Term Insurance

The right time to buy a term insurance plan is as soon as you can. The chances of getting lifestyle diseases increase as you age, and so do insurance costs. When you invest in a term plan at a young age, you get an insurance policy at an affordable premium. Hence, it may be advised to invest in term life insurance when you are young. This will save a lot of money in the long run. Moreover, it will also provide you and your loved ones with extended coverage and financial security from an early age.

Life insurance plans including Term Life insurance cover death caused due to health issues. This stands true for death caused due to Coronavirus as well. If an unfortunate event occurs with a person who has purchased ICICI Pru iProtect smart policy due to COVID-19, his/her nominee will be paid the sum assured.

If your main purpose is to financially protect your family like your partner, children or parents in your absence, then you could opt for a Term Insurance Plan. Term Insurance plans give you adequate life insurance cover at a much lower cost. However, if you are looking for insurance as well as savings returns, then you may go for traditional life insurance policies like endowment plans or ULIPs.

To ensure the protection of your family, you must pick an optimal policy duration of your term plan. Several aspects need to be looked at while selecting a term. You can start with your age. The younger you are, the longer the period you need protection for and vice versa. Your gender plays a crucial role here, as women generally live longer than men⁴. Similarly, your lifestyle habits, the ages of your dependents, and other aspects also decide the length of your policy term.

As a thumb rule, you should opt for a policy term depending on your retirement age. By then you would have paid off all your liabilities. However, in case you have some loans or liabilities, which will continue even after your retirement, you may choose your policy term accordingly.
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
OR
Your Expected Age to attain Zero Liability – Your Current Age²

Yes, senior citizens below 65^{*^} years of age can buy term insurance in case they want to financially secure the future of their spouse or dependent family. However, it is always advisable to buy a term insurance at a young age as the premiums tend to increase with age.

Yes, term insurance is one of the greatest assets you can create to safeguard the future financial interests of your family members. It can help you leave behind a legacy for your loved ones and help them carry on with their lives and fulfil their goals in your absence.

The age limit varies based on the particular plan you choose. The minimum age is 18 years and the maximum age is 60 years to buy ICICI Pru iProtect Smart, our best-selling Term Plan^~~.

The premiums for an existing term insurance plan do not increase every year. The plan you purchase today will have the same premiums a few years from now as long as your policy is active and unchanged. The premiums will only alter if you purchase a new plan altogether. Your premium may also rise if you increase your life cover^@ or enhance the coverage of your policy with additional add-on benefits.

A Term Plan's objective is to replace your income and provide financial support to your family in your absence. Therefore, you need a Term Plan as long as you work and earn an income, and your family remains financially dependent on you.

Thus, in your 50s or 60s, if you are responsible for your children's/grandchildren's education and upbringing, spouse who is financially dependent on you, or a differently abled relative's living costs, a Term Plan can be helpful for you. It will cover your loved ones' expenses in case of an eventuality. Hence, you need to assess your family's financial needs to decide until what age you want to keep your term insurance cover active.

Yes, you can buy multiple term insurance plans to enhance your family’s overall financial protection, provided you’re financially eligible for the total sum assured of all the polices.

When it comes to claiming settlement for the sum assured in a term life insurance plan, the following deaths are considered valid by an insurance company:

• Natural death caused by factors, such as age or a medical condition
• Death due to a critical illness⁶ such as cancer, stroke, and other
• Death due to an accident is also covered. Some plans also offer additional payouts to the nominee in the event of accidental death⁵
• Death due to a natural calamity like an earthquake, flood, hurricane, tsunami, and others is also covered under the plan
• Death due to suicide is covered in a term insurance plan. If the Life Assured commits suicide within 12 months, the nominee or beneficiary shall be entitled to 80% of the total premiums paid till the death provided the policy is in force

The following death is not included in a term insurance plan:

• Death in a homicide that involves the nominee is not covered under a term insurance plan. In such cases, a proper investigation will be conducted

It is important to know these aspects before purchasing a plan. You can also read the policy document to be sure of which kinds of deaths are not included in your term insurance.

Yes, Term Insurance premiums are allowed as a deduction subject to conditions prescribed under Section 80C of the Income Tax Act 1961. You can claim upto ₹ 1.5 lakh deduction for term insurance premiums paid over the year.

We suggest, your term insurance cover should be about 10-12 times your annual income. For e.g.: if you are earning ₹ 7.5 lakh per annum, you must secure yourself with a cover of about ₹ 75 lakh.

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^$$

Before you buy a Term Plan, you should look into the insurance provider's credibility and claim settlement history. Choose an insurer with a consistent Claim Settlement Ratio (CSR) over 95% and a high Claim Paying Ability Rating. ICICI Prudential Life's FY2024 CSR stands at 99.17%^~. We have consistently received iAAA claim settlement capacity ranking from ICRA.

The next step is to find out the premium you have to pay. Decide the premium payment frequency and the duration of the cover. Also decide how you want your family to receive the claim payouts, as a lump sum or a regular income. At the end, pay the premium and get the coverage you want. You can buy the ICICI Pru iProtect Smart Term Plan online in three simple steps:

• Calculate the premium you need to pay for ₹ 1 crore life cover^@ using our online Term Insurance Premium Calculator. The calculator will help you determine the premium amount you will have to pay as per your chosen premium payment period and frequency (monthly, half-yearly, or yearly)
• Enter your personal and income details in the application form. Upload scanned copies of the relevant documents in our web portal
• Review the details you have entered, pay the premium online to get an attractive discount, and make your life cover^@ active

Limited Pay lets the customer pay off their entire premium in a limited period while enjoying the benefits of the plan for the entire policy term. This lets you free from the burden of paying premiums early on while keeping your family secured for a long period of time. While the premiums to be paid now are higher with Limited Pay, you can end up saving up to 65%^`` on total premiums paid over the course of the policy. This is a good option for people who don’t have many financial obligations currently and can manage to pay high premiums. However, if budget is a constraint, then you can go with the Regular Pay option where you pay throughout the policy term. You can choose to pay the premiums monthly, half-yearly or annually.