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Can I Buy A Term Insurance For Disabled Person

Can I Buy A Term Insurance For Disabled Person

Term insurance is one of the most essential investment options you should consider. Not only is it a worthy investment in a protective life cover, but it also helps you reduce your tax liability. Yet, despite its many advantages, a large section of the country's population remains unprotected by life or term insurance. In fact, around 75% of Indians are underinsured

The situation is even more dismal among disabled and handicapped persons. To break this cycle, the first step is to understand what term insurance is all about.

What is a term insurance plan?

A term insurance plan is a protective life cover offered by an insurance service provider. The insured and the insurer enter into a contract, where the policyholder agrees to pay a premium as a lump sum amount or as periodic payments in exchange for a financial safety net. If the policyholder passes away before the policy's term comes to an end, the beneficiary or nominee receives the death benefits promised under the term insurance plan.

Can a disabled person invest in term insurance?

Yes, handicapped and disabled persons are eligible to invest in Term Insurance Plans. In fact, many leading insurance service providers offer specific plans tailored to provide term insurance for disabled persons. This is particularly useful in our country, considering the significant proportion of disabled people among the population. As per census records, around 26.8 million Indians suffer from disability. That translates to around 2 out of every 100 people in the country.

Term insurance for disabled persons can help handicapped and differently abled people ensure that the future of their family is safeguarded. Differently abled people can also benefit significantly by investing in term insurance for disabled persons.

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How can disabled persons benefit from term insurance?

Term insurance for disabled persons can help handicapped or differently abled people and their families in more ways than one. Here are some of the benefits associated with term insurance.

1.Financial assistance for the policyholder's beneficiaries

Term insurance for disabled persons involves payment of death benefits to the nominees in case the policyholder passes away during the term of the policy. If the insured was the sole or the primary breadwinner of the family, it may mean a loss of income for the surviving beneficiaries. The death benefits can help the family get through these tough times by ensuring that there's a financial safety net they can fall back on. It can be used to pay off debts left by the deceased or handle important expenses like tuition fees.

2.Monetary support to handle medical expenses

Managing disability can be expensive. It often involves frequent visits to the doctor to evaluate and manage the condition. Disabled persons may also require treatment to handle any complications that may arise from the underlying handicap. These factors typically lead to mounting medical expenses that can be tough on the wallet. Term insurance for disabled persons can help the insured meet these costs if the base plan is supplemented by additional riders, which most insurance companies offer.

3.Tax benefits to the investor

Disabled persons can also enjoy tax savings by investing in term insurance. Section 80C of the Income Tax Act provides that the premium paid by the investor can be deducted from their total income, thereby reducing the tax liability. The premium is deductible up to Rs. 1.5 lakhs. Additionally, the death benefits received by the nominee or beneficiary of the disabled person are also not taxable, owing to the provisions of section 10 (10D) of the Income Tax Act. Thus, by investing in term insurance, disabled persons can enjoy a protective cover and tax benefits.

What are the factors to consider before investing in term insurance?

Insurers tend to include certain special clauses for disabled persons, due to the higher degree of risk involved. So, investors with disability need to understand the terms associated with the coverage before purchasing a plan. If you're differently abled, you also need to take into account certain important factors, as explained below.

1.The cover offered

You need to ensure that the cover offered by the term insurance plan is adequate to get your beneficiaries through the financial crisis that may occur in case of your death. Look up the sum assured and calculate if it's enough to cover the annual expenses of your dependents.

2.The premium payable

The premium payable to purchase term insurance for disabled persons is generally higher than the regular premium charged. Nevertheless, ensure that the premium you need to pay is within your budget, so you reduce the risk of defaulting on the payment.

3.The rider options available

Term insurance often comes with additional covers such as accidental death benefit coverage, waiver of premium riders, or long-term care riders. For persons with disabilities, investing in riders can prove to be particularly useful. So, ensure that your term plan is enhanced by the right rider.

The takeaway

Term insurance can be purchased for disabled persons without any hassles. All you need to do is ensure that the cover offered by the insurer is adequate to cover your medical needs in case of any emergency, and your nominee's financial needs in the event of your demise. Canara HSBC Oriental Bank of Commerceoffers many helpful features as part of the iSelect term plan. Among these are benefits like in-built terminal illness benefit, accidental death or disability cover, an incremental sum assured feature, and flexible death benefit payout options.

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Frequently Asked Questions (FAQs) for Term Insurance Plans

A person can only purchase a term insurance plan till the age of 65 years, and they can choose the risk coverage for up to 99 years of age. One can easily buy the best online term plan between the age of 18 to 65 years.

This being a term insurance 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 65 years of age. This is a term plan with return of premium option – that means all the premiums paid throughout the tenure will be paid back to you if you outlive the policy.

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 when you buy the best term plan in India.

If your key purpose is to give your Family financial protection, go for the best term insurance plan. And if you want some savings, in the end, go for a traditional life insurance plan. iSelect Star is a term plan with return of premium option. All the term insurance premium will be paid back to you, if you outlive the policy term.

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, the best term insurance plan pays a part of the sum insured to treat your disease.

Term life insurance plan 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 plan 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 insurance policy remains active until the expiration date.
  • Income Rider: This rider in a term insurance plan 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 insurance 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 the Best Term Insurance Plan?

  1. 1. Are you buying a term plan with return of premium?
  2. 2. Amount of premium you have to pay based on your age, habits, education, and monthly income
  3. 3. The total number of benefits covered in the term insurance plan. Do they include benefits that you care about the most?
  4. 4. How to save money on tax if you pay for the term life insurance plan?
  5. 5. Do they offer regular income options?
  6. 6. Can you change the coverage and premium in the future?
  7. 7. Does the claim consider valid if death occurs outside India?
  8. 8. Which kind of death is not covered by a term insurance plan?
  9. 9. Can NRIs take a term insurance plan? If yes, what are the conditions?
  10. 10. Does the term insurance plan have a cash value if you decide to cancel the term insurance policy?
  11. 11. Under what circumstances can a term insurance plan be cancelled?
  12. 12. Can I pay the premiums online or make electronic payments?
  13. 13. What will happen to the term life insurance plan if the life assured starts smoking after purchasing the policy?
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