Term insurance is a type of life insurance that offers financial coverage against the unfortunate demise of the insured during the policy term. It is a cost-effective way to provide financial protection for your loved ones. Buying a term insurance ensures peace of mind and tax~ savings.
Before buying a term insurance plan, it is important to thoroughly research various insurance providers in the market and consider your insurance needs. Additionally, you must compare the features and benefits of different policies to ensure that you find the best coverage at the most affordable price.
How to choose the best term insurance plan in India?
1. Claim Settlement Ratio of Insurance Companies :
This ratio reflects the percentage of claims paid out of the total claims filed in the year. The higher the ratio, the easier it’ll be for your dependents to claim the insurance in your absence and continue to live their lives comfortably.
The purpose of term life insurance is to secure your dependents’ future. The higher the claim settlement ratio, the better are the chances of ensuring that your family’s future is secure.
While the claims settlement ratio is important, what’s equally important is to check the total number of claims that were settled by the insurer. Only when a substantial number of claims are settled, the Claim Settlement Ratio acquires
Fact: ICICI Prudential Life has a Claim Settlement Ratio of *. The claim statistics are for FY2023 and are computed on individual basis claims settled over total individual claims for the financial year. For details, refer to the Annual Report 2022-2023 on our website.
2. Solvency Ratio:
The solvency ratio tells you whether the insurer you choose will be financially capable of settling your claim if the need arises. The Insurance Regulatory and Development Authority of India (IRDAI) mandates that every life insurer should maintain a solvency ratio of at least 1.5.
Fact: ICICI Prudential Life has a solvency ratio of 2.05^.
In case of a natural disaster, a life insurer will receive a large number of claims in a short period. Since a
3. Critical Illness Cover:
A term insurance plan secures your family’s financial future in case of an unfortunate event. But the
4. Additional Covers available:
All term insurance plans will provide a basic life cover`. If the financial security of your family is your goal, then you must make sure that you choose a term insurance plan with comprehensive
- Waiver of Premium: Life insurance cover will continue without the need to pay the future premium in case of permanent disability.
- Accidental Death: This benefit increases the sum assured to be paid to your family members in case of death due to an accident. Most good term insurance plans will offer you an accidental death cover equal to the base sum assured.
- Income Benefit: Some term insurance plans allow your family members to receive a regular income from the plan rather than a lump sum amount. This benefit comes in handy if you want your term insurance plan to provide monthly income to your family in your absence.
Some other benefits you can look at are terminal illness benefit, flexibility to increase the sum assured at major milestones and increasing monthly income benefit.
5. Premium Cost:
Once you have evaluated term insurance plans based on the above parameters and narrowed your choices down to a few, then you can look at the
Fact: If cost is a major area of concern, then you can always select a
The ICICI Pru iProtect Smart Plan offers a high life cover` at an affordable premium. The plan also offers additional riders such as critical illness# rider (optional), accidental death benefit^^ rider (optional), waiver of premium in case of permanent disability## and terminal illness$ at nominal costs and a life cover` till the age of 99.
1. Is it worth it to get term life insurance?
The critical illness cover takes care of health insurance by covering you against expensive and life-threatening ailments. The accidental death cover offers your family a sum of money in the unfortunate case of death in an accident. The disability cover waives off all future premiums if you suffer from a permanent disability and are unable to work.
2. What happens if I outlive my term life insurance?
Alternatively, there are term plans with a return of premium also available in the market where the premiums are slightly higher but there is a money-back at the end if you survive the policy tenure.
3. What should be the duration of your term plan?
There are several aspects that need to be looked at while selecting the policy term. You can start with your age. The younger you are, the longer the period you need protection for and vice versa. Your gender too plays a crucial role here, as women generally live longer than men1. Similarly, your lifestyle habits, the ages of your dependents, and other factors. Also, decide the length of your policy term.
4. Do term insurance premiums increase every year?
Your premium may also rise if you increase your life cover` or enhance the coverage of your policy with additional add-on benefits.
