Term plan is a Life Insurance policy that provides financial coverage for an individual’s death to his/her nominee. The financial benefit can be passed on as monthly benefit or a lumpsum payout based upon what the insurer has chosen at the time of policy purchase.
Benefits of Term Insurance Plan
In case of your absence
- Get a lumpsum money for your family
- Option to close down loans taken by insurer
- In case of accidental death, option of increased sum assurance.
- Option to support family in case of disability or critical illnesses.
There are 24 companies providing term plans. The premium of a term plan depends majorly on the below mentioned criterias
- Your age
- Your salary
- Your gender
- Your smoking habits
While purchasing a term policy the most important aspects to know about the insurance company are –
- What is the claim ratio of the company
- How much lower the cost is relative to others
- What are other benefits provided within the plan
A Term Plan offers many benefits like
- Tax Benefits
- Choice of multiple options
- Age of Entry
- Survival and Death Benefits
- Option to choose additional riders
Note that a life insurance policy is most needed type of of insurance product in ones life, however, you might like to know 4 Unpopular Reasons Why Life Insurance May Not Beneficial For Everyone
Eligibility Criteria for Buying Term Plan
Top 5 eligibility criteria for buying a term plan are listed below:
- Both, resident and non-resident individuals are permitted to avail Life Insurance Plans. Although, for non- residents, the premium payments on the policy are required to be deposited in Indian Currency and the maturity benefits are also provided in Indian Currency.
- It might vary from insurer to insurer regarding the eligibility criteria for buying life insurance plans. The bottom age of entry can be 30 days in ULIP Plans and 18 years in case of adults.
Although, if a minor is insured, the policyholder should be 18 years or above and the policyholder would be bound to pay the premium. In this case you should already know that a term plan calculator will show low premium for less aged people. - Differing amongst various plans, the maximum age limit is generally 70 to 85 years to avail life insurance. Although, whole life plan covers the insured individual till they reach 99 or 100 years of age.
- Usually, the minimum sum assured under life insurance plans is INR 50, 000 with no imposed maximum limit but they may differentiate amongst different plans.
- Based upon the age of the individual, sum assured under the policy and the medical history of the applicant individual, it might be required to run medical check-ups before buying the plan under some cases.
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Renew Life Insurance Policy Online
A policyholder can avail the service provided by their insurance company of renewing the life insurance policy online.
By visiting the official website of your Insurance Company, you can enter your policy number, date of birth or any required information to log in. The website will then display the information regarding the details of your existing life insurance policy and other relevant information.
For depositing the payment online, you can pay via debit card, IMPS, credit card or any other digital payment gateway to instantly renew your life insurance policy. It is necessary to renew the policy within its due date.
If not done so, a grace period is also given to the policyholder to renew the policy in that period. The grace period is usually given for the duration of 30 days when the premiums are paid annually, quarterly or half-yearly.
However, the grace period for monthly premiums is limited to that of 15 days. To ensure that your life insurance policy does not get terminated, you are required to renew the policy within this given period.
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Benefit of Life Insurance Plan Renewal
- Continuity of Coverage: Continuity of coverage is ensured throughout the tenure of a policy by renewing your life insurance plan. Renewals demand the same amount of premium, regardless of your growing age and if you keep making timely renewals, you can avail the benefit of coverage at the same premium during the policy’s tenure.
- Plan Benefits Intact: Without worrying about passing the entire process of choosing and buying a life insurance policy all over again, if you keep making renewals of your plan on time, all the benefits of the plan tend to remain intact.
- Benefit of Bonus: You can also avail the advantage of bonus in case if you have bought a participating policy by renewing your policy within the authorized time.
Know all about LIC Policy List
| Also Read: List of Top Term Plans in India |
Term Plan FAQs
What is a review or freelook period? How is it beneficial for me?
In case if you wish to reconsider your investment after the allotment of the policy, Free-look period or cooling off period, is a duration which permits cancellation of the plan after its issuance.
The free-look period is allowed for 15 days from the date of commencement of the policy.
In case of online sale or sale through any distant marketing channels, the free-look period is allowed for 30 days.
During the free-look period you can cancel the policy and avail a premium refund. The refunded premium would, however, be adjusted for the cost of issuing the policy and also for the cost of insurance cover during the period for which the policy was in force.
The major advantage of the free-look period is that it allows you to make a cancellation and avail your premium refund in case if you are not appeased by your plan. It permits you to reevaluate your decision of buying a health insurance policy.
What is renewal process for life insurance
The premium payment needs to be deposited on or before the specified due date by your insurance provider to renew a life insurance policy and continue enjoying its coverage benefits.
However, if you fail to pay the premium on the due date, you get an additional period to pay the outstanding premium.
This period is called the grace period and it is 30 to 31 days if you pay premiums annually, semi-annually or quarterly.
Although, if you pay premiums monthly, the grace period is 15 days. If you pay the premiums either on the due date or within the grace period, the policy would be renewed.
The service of both, online and offline portals are provided by the insurance companies for making the payment for a policy’s renewal.
Note that timely renewing your term policy also helps in faster life insurance claim process.
What is the benefit of opting Term Plan Rider Add ons?
The add ons given by insurance companies for increase in coverage enhances the benefits of the policy purchased. Riders offer enhanced coverage benefits at minimum premium outgoes.
Hence, these benefits are highly recommended for an individual who desires to avail an all-round protection as riders assist in altering the coverage benefit as per a person’s needs and requirements.