such plans.
Flexibility in Premium Payments
You can pay your term plan premiums as per your convenience. Annual, semi-annual, quarterly, or monthly premiums are some of the premium payment frequencies you can choose. Such regular premium payments are ideal for salaried individuals with a stable income.
You can also go for a one-time, lump sum premium payment if you have some surplus funds lying unused. Alternatively, you can go for a limited pay option and pay off your premiums within the initial few policy years. Your life cover^ remains active for the entire term plan tenure.
Thus, if you are self-employed, with variable cash inflows, you can take advantage of such single pay or limited pay options and keep your loved ones financially protected against life’s uncertainties.
Life cover^
A term plan keeps your family secure from financial challenges if an unfortunate event occurs. It provides a life cover^ of your choice at affordable premiums. With this life cover^, your loved ones get an assured sum in case of an unwanted incident during the policy period. The payout can help your family avoid compromising with the lifestyle you want for them in your absence.
Additional add-ons
You can add riders or add-on benefits to your term insurance policy to extend the scope of your base coverage at a nominal cost.
Various types of riders are available with term plans, such as:
- Critical Illness7 Rider
- Accidental Death8 Cover
- Waiver of Premium Benefit in case of a permanent disability9
Increasing term insurance
Term plans allow you the flexibility to update your policy as per the changing financial needs of your life. You can increase the sum assured or add riders to your plan at your life’s key milestone events.
Thus, after marriage, or when you welcome your children into your family, and your financial liabilities increase, you can enhance your coverage. It enables you to provide your loved ones with the right financial backup against unforeseen situations.
Tax6 benefits
Term plans offer many tax6 benefits. Under Section 80C of the Income Tax Act, 1961, you can claim deductions up to ₹ 1.5 lakh on the premium you pay for your term plan. The payouts are also tax6-exempt under Section 10(10D). Moreover, with an add-on health-related rider, you can avail of tax6 benefits under Section 80D on the premium paid for the rider.
Premium waiver
This benefit waives off all your future premiums in the case of a disability9 caused by an accident. Hence, even if you fail to pay the premiums due to any income loss from a disability, you will still be able to keep your family’s future secure.
Get all these features and secure yourself and your family with ICICI Pru iProtect Smart, which ensures a safety net for your family in your absence.
How Term Insurance Works?
Term insurance offers a crucial safety net by providing a life cover^ to the policyholder. It provides a payout to the beneficiaries in the event of an untimely incident during the policy term.
The policyholder pays a premium to the insurance company, which can be made monthly, half yearly, yearly or as a single payment. When determining the sum assured and premium, term insurance companies consider several factors, including age, health history, lifestyle, profession and gender. These factors help them evaluate the degree of risk associated with insuring the policyholder. It also determines the cost of the coverage.
In the unfortunate event of the policyholder's death, the nominee is required to submit a claim form along with necessary documents, such as a death certificate, to the insurance company. Upon verification, the company disburses the sum assured according to the chosen method of payment, which may include a lump sum, regular income payments or a combination of both. This financial support can offer peace of mind and stability to the loved ones during a challenging time.
Things to know before buying a Term Insurance Plan
Who should buy Term Insurance plans?
Young Professionals
Term insurance is ideal for young professionals as it provides financial security during the early stages of their careers. It offers insurance payout that can help to pay back loans and other forms of debt while securing their parents and other dependents in case of an unfortunate event.
Newly Married
Term insurance is essential for newly married couples as it can safeguards their financial future. The insurance coverage^ can ensure stability and security in case of unforeseen events.
Working Women
Working women should consider term insurance as it provides financial independence and protection for their families in their absence. It offers insurance coverage^ that can safeguard the children, spouse and parents, enhancing overall financial security for the family.
Housewives
Housewives contribute significantly to the well-being of the family and their absence can take a toll on the family. Term insurance contributes to the financial stability of the entire family in the absence of the homemaker, ensuring their well-being and security.
Taxpayers
A term insurance plan in India aligns with the financial planning of all kinds of taxpayers, irrespective of their age, income or gender. The taxpayers can avail deductions of up to ₹ 1.5 lakh per annum for amount paid towards the premium of a life insurance policy subject to the conditions prescribed under Section 80C6 of The Income Tax Act, 1961. Additionally, the proceeds from the term insurance is exempt subject to the conditions prescribed under Section 10(10D)6 of The Income Tax Act, 1961.
Parents
Term insurance plays a crucial role in helping parents protect the financial interests of their children in their absence. It can cover expenses such as college education and healthcare, ensuring their children's well-being.
Self-Employed People
Term insurance creates a vital financial safety net for self-employed individuals. Since self-employed individuals may not have access to employer-sponsored insurance plans, purchasing their own policy can be critical for their financial security.
