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A detailed comparison of online term insurance

dateKnowledge Centre Team dateFebruary 16, 2021 views189 Views
A detailed comparison of online term insurance

Term insurance is a type of life insurance policy that provides insurance for an established period or a specified "term" of years. If the insured dies during the period specified in the policy and the policy are lively, or in force, a death benefit will be paid.

Why must one buy online Term Insurance?

Like everyone else, one also imagines that not a thing will happen to them. We, too, would want the same. But the cruel truth is that this life is extremely undetermined. There is always a factor of risk which escorts you to ask "What If?" question. The true and easy meaning of insurance is – protection against risk. Now, this risk may be to live or possessions or many other things.

When weighed up to permanent life insurance, term insurance is much less expensive in the beginning. Unlike most types of eternal insurances, term insurance has no cash merit. In other words, the only merit is the promise of death benefits from the policy. There are numerous types of term insurance policies available. Many policies offer a level premium for the policy's duration, such as ten, 20, or 30 years. These are often referred to as "level term" policies. A premium is a specific cost, which is generally monthly, that insurance companies demand from policyholders to provide the advantages of the insurance policy.

The insurance company computes the premiums based on the individual's health, age, and life anticipation. A medical exam that reviews the person's health and family medical history might be required depending on the policy taken.

The premiums are set or rooted and financed for the extent of the term. If the policyholder dies earlier than the policy's expiration, the insurance company will pay out as per the value of the policy. If the term expires and later on the individual dies, there would be no coverage or payout. Yet, policyholders can stretch or renew the insurance, but the new monthly premium will be established on the person's age and health at the renewal time. As a result, the premiums could be more for the renewed policy versus the original term policy that was launched when the individual was younger.

Term insurance has two features that make it attractive

This is a pledge based on the premium and survivor benefit for an established amount of years, depending on the company, age of the insured, and other elements.

There is no power of accumulating cash inside the policy. One can not pay an extra premium to get an additional benefit and also cannot transfer money from other accounts into the policy. The bearer will not pay dividends or apply interest to one's account.

Before opting for any term insurance there are some factors that you need to think about. One's financial liabilities will help one decide the term of the policy. For example, if an individual has a loan of 10 years, then the period needs to be ten years. Thinking about how long one's loved ones will be financially dependent on you will help one decide on the term of one's policy. For example, if one is the only earning hand of the family, buying a cover for a long span would be thoughtful. The topmost one-time expense that can appear in the future. One's family's financial status also takes an important part in deciding the term of the policy.

For example, if one's child's age is ten years and the aim is to provide coverage till one's child's marriage or higher education, at that time the span of your term insurance policy could be 20-25 years. This is yet one more reason to reckon with deciding on the span of the term insurance policy. For example, one's current age is 30 years, and one chooses a 10-year plan, one's plan will run out when you will turn 40. There are fewer chances that one will need coverage before this age. Moreover, if one plans to buy a plan, it will cost a lot. Therefore, it is advisable to buy term insurance at a younger age but for a longer duration.

Canara HSBC Oriental Bank Of Commerce Life Insurance provides the following plans.

Long Term Financial Security

To put it clearly, financial security means having enough money to fund your lifestyle, as well as work toward your financial goals. iSelect Star term plan covers up to 80 years, ensuring the most prolonged financial security to avail for your family.

Spouse Cover

Adding a spouse to the plan is an advantage provided by term insurance plans, where spouses together are policyholders and such policies are known as collective term plans. The iSelect Star Term Plan, offered by Canara HSBC Oriental Bank of Commerce Life Insurance, offers discounts on premium rates when a partner is included on the policyholder's term plan.

The plan offers an insurer other benefits that could prove beneficial to both spouses, including multiple options for payment of premium along with multiple possibilities to receive benefits. This indicates that the policyholders' nominees can receive the sum assured either as a lump sum amount or as a monthly income or even take half as a lump sum amount and half as a monthly income. Additionally, they can also choose whether they wish to receive the sum assured as a fixed amount over the months or increase income.

The benefits offered by mutual insurance other than two separate term plans for a couple.

  • Enhanced Sum Assured: Beneficiaries such as children will earn a higher sum if mutual insurance is opted for. It ensures that one has opted for a term plan which makes payout for both spouses and not just one. If one partner dies, the sum is assured to the other, also if both die the children get the money.
  • Improved Convenience: With a collective term plan, paperwork completion is much convenient, and there is hardly any nuisance with documentation. The common term plan can be brought about with the least paperwork and maximum convenience. If one opts for the iSelect Star Term Plan, offered by Canara HSBC Oriental Bank of Commerce Life Insurance, one can access the term plan with minimal documentation. Additionally, suppose one opts for a joint term plan. In that case, the terms and conditions remain the same for both policyholders meaning one only needs to study the policy's fine print once instead of having two different term plans with differing terms, conditions, and fine print in the policy document.
  • Reasonable Premiums: It will always be more economical to pay for a single common term plan that offers coverage to both individuals rather than pay for two separate term plans.

