WHAT IS TERM INSURANCE?
Term insurance is a type of life insurance that provides coverage for a specific period of time or years, i.e., a term. This type of life insurance provides a financial benefit to the nominee in case of the unfortunate demise of the insured during the policy term. A term insurance policy provide high life cover@ at lower premiums. For e.g.: Premium for ₹ 1 Crore Term Insurance cover could be as low as ₹ 485* 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 married couples, parents, business people and self-employed, SIP investors, young professionals with dependent parents, 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 amount (maturity value) received under a term insurance plan is also tax-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. An unfortunate event with 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 purchasing 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 any mishap of the parent(s).Newly-married couple:
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. A term insurance policy assures the spouse of financial support in case of a mishap with the insured person 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, and more. Not only this, but some term insurance plans also come with the added benefit of a critical illness^ rider 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 incease 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 (Systematic Investment Plan) invest a fixed amount every month in a mutual fund. The wealth creation in an SIP is driven by a stream of regular instalments which compound over time. However, an unfortunate event of the investor can stop the flow of instalments. 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, death benefit is paid out to nominees in case of any mishap with 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^^.
TERMS RELATED TO TERM INSURANCE PLANS
Here are some terms you must know:
Claim Settlement Ratio:
The Claim Settlement Ratio is the ratio of the total number of claims raised in a year and the number of claims settled in a year by an insurer. The higher the number, the more reliable the insurance company is, as the chances of your family’s claim being rejected are lowTerm insurance premium:
This is the money you pay to the insurance company in return for financial protection. Premiums can be made in monthly, half-yearly, and annual instalments. Premiums tend to increase as you ageAdd-on benefits (riders):
To enhance the coverage of your plan, you can add benefits to your plan, such as a critical illness rider, an accidental death rider, or a permanent disability rider. Riders come at a nominal cost over the premiumSum assured:
This is the amount of money that your nominee will receive in case of an unfortunate event. This also determines the premium amount for the term planDeath benefit:
This is the same as a sum assured and is given to the nominee in case of an unfortunate eventuality
FEATURES OF TERM INSURANCE POLICY
Here are some features of term insurance plans:
Low entry age:
Term insurance plans have a minimum entry age of 18 years only. You can buy a term plan and secure your loved ones as soon as you reach adulthoodLong term protection:
The term plan offers long policy tenures of up to 40 years that allow you to protect your family members for a long timeEasy to buy:
A term insurance plan can be purchased online in minimal steps. You can compare different plans and features with a few clicks and pick a plan that suits your needs the best. The submission of documents, premium payment, and all other customer queries can be submitted online from the comfort of your home or officeEasy premium payment options:
Term insurance plans offer flexible premium payment options like monthly, quarterly or yearly paymentAdjustable cover:
A term insurance plan is flexible and allows you to increase or decrease the sum assured basis your financial conditionLiability protection:
The sum assured of a term insurance plan can be used to ensure your family’s financial security and protect them from debt liabilities like a loan repayment
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 earningsCover 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 rider provides lump sum payments when a critical illness like a heart attack, cancer, kidney failure, or any other critical illness^ is first diagnosedSupport 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 premiumsAdditional Financial Security:
To increase the security of your family, a Term Policy provides additional payout (up to `2 crore) in case of an accidental death+. For example, if your life cover is `1 crore, a Term Insurance Plan with Accident Death Benefit rider pays `2 crore 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 `7,800 under Section 80D^^. You also get tax benefits^^ subject to conditions prescribed under Section 10(10D)^^ on the money that your family receives in case of an unfortunate eventDeath benefits:
In the unfortunate event of death during the policy term, your family receives the death benefit from term insurance. Your nominee can choose to receive a regular income along with a lump sum benefit in your absenceSurvival benefits:
Standard term insurance does not offer any benefits if you survive the term. However, a return of premium term plan also provides you with a lump sum or regular income as an assured benefit to help you fulfil varied financial goals. The term plan pays back an amount that is at least equal to the total premium paid. You receive these assured benefits at the end of the tenure
Types of Term Plans
ICICI Pru iProtect Smart offers different term plan options to suit your different needs. Below are the variants you can choose from:
When is the right time to buy a term insurance plan?
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.
COMP/DOC/Jun/2021/96/6016
BUY A TERM INSURANCE PLAN ONLINE IN 3 STEPS
What factors need to be considered while buying a term plan?
Below aspects are important to consider while buying a term insurance plan:
Evaluate your needs:
Assess your financial situation, family's needs and future expenses to determine the coverage amount and the term that best suits youCompare different plans:
Research and compare various insurance providers and their term insurance plans. Pay attention to premiums, coverage options and any additional features or benefitsConsider buying riders:
Depending on your specific needs, consider adding riders to your term insurance policy, to enhance your protectionCheck the credibility of the insurer:
Before buying a term insurance, it is important to assess the credibility of the insurer. Analysing the factors like claim settlement ratio, number of lives covered, volume of claims settled, solvency ratio and longevity of the company can help you choose the right insurance company as per your needs
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.