Non-Residents Indians (NRIs)
NRIs can purchase term insurance in India to protect their loved ones. Term insurance can offer NRIs additional financial protection and safeguard their loved ones financially. NRIs can also claim tax6 benefits on their term plans in India, which enhances their overall financial planning and security.
COMP/DOC/Apr/2024/24/5791
How much life cover^ do I need?
You can get a simple, quick and clear answer to this question by calculating your Human Life Value or HLV. HLV is an easy-to-use numeric method of calculating the amount of Life Cover^ that you may need. The basic thumb rule that can be used to find out your HLV is as follows:
Age In Years |
Income multiple |
|---|---|
18-35 |
25 times of your annual income |
36-45 |
20 times of your annual income |
46-50 |
15 times of your annual income |
51-60 |
10 times of your annual income |
For example, if a 32-year-old man has an annual income of 
5 lakh, the ideal Life Cover^ for him would be 25 x 5 lakh = 1.25 crore.
Human Life Value Calculator
We have made a simple, free online calculator to help you understand how much your life insurance cover should be to keep you and your family secure
✅ Who is eligible for term insurance?
Term insurance eligibility can differ for each plan and insurer. All insurance providers offer plans with unique terms and conditions. However, as per the general norms, the minimum age limit for buying a term insurance plan is 18 years. Likewise, the maximum age limit for buying a term insurance plan is 65 years. So, make sure that you fall under this age group if you wish to buy a term plan.
✅ What are the factors that affect the Term Insurance premium?
The insurance company considers a lot of factors before deciding your premium. The main ones are - age, gender, personal and family’s medical history, geographical location, occupation, BMI index, and lifestyle.
✅ What is a term insurance rider?
“Riders” are add-on benefits or amendments attached to your basic term insurance plan. These can be purchased at a nominal rate. They allow the policyholder to customise the plan according to their needs. ICICI Prudential offers these riders - Waiver of Premium, Critical Illness7, Accident Death8, and Permanent9 or Partial Disability.
✅ What is a terminal illness benefit$?
Terminal Illness$ benefit pays out a lump sum amount to the policyholder if they are diagnosed with an end-stage illness and are expected to die within 12 months. This additional benefit provides cover for an unforeseen disease which is not curable.
✅ Does term insurance covers death outside India?
Yes, deaths outside India are covered in term insurance plans, provided the insurance company is informed about the accident well in time, along with the required details. However, the company may reject the claim if the death occurs due to travelling to unsafe countries. Talk to your policymaker for finer details.
✅ Can I buy term insurance for a spouse?
Yes, you can buy a term insurance plan for your spouse. In fact, joint term insurance plans are quite popular for the many benefits that they offer. These plans cover you and your spouse under a single policy. Buying a joint term plan for yourself and your spouse can be a simple, hassle-free, and cost-effective way to buy term insurance.
✅ Who is eligible for term insurance?
Term insurance eligibility can differ for each plan and insurer. All insurance providers offer plans with unique terms and conditions. However, as per the general norms, the minimum age limit for buying a term insurance plan is 18 years. Likewise, the maximum age limit for buying a term insurance plan is 65 years. So, make sure that you fall under this age group if you wish to buy a term plan.
✅ What are the factors that affect the Term Insurance premium?
The insurance company considers a lot of factors before deciding your premium. The main ones are - age, gender, personal and family’s medical history, geographical location, occupation, BMI index, and lifestyle.
✅ What is a term insurance rider?
“Riders” are add-on benefits or amendments attached to your basic term insurance plan. These can be purchased at a nominal rate. They allow the policyholder to customise the plan according to their needs. ICICI Prudential offers these riders - Waiver of Premium, Critical Illness7, Accident Death8, and Permanent9 or Partial Disability.
✅ What is a terminal illness benefit$?
Terminal Illness$ benefit pays out a lump sum amount to the policyholder if they are diagnosed with an end-stage illness and are expected to die within 12 months. This additional benefit provides cover for an unforeseen disease which is not curable.
✅ Does term insurance covers death outside India?
Yes, deaths outside India are covered in term insurance plans, provided the insurance company is informed about the accident well in time, along with the required details. However, the company may reject the claim if the death occurs due to travelling to unsafe countries. Talk to your policymaker for finer details.
✅ Can I buy term insurance for a spouse?
Yes, you can buy a term insurance plan for your spouse. In fact, joint term insurance plans are quite popular for the many benefits that they offer. These plans cover you and your spouse under a single policy. Buying a joint term plan for yourself and your spouse can be a simple, hassle-free, and cost-effective way to buy term insurance.
People like you also read ...
Up to 5%`= lifetime online discount
