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 disability due to an accident
- Tax benefits up to ₹ 54,600/- under Sections 80C, 80D & 10(10D)5
- 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 a 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 ₹ 485/-*.
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 the 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.
Tax 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 tax-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.
Things to know before buying a Term Insurance Plan
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 illness, Accident Death, and Permanent 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 that 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 illness, Accident Death, and Permanent 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 that 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.
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