What are the payout options in term life insurance?
A term insurance plan is a pure protection plan that offers a life cover@ to the policyholder in return for timely premium payments. If you buy a term plan, you will be asked to name a nominee. This could be a child, spouse, parent, sibling, or any other loved one. In case of an unfortunate event, the chosen sum assured will be paid to this nominee, depending on the payout method you opt for. Here’s how this works:
Lump sum:
Under this method, a single payment will be made to the nominee in case of an unfortunate event. This money can be used as per the discretion of the nomineeIncome:
Under this, the nominee will receive equal monthly income payments in the event of any mishap. This can act as a substitute for your income in your absenceA combination of both:
Under this, a part of the sum assured will be paid as a lump sum and the remaining will be given as equal monthly income payments. This can help families who may have varied financial needsIncreasing income:
With this option, your nominee will receive increasing monthly instalments for 10 years. The income will increase by 10% simple interest every year until the entire sum assured is paid
WHY DO YOU NEED A TERM INSURANCE POLICY?
-
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. -
Lifestyle risks:
Modern day lifestyle problems can lead to a host of ailments. Some term insurance plans don’t just protect your family financially in case of a mishap 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 policy 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 98.7%.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 2.05.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 rider 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 payout 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 a terminal illness, his/her future term plan premiums will need not to be paid.
WHEN SHOULD YOU BUY TERM LIFE INSURANCE?
When it comes to buying term insurance plan, it is best to begin as early as possible. The premium of your term insurance increases with your age. Hence, to make the most of your term plan, it is advisable to buy a term plan at an early age. The below table will help you understand how your term insurance premium increases as per your age. The examples are in relation to a non-smoker.
| Age | Base policy Premium (Life Cover ₹ 1 crore) | With Critical Illness benefit (₹ 10 lakh) | With Accidental Death Benefit (₹ 50 lakh) | With Critical Illness (₹ 10 lakh) + Accidental Death Benefit (₹ 50 lakh) |
|---|---|---|---|---|
| 25 years | ₹ 629 | ₹ 755 | ₹ 916 | ₹ 1,042 |
| 35 years | ₹ 905 | ₹ 1,233 | ₹ 1,192 | ₹ 1,520 |
| 45 years | ₹ 1,968 | ₹ 2,874 | ₹ 2,255 | ₹ 3,161 |
| 55 years | ₹ 4,223 | ₹ 6,321 | ₹ 4,510 | ₹ 6,608 |
The given premiums are applicable for a healthy non-smoker male with a monthly mode of payment and premiums paid regularly for the policy term of 15 years with income payout option with Life Cover of ₹ 1 crore and optional add-on benefits respectively.
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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 a 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, and other aspects 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 term insurance 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 unfortunate event, and the lower is the risk for the company. This is why financial experts often advise 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 term insurance 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 term plan. Ailments such as stroke, heart attack, kidney failure, cancer, and other elements can be hereditary and 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 term insurance premium. If you suffer from hypertension, diabetes, fluctuating sugar, thyroid, or any other health condition your premium could be more your premium will be more.Smoking and drinking alcohol:
Smoking, drinking alcohol, 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 term insurance premium. On the other hand, if you follow a healthy way of life, your term plan premiums could be comparatively less.Profession:
Your profession can also have a pivotal place in your health. People with risky jobs such as pilots, sailors, soldiers, and other such jobs are more susceptible to danger. They are also more likely to suffer from serious ailments because of the demanding nature of their career. If your profession involves a high level of risk such as exposure to chemicals, environmental hazards, or any other risk you will be asked to pay a high premium too.Duration of the policy:
Your term insurance 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, or any other adventure sport you could be asked for a higher premium. Since these activities put your life at risk, the premiums charged are also more.
WHAT IS A TERM INSURANCE RIDER?
A term insurance rider is an add-on cover that can be bought over the base plan. Riders are added at an additional price over and above the premium and can be chosen as per your needs. There are different types of riders, such as a terminal illness rider###, a critical illness^ benefit, an accidental death+ benefit, and a permanent disability rider##.
So, what are the different life insurance riders?
