Canara HSBC OBC Life’s online term plan, iSelect Star is one of the term plans which offer comprehensive coverage and numerous benefits. It is important for you to understand how these benefits will come to impact yours or your family’s life.
Thus, if you know how the plan works before buying, you can make better choices with the plan and make it work for your future needs.
The Two Parts to the Term Insurance
Any life insurance contract (investment), including the online term plan, has two phases of activities:
The policy purchase phase starts with your first application for the policy and continues until the claim event on the policy. Although, going by the process we go through the ‘policy purchase’ phase first, and only then claim events. But, to ensure that the policy works as per your needs you should understand the claim events first.
The claim events define the moment of truth for your life insurance investment. So, it’s important that you understand what defines a claim event for the insurance plan you are getting into.
More importantly, claim events are your needs. Thus, understanding your needs first will enable you to make better purchase decisions.
Identifying Your Claim Needs
With iSelect Star term plan, you can expect to meet the following claim needs:
You can also call these as the primary needs you’d want your insurance plan to meet. In all the four events your family will need two kinds of financial support:
Also, if you are an early investor you may want these benefits (sum assured) to grow as your family and income grows. iSelect Star term plan gives you two options to increase your benefit amounts as per your growth:
Providing a source of regular income to your family takes away a large burden of investing money from over their heads. It also, ensures that they don’t worry about their immediate basic needs and can focus on bigger life goals.
In short, fix their survival to help them thrive.
Additional Needs & Benefits in the iSelect Star Plan
While all the three basic needs are part of i-Select Star term plan, there are additional benefits you can use:
Selecting the Benefits in iSelect Star Term Plan
Now that you have identified most of your needs, let’s see how you can go on selecting these. Before we go ahead, it important to note that you need to select most of the benefits at the time of purchase. Your choices at the time of buying will define your future options.
Step 1: Selecting the Death Benefit & Check Premium Cost
Step 2: Select the Type of Cover You Want
If you choose a decreasing cover option in this step, you will not have the option to add other insurance covers in the next step.
Step 3: Add More Insurance Covers
In this step you have four options:
Step 4: Add a Cover for Spouse
Step 5: Select a Claim Pay Out Mode
Regular Income Pay-out Options:
Tenure for the regular income: Regular income from the plan will continue for a limited period only. Here you have two choices:
Yes, it is very much possible to calculate the income amount beforehand. Here’s how you can:
If you chose a level (fixed) income option.
Example: If you have chosen to turn 50% of your Rs. 1 crore life insurance into regular income. Your SA for regular income would be Rs. 50 lakhs. The monthly income from this sum assured would be Rs. 50,450 (=50 Lakh x 10.09 1000)
If you choose a 5% growing income
Example: If you want a growing income on Rs. 50 lakhs S.A. as in the previous example. Your family’s monthly income would be Rs. 41,700 for the first year, and Rs. 43,785 in the next and will keep growing by Rs. 2085 (5% of Rs. 41,700) every year.
If you choose a 10% growing income
Example: If you want a growing income on Rs. 50 lakhs S.A. as in the previous example. Your family’s monthly income would be Rs. 35,555 for the first year, and Rs. 39,105 in the next and will keep growing by Rs. 3555 (10% of Rs. 35,555) every year.
Choosing Return of Premium Option
If you want to receive all the premiums you have paid for the life cover at the time of maturity, you can choose the return of premium option. There are two options available with return of premium benefit:
Choosing Whole Life Cover
Whole life cover option may sound attractive, as the claim pay-out is certain even in case of natural death in old age. However, with whole life option, the additional riders are not available with the plan. Also, you do not get the regular income pay-out option for claims after the age of 60. The insurer will pay only a lump sum amount to the family.
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