FeEEatures & Benefits of Term InsuranceFeatures & Benefits of Term InsuranceFeatures & Benefits of Term InsuranceFeatures & Benefits of Term Insurance

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Features & Benefits of Term Insurance

Features of Term Insurance

• Provides a life cover to the insured and financial protection to your family against the risk of an unexpected death during the policy term
• Provides your family the financial security with a pocket-friendly plan
• Offers a free look period
• Additional optional riders to increase the base plan coverage
• Offers lower rates for non-smokers and female lives
• Flexibility in choosing policy period, premium paying modes, premium frequency, etc.

Benefits of Term Insurance

• Offers financial security to your family in your absence
• Higher sum assured at a lowest premium
• Facility to buy term insurance online
• Tax Benefits on the premiums and payouts under Section 80C and 10(10D) of the Income Tax Act, 1961.

How Does a Term Insurance Plan Work?

A term insurance plan is the purest form of life insurance product. It offers high sum assured at a low premium. The life assured is covered against the risk of an unexpected death (natural or accidental death) during the policy period. In case the life assured passes away during the policy period, the insurance company pays the life cover amount (sum assured) to the nominee as mentioned in the policy document.

The payout of the sum assured is based on the type of payout option selected at the time of purchase of the term plan. The payouts can be a lumpsum payout, lumpsum and monthly income payout, or monthly income payout as opted at time of buying.

Payouts

Lumpsum

The sum assured is paid out as a one whole amount in 'lump sum' to the nominee of the policy.

Example of a Lumpsum payout Term Plan:

Sum Assured – Rs.1 crore

Payout – Rs.1 crore (all at once) as a death benefit)

Lumpsum + Monthly Income

Example if a Lumpsum + Monthly Income Term Plan:

Sum Assured – Rs.1 crore

Payout – Rs.50 lakh (at once – at the time of death claim) and Rs. 50,000 every month as a death benefit)

Monthly Income or Income Replacement

A percentage of the sum assured is paid in monthly instalments regularly from the first month of the occurrence of death.

Example of a Monthly Income Term Plan:

Sum Assured – Rs. 1 crore

Payout – Rs. 1 lakh every month (Rs.12 lakh annually) for 83 months (approximately) as a death benefit.

Exclusions

How Much Term Insurance Do You Need?

Who Should Buy a Term Plan