Terminal illness rider:
Terminal Illness refers to the high likeliness of death within the next six months as diagnosed by medical practitioners that specialise in the same. Terminal illnesses are not only life-threatening but can also affect your finances significantly. The terminal illnesses### benefit is available with all plan options and it covers AIDS too. In case of diagnosis of a terminal illness###, the full death benefit is paid outWaiver of premium due to permanent disability:
It ensures that your life insurance policy stays active even if you are unable to pay your premiums. The effect of this policy would be waiving off all future premiums in case of a permanent disability##, but the policy benefits continue for the entire policy durationCritical illness rider^:
Under this rider, you pay an extra amount to get yourself covered in case you are diagnosed with any of the critical ailments mentioned in the policy document. Acting like an income replacement plan, the amount received under the benefit can be used to meet both medical and household expenses. Though the critical illnesses covered under the policy may vary from one insurer to another, some ailments like cancer, heart attack, brain tumour, and others are covered under the riderAccidental death benefit+:
Under this benefit, you pay an extra amount to get your family covered in case of accidental death. When you buy an accidental death benefit+ rider, the insurer pays up to double the sum assured to your nominee
How can a Term plan secure your family’s future?
Term insurance can safeguard your family's future by ensuring an assured payout in the event of your absence. The payout from term insurance plans can serve multiple purposes, such as replacing lost income, settling outstanding debts and supporting your family in achieving their future financial goals.
COMP/DOC/Sep/2023/189/4123
Importance of term insurance in the times of COVID-19
The COVID-19 pandemic has brought in a lot of uncertainty. Many people have lost their lives, and several families have been shattered. While no one can replace the loss of a loved one, a term insurance plan that covers COVID-19 life claims** can offer grieving families financial security and protection.
Term insurance policy is especially important at a time like this as it can help your loved ones move on with their lives with dignity.
COMP/DOC/Jul/2021/87/6197DOCUMENTS REQUIRED FOR TERM LIFE INSURANCE
The documents required to complete the application of a Term policy are:
Copy of PAN
Address proof
– This can be any of the following: Aadhaar - front & back/ Driving License/ Passport - front & backIncome proof
– Do note, your income proof should match with your declared annual income. Also for salaried applicants: Last 3 month’s salary slip/ Form 16/ Last 3 years ITR/ Last 6 months’ bank statement where salary gets credited. For non-salaried applicants: Last 3 years ITR with computation of income
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Term Insurance - FAQs
⭐ Are deaths due to Coronavirus covered by ICICI Pru Term Plan?
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.
⭐ Why should you buy term insurance?
A term life insurance policy can offer you many benefits. As the sole breadwinner of your family, the money from a term insurance plan can act as income replacement and help your family lead a comfortable and dignified life. Term insurance is the most inexpensive form of life insurance as the premiums are quite affordable. In return, you get a high life cover@ and many other benefits, such as a critical illness^ benefit, waiver premium in case of permanent disability## benefit, an accidental death benefit+, and others.
The critical illness benefit^(optional) covers you against expensive and life-threatening ailments. The accidental death benefit+ (optional) offers your family a sum of money in case of death due to an accident. The premium waiver in case of permanent disability benefit## waives off all future premiums if you suffer from a permanent disability.
⭐ What is the best age to buy term life insurance?
It can help you save a lot of money by buying a term insurance plan in your 20s. Buying a term insurance plan at an early age can offer you the benefit of low premiums. Since you are in the best of your health when you are young, the insurance company would offer you a relatively affordable premium even for a very high sum assured. Having said that, term insurance is crucial at any age and can be bought at a later stage in your life too.
⭐ Should I buy a Term Plan or a traditional life insurance plan?
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.
⭐ How long should be the duration of your term plan insurance?
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.
⭐ What is the policy term that I should select?
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
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
⭐ Is term insurance considered an asset?
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.
⭐ What is the age limit to buy a Term Plan?
The age limit varies based on the particular plan you choose. The minimum age is 18 years and the maximum age is 65 years to buy ICICI PruiProtect Smart, our best-selling Term Plan~~.
⭐ Do term insurance premiums increase every year?
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.
⭐ Do I need a Term Plan in my 50s or 60s?
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.
With ICICI Pru iProtect Smart Term Plan, you can also opt for short-term coverage, starting from five-year tenure, until your family achieves financial independence.
⭐ Can I have multiple term insurance policies?
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.
⭐ What are the types of death covered in term insurance?
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 illness^ 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 death+
- 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.
⭐ Do term insurance plans offer tax benefits?
Yes, Term Insurance premiums are deductible 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.
⭐ How much cover should I take in a Term Plan?
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$$
Additionally, you may also consider the following liabilities if applicable:
I. Loans & Liabilities
II. Children’s Education Cost
A simple rule of thumb for calculating Sum Assured in a Term Insurance policy is -
Minimum Sum Assured = Annual Income x 10 times + Loans/Liabilities$$
⭐ How can I get ₹ 1 Crore Term Plan?
