WHAT IS TERM LIFE INSURANCE?
Term insurance is a type of life insurance that provides coverage for a specific period of time or years. This type of life insurance provides financial protection to the nominee in case policyholder dies during the policy term. Term Insurance policies provide high life cover at lower premiums. For eg: Premium for ₹ 1 Cr Term Insurance cover could be as low as ₹ 490** p.m. These fixed premiums can be paid at once or at regular intervals for the entire policy term or for a limited period. Premium amount varies basis the type of the premium payment method opted by the buyer.
REASONS TO BUY TERM INSURANCE ONLINE
Who should buy a Term Insurance Policy?
Anyone with financial dependents should buy a Term Insurance Policy. This includes young professionals with dependent parents, married couples, parents, business people and self-employed, SIP investors, and in some cases, even retirees.
Life insurance premiums paid are deductible from taxable income under Section 80C and hence carry a double benefit for taxpayers – protection and tax-saving. The payment (maturity value) received under an insurance policy is also exempt subject to conditions under Section 10(10D) of the Income Tax Act, 1961^^. Term Insurance also has among the lowest premiums compared to the different types of insurance policies.
Hence, individuals who derive any of the three significant benefits associated with term insurance should consider buying such policies. The three significant benefits are – life protection, tax-saving and affordable premiums.
- Parents: Parents are generally the sole source of financial support for their children. The needs of children extend from school fees and living expenses to hefty university fees, later on in life. The unexpected demise of a parent can jeopardise their future and deprive children of life’s opportunities. Parents must ensure that this scenario does not come to pass, by taking out a term insurance policy. This policy will pay out a lump sum and/or income to satisfy their children’s expenses, in the event of the death of the parent(s).
- Newly-married: Roses, chocolates and movie tickets are great, but here’s a truly long-lasting gift for your spouse – term insurance. This gift will give your spouse more than momentary joy, and it will secure their future. Term Insurance assures the spouse of financial support in the case of the insured person’s death and should be purchased as soon as possible by married couples.
- Working Women: The women of today are on an equal footing with men, whether it be managing their finances or providing for their family. Today, a family is as dependent on the woman’s income as it is on the man’s. This dependency brings with it the need to financially secure your loved ones in case something happens to you. A Term Insurance plan assures that your parents/spouse/children are financially secured even in your absence. It ensures that your family does not have to compromise on their lifestyle and can continue with the goals you set for them. The term insurance cover amount also helps to take care of any outstanding liabilities like home loan, auto loan, education loan etc. Not only this, but some term insurance plans also come with the added benefit of a critical illness^ cover that provides a payout if you are diagnosed with a serious illness like breast or cervical cancer.
- Young Professionals: Young professionals are just starting their careers. Many of them are not yet married and have no financial dependents. However this is likely to change in the future as they get married or support their parents/relatives. Such individuals should buy term insurance now rather than wait. This is because once a policy is purchased, the premiums stay the same throughout an individual’s life. On the other hand waiting to buy term insurance in the future can force customers to pay higher premiums because term insurance premiums rise with age.
- Taxpayers: Term Insurance premiums paid are allowed as a deduction from taxable income under Section 80C of the Income Tax Act, 1961^^. The term insurance payouts on maturity are also exempt from tax subject to conditions under Section 10(10D). Hence taxpayers can use term insurance to reduce their tax burden significantly.
- Self Employed: As a self-employed person, you face many challenges. Unlike salaried individuals, you do not earn a fixed monthly income; you have an uneven source of income that depends on the ups and downs of the market. Plus, you may have also taken a business or personal loan from creditors, banks, or even your family and friends. Hence, buying a term insurance plan to secure your family becomes even more important for you. A term life insurance policy can ensure that your family remains financially secure even in your absence.
- SIP Investors: Investors in mutual fund SIPs invest a fixed amount every month in a mutual fund. The wealth creation in an SIP is driven by a stream of regular installments which compound over time. However, the untimely demise of the investor can stop the flow of installments. Term Insurance can protect the SIP by providing the nominees of the insured person with funds to continue the SIP.
- Retirees: Retired persons need to have term insurance if they have dependant spouses or families. Buying term life insurance can also be a way of leaving an inheritance for their families. This is because, Term Insurance is paid out to nominees on the death of the insured person. The payment of Term Insurance is also tax-free subject to conditions under Section 10(10D) of the Income Tax Act,1961^^.
