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Have a Car Insurance? Why Not Term Insurance Policy As Well?

Have a Car Insurance? Why Not Term Insurance Policy As Well?

life Insurance for covid

Love your car? Of course, you know how bad it feels when the car gets a dent. It’s even more painful when it happens not because of something you did, but due to someone else.

You know the road has bested even the most disciplined and skilful drivers many times. Despite all the caution and skill, not everything would be in your control when you are travelling. So, you buy term insurance to avoid losing your financial status along with your car in accidents.

With adequate car insurance, you can be sure to continue your life even if you lose the vehicle due to misfortune. Ever thought that ‘you’ might be the ‘vehicle’ driving your family and children towards their goals in life?

Life vs The Road

You’d be amazed to know how many values and traits our lives share with the road. You could be on a six-lane highway, an interior road without partition, or the street near your house. You will always have twists, turns, ups, downs, breakers, red-lights and depending on the city, even unexpected potholes.

Both living and driving are often about navigating whatever comes with caution, and awareness. At times, accidents may still happen, and most of the times it’s difficult to ascertain the fault. But, regardless of who was at fault, you do need to get back on your feet as soon as possible and continue the journey.

If it’s about the car, your car insurance will help you get back in your car and on the road quickly. But, when it’s about life, you need something different ~ term life insurance.

Term Life Insurance as Backup for Your Family

Now the term life insurance plan is a very efficient way to safeguard your family’s financial health. Just like car insurance, which protects the car owner from financial jolts, term insurance too protects your family.

With term insurance plans you can expect to protect your family from:

  • Your sudden demise
  • A temporary or permanent disability
  • Life-threatening illnesses

As you can very well imagine, these situations affect your earning capacity. Without a financial backup to cushion the impact all the three situations harm your dependent’s financial future.

How Term Insurance Works

How Does Term Life Insurance Work?

Life insurance, though, has a lot of similarities which you can break down the whole process of securing a term life cover and how it protects your family in the steps below:

Step 1: Select the term insurance benefit

Find out the amount of money your family will need to achieve

  • Their financial goals &
  • Maintain their lifestyles

Then you consider the maximum financial value you have based on your income and age. For example: if you are 30 years of age and your annual take-home income is Rs. 12 lakh your financial life value will range between Rs. 1.2 crores to Rs. 2 crores; i.e. 10 to 15 times of your income.

You can use an online term insurance calculator for this.

If the amount your family needs are higher than your financial value, you may consider increasing the cover in the future.

Step 2: Add more benefits

Once you have decided your benefit amount for the term insurance cover, you can add other benefits:

  • Personal accident covers: Insurance for accidental death and disabilities
  • Critical illness covers: Insurance for life-threatening diseases such as cancer, heart failure, and organ transplant needs

Step 3: Select the pay-out mode or modes

Select the mode of benefit pay-out at the time of claim. At this step you can select whether your family should:

  • Receive a large sum in a single payment or
  • A percentage of the benefit as a regular income

Ideally, you should divide the total benefit amount into both. So that your family may receive a lump sum as well as a regular income.

The lump-sum amount will help them pay off any immediate liabilities and invest in long-term goals. The regular income will help them continue running the household expenses.

Step 4: Choose Premium Payment Mode

  • Decide how long would you like to continue paying the premiums
  • You can choose to pay for a few years, or pay all at once

Ideally, you should choose the premium payment tenure such that you pay all your premiums before retirement. So, that there is no burden on your post-retirement income if you chose a long-term life cover.

Step 5: Complete the Application & Submit Documents

Life insurers need relevant information about your health, family history, employment etc. You can fill all the information in the application form and submit supporting documents online.

Step 6: Medical Examination & Policy

Once you submit the proposal form for the term insurance cover, the insurer may ask you to undergo a medical check-up at a designated clinic. This medical test is free of cost for you and the report goes directly to the insurer.

The insurer will accept your proposal based on all the information you have provided and the medical tests.

Note: At times it may happen that the insurer may modify your term cover a little. Do not worry, it is not a rejection of policy but the modification reflects insurer’s perception of risk and benefit eligibility for you.

Once the insurer approves the policy you should check all the details and ensure that everything is in order.

Step 7: Claims & Claim Settlement

Term insurance plans from Canara HSBC OBC Life enjoy a quick and stress-free claim settlement process. Additionally, for the most part, your nominees can file the claim online.

Term Insurance Plan is More Important

The way you love your car, your family loves you. So, when you have insured your car, why not buy term insurance too for the sake of your loved ones. The best part is the cost of adequate term insurance cover for your family is less than the car insurance.

Speak to an insurance specialist now!

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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