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 FY2023 CSR stands at 98.7%~. 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
⭐ Should you opt for Limited Pay or Regular Pay Term Insurance Plan?
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.
⭐ Can I change my term insurance plans details later on during the policy tenure?
You can change specified personal and policy details at any time during the policy tenure. You can download the relevant form from our website and submit it at our branches to ask for changes in details such as:
- The spelling of your name
- Contact information
- Residential status
- Date of birth
- Nominee
- Premium payment frequency or mode
But the policy tenure cannot be modified after you buy the plan. However, your insurance needs might change as your financial liabilities increase. Therefore, the ICICI Pru iProtect Smart Term Plan allows you to increase your life cover@ amount after your marriage or the addition of your children into your family.
⭐ Can I change the duration of life cover@ after the Term Insurance Policy is issued?
No, you cannot change the policy period of Term Insurance after the policy is issued.
⭐ What happens to Term Life Insurance at the end of the term?
Once your policy matures or reaches the end of its term, it ceases to exist which means the Term Life Insurance Policy expires and your coverage stops.
⭐ What kind of deaths are not covered in Term Insurance?
All kinds of deaths are covered under a Term Insurance Plan, including natural, accidental, murder, illnesses and natural calamities. Only death due to suicide in the first year of policy is not covered.
⭐ How many times can I change the nominee in my Term Plan?
During the policy period, the nominee of your Term Plan can be changed as many times as you want. This change must be communicated to the insurer in writing, which shall ensure that the person who you think should benefit from your life cover@ receives the pay-out on time.
You can download the Nomination Form to update ICICI Prudential Life of any changes you want in your nomination details here.
⭐ What happens if the nominee dies?
After the policyholder is no more, if an unfortunate event occurs with the nominee before the sum assured is paid, then the policy benefits are received by the legal heir(s) or representative(s) or succession certificate holder(s).
⭐ Do you get your money back at the end of the policy term on survival?
No, you don’t get your money back on survival till the end of the policy term in a Term Insurance plan.
⭐ Can you cash out Term Insurance?
Term insurance is a pure protection plan that does not pay any maturity amount in case the life assured survives the policy term. This often discourages people from buying term insurance. However, you should remember that it is because of this very feature that insurance firms are able to offer term insurance at such low rates. Term insurance plans are very cost-effective with a ₹ 1 crore plan starting at as low as ₹ 485 p.m.*
⭐ Why is the Term Insurance premium amount for smokers higher than that of a non-smoker?
Term Insurance premium increases if the probability of the policyholder’s death rises. Smokers have a higher death rate than non-smokers. Hence, they are charged a higher premium.
⭐ Will my term insurance premium remain constant if later, I became a heavy drinker/smoker?
Your Term Plan premium is decided when you buy the plan and remains unchanged throughout the policy period. However, the insurance provider may not take into consideration any claim arising as a direct consequence of alcohol consumption. Read your policy document carefully to understand all the exclusions related to alcohol use.
You should also disclose any change in your lifestyle and health condition, including smoking habits, to your insurer. It will ensure a hassle-free claim settlement at a time when your family needs the sum assured the most.
⭐ What happens if you stop paying Term Insurance premiums?
A grace period for payment of premium of 15 days applies for monthly premium payment mode and 30 days for other modes of premium payment. If the premium is not paid even within the grace period, the policy shall lapse and the cover will cease.
⭐ What if I become an NRI after purchasing a Term Plan?
If you become an NRI after purchasing a Term Plan, your policy remains intact and continues to provide life cover@ anywhere in the world.
⭐ Is there any advantage of limited pay option in Term Insurance?
You can save up to 68%'' on the total premium if you opt to pay off your premiums early with Limited Pay option of 5, 7 or 10 years. This also ensures lesser liabilities but sufficient cover for the later part of your life.
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.
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?
Terminal Illness, as defined for ICICI Pru iProtect Smart, is a condition which, in the opinion of two independent medical practitioners specialising in the treatment of such illness, is highly likely to lead to death within six months. The terminal illness must be diagnosed and confirmed by medical practitioners registered with the Indian Medical Association and approved by the company. The company reserves the right for an independent assessment.
⭐ What will happen if I don't die until my Term Plan is over?
Term Insurance provides pay-out to your nominee only if an unfortunate event occurs while the cover is in force. If you survive your policy period, your life cover@ will end on the policy maturity date. Your policy will terminate, and you will not receive any pay-outs.
Due to the absence of any savings feature in Term Plans, these products are available at very reasonable premiums. With the ICICI Pru iProtect Smart Term Plan, you can get life cover@ up to ₹ 1 crore for premiums as low as ₹ 485* per month. While the plan is in-force, your family remains secure against any financial challenge arising from life's uncertainties.
COMP/DOC/Dec/2021/3012/7164