Term Insurance - Benefits
- High Life Insurance Amount at affordable premiums: Term Insurance plans provide a large amount of life insurance cover at an affordable premium. This cover can compensate for several years of lost earnings
- Cover Against Critical Illnesses^: Along with providing life cover, a new-age term plan like ICICI Pru iProtect Smart also provides protection against critical illnesses. For a small additional premium, Critical Illness Cover provides lump-sum payments when a critical illness like a heart attack, cancer, kidney failure etc. is first diagnosed
- Support In Case Of Disability##: In new-age Term Plans such as ICICI Pru iProtect Smart, the insurance company pays your future premiums in case of total and permanent disability. As a result, your life insurance cover continues even if you are unable to pay premiums
- Additional Security: To increase the security of your family, a Term Policy provides additional pay-out (up to `2 crores) in case of an accidental death+. For example, if your life cover is `1 crore, a Term Insurance Plan with Accident Cover pays `2 crores to your family in case of an accidental death+
- Tax Benefits: Term Insurance plans offer tax benefits^^ on premiums paid up to `46,800 under Section 80C. New-age Term Plans with critical illness cover also offer additional tax benefits on premiums paid up to `7800 under Section 80D. You also get tax benefits^^ subject to conditions under Section 10(10D) on the money that your family receives in case of an unfortunate event
Types of Term Plans
ICICI Pru iProtect Smart offers different term plan options to suit your different needs
Basic Term Plan
The basic term plan comes with a life cover that is paid in the form of a lump sum in case of death of the policy holder during the policy term. There is no maturity benefit in this plan.Buy Now
Term Insurance with Critical Illness cover
In addition to life cover, this term plan comes with a critical illness cover that is paid out in case the policyholder is diagnosed with any of the 34 specified critical illnesses like cancer, heart attack, etc.Buy Now
Term Insurance with Accidental Death Cover
A term plan that gives additional cover in case of death due to an accident.Buy Now
Term Insurance with Limited Pay
A term plan that lets you get done with all your premium payments in a few years while the plan benefits continues for the entire policy term.Buy Now
BUY TERM INSURANCE ONLINE IN 3 STEPS
How much Term Insurance Cover do you 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.
WHY DO YOU NEED TERM INSURANCE ?
Your family depends on you:
The term insurance money can be used to meet your family’s monthly expenses and important goals like your child’s education.
Your assets need protection:
You may take loans for assets like a house or a car. However, if something happens to you, your loved ones might be burdened with loan repayments. In such a situation, the term insurance payout which your family will receive can be utilised in paying off outstanding loans.
Modern day lifestyle problems can lead to a host of ailments. Some term insurance plans don’t just protect your family after death but also during your lifetime by offering critical illness ^ protection. This feature pays out on the diagnosis of certain critical ailments like cancer or heart attack.
How to choose the right Term Insurance Plan?
While buying a Term Plan, we always have questions like which Term Plan is best and how to compare the best Term Life Insurance Plan. Here are some parameters which may help you choose the best Term Plan for yourself:
- Claim Settlement Ratio: This ratio tells you how many claims for life insurance have been paid out as a proportion of claims made. The higher this ratio is, the betterFact: ICICI Pru Life has a claim settlement ratio~ of 97.8%.
- Solvency Ratio: Solvency ratio tells you whether the insurer you choose will be financially capable of settling your claim if the need arises. IRDAI mandates that every life insurer should maintain a solvency ratio of at least 1.5Fact: ICICI Pru Life has a solvency ratio$ of 2.15.
- Option to add Critical Illness Benefit^: A critical illness like cancer or brain surgery can cost a lot of money and cripple the family’s finances. Critical illness protects your family from this risk. It pays out immediately on diagnosis, and only medical documents confirming diagnosis are to be submitted3.Fact: Critical illness covers with Term Insurance plans are very popular. One in three of our customers also attach a critical illness cover to their Term Plan`.
- Option to add Accidental Death Benefit+: If you have opted for Accidental Death cover, your family will get additional pay out in case of death due to an accident, subject to a maximum of `2 crore.
- Waiver of Premium on Terminal Illness##: In case the person covered by the policy gets affected by terminal illness, his/her future premiums will need not to be paid.
If you have any queries regarding our Term Insurance Plan, Please give us a call on
Term Insurance - Reviews
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HOW LONG SHOULD BE THE TERM INSURANCE POLICY PERIOD?
The policy term offered by most life insurers ranges from 5 years to 40 years. One should always opt for a policy term depending on their retirement age. In India, 60 years is the general age of retirement. If you buy a Term Insurance Policy till 60 years, by that age all your financial liabilities and responsibilities will be cleared. Policyholders can opt for life cover for up to 99 years age if they have many dependents and would like to cover them for his/her complete life span.
What are the factors that can affect term insurance premiums?
