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What Is A Renewable Term Insurance Policy?

dateKnowledge Centre Team dateJune 01, 2021 views232 Views
Renewable term insurance policy | Best term plans online

A renewable term insurance is a defined benefit provision that requires the recipient to continue the service term for a fixed amount of time without re-qualifying for new coverage. A renewable term is dependent on timely premium costs and the beneficiary's payment of a renewal premium. A term life insurance is the simplest and purest form of life insurance policy that lasts for a certain amount of time, usually 10 to 30 years. The policyholder can choose the policy term as per their coverage needs and financial affordability.

How Does a Renewable Term Insurance Plan Work?

A renewable period clause in a life insurance policy would be advantageous when potential health circumstances are uncertain. We have understood the benefit of having a life cover when the pandemic started growing. And now, it has become a quintessential part of our financial planning strategy.

While the original premiums are expected to be greater than that with a life insurance policy without a renewable period option (because the insurance provider would pay for the increased risk), this form of insurance is useful.

In general, a term life insurance contract with a renewable term offers peace of mind in a worst-case situation. The original contract for an annual renewable term (ART) life policy is for one year and is renewed periodically. Insurability is guaranteed for a certain number of years, and the death insurance is fixed. Renewability allows an account holder to retain their existing coverage without re-qualifying (though at a significantly higher cost).

Learn why should you renew your term insurance policy?

4 Benefits of Renewable Term Insurance Plans

Buying the best term life insurance ensures a peace of mind and financially secured life for you and your loved ones. That is the reason a lot of people buy term plans online as it helps them prepare for future contingencies. Let us closely have a look at the various benefits offered by term insurance plans:

1. At the end of your original contract, you will redeem your coverage.

2. Beneficiaries will receive death benefits if the policyholder passes away, and the amount they receive can be used for paying of any unpaid debts and liabilities.

3. Allows you to renew your term life insurance contract without having to go through the renewal process all over again.

4. You are not required to answer medical questions or take a medical test to show the insurability.

How can iSelect Star Term Insurance Plan help you?

iSelect Star Term Plan by Canara HSBC Life Insurance is a protective hedge against life's uncertainties. A highly adaptable term package that can cater to all life stages and life insurance needs. Let us have a deeper look into the basic features offered by the iSelect star term insurance plan to help you understand why we recommend it.

Primary Features of iSelect Star Term Insurance Plan

1. Life insurance coverage at a reasonable price with the option to cover for a specific amount of time or the rest of your life.

2. We tailor the package to your preferences by selecting from various coverage, monthly payment, and bonus compensation plans.

3. Multiple premium payment options are available, including a single bullet payment throughout the entire contract, payment for a fixed period of 5/10/15/20/25 years, or payment only throughout your working years, i.e., when you reach the age of 60, in addition to payments during the Policy.

4. Term Discounts on premium for higher Sums Assured and female lives, and loyalty discounts for current clients and customers.

5. Benefits may be received as a lump sum, monthly pay, or a combination of the two, with the option to choose between level and increasing income.

6. Increase your life insurance coverage as the life phases and security requirements change, all while staying under the same package.

7. Section 80C of the Income Tax Act of 1961 allows you to exclude the premium you pay for this scheme. Lump-Sum – In this case, the insurer covers the benefit in one lump sum.

Renewable Term Life vs Convertible Term Life: What's the Difference?

Renewable term life insurance is often confused with convertible term life insurance. Although a renewable term life insurance merely extends your existing coverage, a reversible term life insurance policy requires you to convert your coverage at any time within your term. A policyholder may change his or her term life insurance to full life insurance.

The two forms of policies are comparable in that the patient does not have to re-qualify or pass further screening, regardless of his or her fitness. Renewable term insurance coverage cannot be converted to whole life insurance, whereas it can convert convertible term life insurance to whole life insurance.

Renewable lifetime life insurance is a contract that can be renewed before the term expires. If you already have financial commitments after your insurance expires, such as a mortgage or university payments, these plans will provide you with the stability you need.

When you renew, keep in mind that the prices will increase depending on your age. Get the iSelect start term plan by Canara HSBC now as you can easily increase the sum assured with growing life stages.

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Frequently Asked Questions (FAQs) for Term Insurance

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 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 a 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?
  9. 9. Does the term insurance plan have a cash value if you decide to cancel the policy?
  10. 10. Under what circumstances can a term insurance plan be cancelled?
  11. 11. Can I pay the premiums online or make electronic payments?
  12. 12. What will happen to the term plan if the life assured starts smoking after purchasing the policy?
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