Disclaimer of Premium: If one of the spouses dies, the other receives a premium waiver. This means that they no longer need to pay premiums to keep the term plan active. Despite them not paying premiums, the spouse will still be able to assert the policy's benefits and their dependents will be able to get the sum assured on their death as well.

  • Accidental Death Coverage

    When it comes to securing the future of one's loved ones or doing proper financial planning, term insurance is one of the most popular options for insurance seekers. This insurance provides financial protection to the family of the insured, in case of any eventuality. A lump sum benefit is paid to the beneficiary in case of the insured's demise during the policy tenure. iSelect Star term plan arms one against financial challenges that occur due to sudden disability or accidental death. It never allows one to run out of money in the face of adversity.

  • Family's Financial Security

    What do you always dream about for your family? That they never run out of money, no matter if you are there or not. iSelect Star term plan makes your dreams come true by offering you a monthly income option to meet your family's financial needs in your absence or disability. iSelect Star term plan also provides comprehensive coverage that can help secure your child's future in your absence.

  • Increased Coverage with Aging

    Suppose one needs more facilities and coverage that takes care of illnesses or accidents as one ages. iSelect Star term plan offers full flexibility on one's premium and coverage. The term plan increases 25% coverage every five years based on one's ageing requirements.

  • Tax Benefits

    When thinking of the best term insurance plan, people worry about the extra bucks they have to pay in the name of security. But they never look at the tax benefits they are getting in front of insurance. Term insurance plans work in two ways. On one side, it gives you tax benefits under section 80C and 80D, and on the other hand, it gives lifetime security even after your death.

So, if you are worried about paying extra money from your pocket, think of how much you are saving from tax. Hence, there won't be a big hole in your deep pockets when you plan for a term plan.

One should always comprehend the term insurances before opting for any. Find out which will suit best according to your needs and choose what is best for you according to your needs.

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Frequently Asked Questions (FAQs) for Term Insurance

This being a term plan doesn't offer any payout after maturity or expiration date.

Each insurance company has its own term insurance premium calculator. If you want to check out the premium quote, go for the iSelect Star term plan calculator. It gives a premium amount based on your age, gender, habits, education, and annual income.

You can purchase an iSelect Star term plan anytime between 18 to 70 years of age.

It depends on your needs. For example, if you want to cover a child's education or wedding expenses, you have to include them in your coverage. Your premium will be calculated accordingly.

If your key purpose is to give your Family financial protection, go for the term insurance plan. And if you want some savings, in the end, go for a traditional life insurance plan.

Go for at least 12 times cover than your annual income. Or you can go as far as 20 times coverage as per your needs.

The right time is when you don't have anything to keep your Family safe from financial storms, and they rely on you for financial needs.

If you are unable to make the payment or suffering from a terminal illness, a term plan pays a part of the sum insured to treat your disease.

Term insurance riders are attachment or endorsements made, while taking the term insurance policy, as a supplementary coverage to policyholders. Apart from the core death benefit, term insurance riders offer below-given additional benefits:

  • Accidental Death Rider When a person suffers from a terminal illness, his/her family ends up spending a significant amount in treatment and medical expenses. Accelerated death rider pays a part of the sum insured in advance to cover such costs and save the family from running out of cash.
  • Accidental Disability Rider If the policyholder can't pay the premium because of an accident or permanent disability, a sudden disability this pays the premium on behalf of the policyholder till completion of policy term or for a defined duration.
  • Critical Illness Rider If the insured person gets a heart attack, cancer, or any other critical illness, this rider pays a lump sum on valid diagnosis.
  • Premium Waiver Rider If the policyholder is unable to make payments due to income loss or disability, a premium waiver rider waives off all future premium payments. And the term policy remains active until the expiration date.
  • Income Rider: The rider ensures that your family receives regular income + sum insured in case of unfortunate demise of life insured.

Anyone can go for life insurance as it offers some savings after the maturity date, but it doesn't cover the protection of your family . The best term insurance plan is solely designed for taking care of loved ones if something happens to you. Term plans act as a shield between your family and sudden financial fall. They make sure that your family lives a healthy life even after you. With a little amount paid per year, you can be worry-free from the family's financial conditions.

Questions that you need to ask while buying Term Insurance?

  1. 1. Amount of premium you have to pay based on your age, habits, education, and monthly income
  2. 2. The total number of benefits covered in the term plan. Do they include benefits that you care about the most?
  3. 3. How to save money on tax if you pay for the term plan?
  4. 4. Do they offer regular income options?
  5. 5. Can you change the coverage and premium in the future?
  6. 6. Does the claim consider valid if death occurs outside India?
  7. 7. Which kind of death is not covered by insurance?
  8. 8. Can NRIs take term insurance? If yes, what are the conditions?
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