5. What are the types of death covered in term insurance?
- Natural death caused by factors, such as age or a medical condition
- Death due to a critical illness such as cancer, stroke, and others
- Death due to an accident is also covered. Some plans also offer additional payouts to the nominee in the event of an accidental death
- Death due to a natural calamity like an earthquake, flood, hurricane, tsunami, etc. is also covered under the plan
- Self-inflicted harm or death caused by suicide is not covered under term insurance, for a certain duration from the policy inception/revival
- 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
6. How much money should I have as a sum assured for my term policy?
Keep in mind that the sum assured should reflect your family’s requirements. On an average, most people pick a sum assured equivalent to 10 – 20 times their annual gross income2.
7. When is the right time to buy term insurance?
|Points to remember about our ICICI Pru iProtect Smart Term Plan
|Claim Settlement Ratio of 98.7%*
|Solvency Ratio of 2.09^
|Critical Illness Cover for 34 critical illnesses#(optional)
|Accidental Death Cover^^ up to
100% of the base sum assured (optional)
|Waiver of Premium## on permanent disability
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* Claim statistics are for FY2023 and is computed on the basis of individual claims settled over total individual claims for the financial year. For details, refer to the Public Disclosures on our Website.
1 Why men often die earlier than women - https://www.health.harvard.edu/blog/why-men-often-die-earlier-than-women-201602199137
2 How much life insurance do you really need? - https://economictimes.indiatimes.com/wealth/insure/how-much-life-insurance-do-you-really-need/articleshow/22065416.cms?from=mdr
^ ICICI Prudential Life | Solvency ratio for FY2022: https://www.iciciprulife.com/content/dam/icicipru/aboutus/FinancialInformation/AnnualReports/FY2022-AnnualReport.pdf
`Life cover is the benefit payable on the death of the life assured during the policy term.
# Accelerated Critical Illness Benefit (ACI Benefit) is up to ₹ 1 Crore (Subjected to underwriting guidelines). Accelerated Critical Illness Benefit (ACI Benefit) is optional and available under Life & Health and All in One options. This benefit is payable, on the first occurrence of any of the 34 illnesses covered. Medical documents confirming the diagnosis of critical illness need to be submitted. The benefit is payable only on the fulfilment of the definition of the diagnosed critical illness. The ACI Benefit is accelerated and not an additional benefit, which means the policy will continue with the Death Benefit reduced by the extent of the ACI Benefit paid. The future premiums payable under the policy will reduce proportionately. If ACI Benefit paid is equal to the Death Benefit, the policy will terminate on payment of the ACI Benefit. To know more in detail about the ACI Benefit and terms & conditions governing it, kindly refer to the sales brochure. ACI Benefit term would be equal to the policy term or 30 years or (75-Age at entry), whichever is lower.
^^ Accidental Death Benefit (ADB) is up to ₹ 2 crore (subject to underwriting guidelines). ADB is available in Life Plus and All in One options. In case of death due to an accident, Accidental Death Benefit will be paid out in addition to Death Benefit. Accidental Death Benefit will be equal to the policy term or (80-Age at entry), whichever is lower.
## On the diagnosis of Permanent Disability (PD) due to an accident, the future premiums under your policy for all benefits are waived. To know more about the definitions and terms & conditions applicable for permanent disability due to an accident, kindly refer to the sales brochure of ICICI Pru iProtect Smart.
~ Tax benefits are subject to conditions under Sections 80C, 80D, 10(10D), 115BAC and other provisions of the Income Tax Act, 1961. Goods and Services Tax and Cesses will be charged extra as per prevailing rates. Tax laws are subject to amendments made thereto from time to time. Please consult your tax advisor for more details.
$ A Life Assured shall be regarded as Terminally Ill only if that Life Assured is diagnosed as suffering from 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 6 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 independent assessment.
ICICI Pru iProtect Smart UIN (A Non-Linked Non-Par Life Individual pure risk premium product).
ADVT No: W/II/0088/2022-23