The premium for a term insurance plan is calculated based on a number of factors. Various aspects of your health and lifestyle, such as your gender, age, habits, past or current medical ailments, hereditary diseases that are likely to affect you, etc. are considered before deciding upon a premium amount.
Here are some things that determine the value of your term insurance premium:
- Age: Your age plays an important role in your term insurance plan. Typically, the premium of a policy is lower for individuals who are young and increases as a person ages. This is because the younger you are, the fewer are the chances of you suffering from a disease that can result in an untimely demise, and the lower is the risk for the company. This is why financial experts often advice to purchase a term insurance plan as early in life as possible. The longer you wait, the more money you will have to pay out to secure your plan.
- Gender: Many scientific studies and researches have found that women tend to live longer than men. In fact, as per estimates, an average woman can live 5 years more than an average man4. This translates to five extra years of premiums too. As a result, women are charged lower premiums than men.
- Medical history: Your past health conditions or those of your family members are often analysed to determine the premium instalments of your policy. Ailments such as stroke, heart attack, kidney failure, cancer, etc. can be hereditary and be passed on to the next generation. If you or your loved ones, such as your parents or grandparents suffer from such diseases, the premium of the plan will be comparatively high.
- Current health conditions: Factors such as your weight, eating preferences, and overall fitness can affect your premium. If you suffer from hypertension, diabetes, fluctuating sugar, thyroid, etc. your premium will be more.
- Smoking and drinking: Smoking, drinking, and similar habits such as consuming tobacco or drugs can negatively impact your health. This further increases your chances of falling sick or suffering from a life-threatening medical condition. Hence, if you indulge in any of these things, you may be asked to pay a higher premium. On the other hand, if you follow a healthy way of life, your premiums will be comparatively less.
- Profession: Your profession can also have a pivotal place in your health. People with risky jobs such as pilots, sailors, soldiers, etc. are more susceptible to danger. They are also more likely to suffer from serious ailments because of the demanding nature of their careers. If your profession involves a high level of risk such as exposure to chemicals, environmental hazards, etc. you will be asked to pay a high premium too.
- Duration of the policy: A longer policy term usually has a higher death benefit too, which is why its premium is also more. Shorter terms generally offer a smaller death benefit and hence charge lower premiums. Your premiums will vary based on the total duration and benefit amount.
- Lifestyle habits: If you are inclined towards adventure sports like mountain climbing, sky diving, deep sea diving, etc. you could be asked for a higher premium. Since these activities put your life at risk, the premiums charged are also more.
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Term Insurance - FAQs
⭐ Are deaths due to Coronavirus covered by ICICI Pru Term Plan?
⭐ Should I buy a Term Plan or a traditional life insurance plan?
⭐ What is the policy term that I should select?
E.g.: If your current age is 30 and you expect to retire at the age of 60, you should opt for a term life cover for 30 years policy term.
Ideal Policy Term = Your Expected Retirement Age – Your Current Age1
Your Expected Age to attain Zero Liability – Your Current Age2
⭐ What is the age limit to buy a Term Plan?
⭐ Do term insurance plans offer tax benefits?
⭐ What kind of documents will I need to upload while purchasing a Term Insurance plan online?
⭐ How much cover should I take in a Term Plan?
Additionally, you may also consider the following liabilities if applicable:
I. Loans & Liabilities
II. Children’s’ Education Cost
A simple rule of thumb for calculating Sum Assured in a Term Insurance policy is -
Minimum Sum Assured = Annual Income x 10 times + Loans/Liabilities$$
⭐ Should you opt for Limited Pay or Regular Pay Term Insurance Plan?
⭐ Can I have multiple Term Insurance Policies?
⭐ Can I change the duration of life cover after the Term Insurance Policy is issued?
⭐ What happens to Term Life Insurance at the end of the term?
⭐ What kind of deaths are not covered in Term Insurance?
⭐ What happens if the nominee dies?
⭐ Do you get your money back at the end of the policy term on survival?
⭐ Can you cash out Term Insurance?
⭐ Why is the Term Insurance premium amount for smokers higher than that of a non-smoker?
⭐ What happens if you stop paying Term Insurance premiums?
⭐ What if I become an NRI after purchasing a Term Plan?
⭐ Is there any advantage of limited pay option in Term Insurance?
For instance, if you are 30 years old and bought a Term Plan with a policy term of 30 years. You may pay off your premium in the first 10 years itself. By then you would have turned 40 and you will not have to pay any premium anymore but you will be sufficiently covered till you are 60.
⭐ What is Terminal Illness in Term Insurance?
*Source: ICICI Prudential Life Annual Report FY2018-19
**Our Life insurance policies COVID-19 claims, subject to applicable terms and conditions of policy contract and extant regulatory framework.
***The premium for a 22 year-old healthy male for a life cover of ₹1 crore for the ICICI Pru iProtect Smart – Life Option under the regular income payout option for a policy term of 19 years is ₹ 7046 p.a (inclusive of all taxes).
#The Average Claims Turn Around Time (TAT) for FY2019 for Death Claim (Individual) is 2.34 days* The TAT is calculated for Non-investigated claims from the last document received to disbursal date
"The percentage saving computed is purely in terms of premium paid over the term (Difference between Limited Pay: 5 years and Regular pay) of the policy and does not account for time and other factors that may happen during this period. It is one of the many features that the product offers and you can opt for it based on your individual needs. The percentage saving is for ICICI Pru iProtect Smart - Life Option for `2 Crores life cover for a 20 year-old healthy male for a policy term of 61 years with regular income payout option. The monthly premium will be `1822. The premium amounts are inclusive of taxes, and an online discount is applied.
~~(Source: Company BuyOnline data - Dec 2015 till Mar 2020)
**The premium rate is of life option, regular pay and Income Payout option of ICICI PruiProtect Smart for 25-year-old healthy male for a policy term of 15 years and inclusive of tax. Yearly premium will be ₹ 7376. For a Life Cover of 1 Cr. You can choose to purchase other variants of the product as per your needs. For more details, please refer to the product brochure.
~Claim statistics are for Financial Year 2019-20 and is computed on individual basis claims settled over total individual claims for the financial year. For details, refer to Public Disclosures in our website.
^Critical Illness Benefit is optional and available under Life and Health and All in One option. This benefit is payable, on the first occurrence of any of the 34 illnesses covered. The CI Benefit, is accelerated and not an additional benefit which means the policy will continue with the Death Benefit reduced by the extent of the CI Benefit paid. The future premiums payable under the policy will reduce proportionately. If CI Benefit paid is equal to the Death Benefit, the policy will terminate on payment of the CI Benefit. To know more in detail about CI Benefit, terms & conditions governing it, kindly refer to the sales brochure. Critical Illness benefit is available till the age of 75.
+Accidental Death benefit is up to `2 Crores. Accidental Death Benefit is optional and available in Life Plus and All in One options. Accidental Death Benefit cover is available upto age 80.
++Nothing herein contained shall operate to destroy or impede the right of any creditor to be paid out of the proceeds of any policy of assurance, which may have been effected with intent to defraud creditors; unless taken otherwise with the intent to defraud creditors. In case of any third party claim in the Courts of India with regards the insurance proceeds, the amount shall be subject to the judiciary directions. Please seek professional legal advice for the applicability of this provision.
^^Tax benefits under the policy are subject to conditions under Section 80C, 80D, 10(10D) and other provisions of the Income Tax Act, 1961.Tax laws are subject to amendments made to it from time to time. Please consult your tax advisor for details, before acting on above.
## Refer the product brochure for the definitions, exclusions and other terms and conditions applicable for Permanent Disability due to accident and Terminal Illness.
`Based on the number of policies sold online between January 2016 - February 2017.
$As per IRDA Annual Report 2018-19.
3. Only the doctor’s certificate confirming diagnosis needs to be submitted. The benefit is payable only on the fulfillment of the definition of the diagnosed critical illness.
```The given premium is applicable for a 18 year old healthy male life with monthly mode of payment and premiums paid regularly for the policy term of 18 years with income payout option with Life Cover of ₹ 1 crore. Goods and Services tax and/or applicable cesses (if any) as per applicable rates will be charged extra.
``The percentage saving computed is purely in terms of premium paid over the term (Difference between 10 years Limited and Regular pay) of the policy and does not account for time & other factors that may happen during this period. It is one of the many features that the product offers and you can opt for it based on your individual needs. The percentage saving is for ICICI Pru iProtect Smart - Life Option for ₹ 50 Lakh life cover for a 20 year old healthy Male for a policy term of 65 years with lumpsum payout option. The annual premium for 10 years Limited pay option will be ₹ 29,866 & the annual premium for Regular Pay option will be ₹11,928. The total payable premium through the term of the policy for 10 years Limited pay option with annual premium will be ₹ 2,98,660 & for Regular pay option with annual premium will be ₹ 7,75,320. The premium amounts are inclusive of taxes. Calculation of 85 years is based on the existing life years, that is, 85 years of age minus your current age .
ICICI Pru iProtect Smart UIN 105N151V06.