The pandemic has struck many of us with lesser job security. It has made us vulnerable to the insecurities of life rather than exposed our vulnerabilities to the world, which can be exploited by anyone at any point in time. We can either consider it an opportunity and invest in a term insurance or let the time pass by and realise this mistake later in life, which will certainly amount to regret and guilt. Everyone in this world has been assigned some responsibilities. If you are a family man, then keeping your family's interests secured is your responsibility which you can be assured of by investing in term plan insurance.
What exactly is term insurance?
1. It is a policy which keeps the policyholder covered for life. In case of any emergency, this may include death, medical emergency, the insurer is bound to make the payment to the insured and avail all the assured benefits with the policy.
2. The premium payment of the same can either be periodic, or a lump sum amount is also an option, whichever the client finds viable.
3. Remember that if the insured person does not claim it in the given time frame of the policy, they choose to either forego the policy or extend it at some other premium rates.
What are the benefits of term insurance?
1. The choice of payment (periodical or lump sum) is the choice of policyholder.
2. In case of death during the term of the policy, the nominee is the one who can avail the benefits of the policy.
3. The policy's beneficiary can either choose to claim the amount in a lump sum or get a monthly payment.
4. The term insurance policies can be of some additional value as the policyholder can get tax benefits under the Income Tax Act 1961.
The premium paid for purchasing or renewing a term insurance policy can be claimed as a deduction by investors. Section 80C of the Income Tax Act allows you to deduct the premium amount from the total income, thereby bringing down the taxable amount. This, in turn, reduces your tax liability. In addition to this, the death benefits paid out to your beneficiaries are also exempt from tax, as per the provisions of section 10 (10D).
What is the term of the policy?
1. For term insurance, the policy duration ranges from 5 years at minimum to 25 years at maximum to the lifetime of the policyholder with monthly or periodical premium payments.
2. However, when single term policies are in consideration, then the duration ranges from 5 to 15 years, whatever the policyholder finds convenient as they have the liberty to choose for themselves.
What is the basic eligibility of the term insurance?
1. The minimum age of eligibility is 18 years.
2. The maximum age of eligibility is 65 years.
3. What needs to be remembered while buying any of the policies is that the premium of these policies keeps increasing with age, so, it is advisable to purchase term insurance plans at an early age to enjoy maximum benefits.
What if the policyholder keeps alive at the end of term plan?
1. Now, this is one of the flaws of life insurance policies as many of the policyholders survive the term and afterwards are not liable to claim any amount whatsoever.
2. At the same point of time this has been an attractive feature of the term plan insurance that even though they have a higher premium rate than the life insurance policies but the assurance of getting back the premium is what makes this term plan popular and successful.
How to browse the cheapest and safest term life insurance policies?
It can be quite a tedious task while choosing between the available policies because the insurance market has many players. Still, trust is what has kept many of the premium companies afloat whilst this competition.
Factors to be kept in mind while purchasing term plan insurance
1. The rate of premium becomes the most important feature as this is the money you will be paying to the insurer to keep you insured for life.
2. Added benefits – It adds a lot to the policy's credibility as this is what acts as an attractive feature that explains the relationship they establish with the customer.
3. Adding spouse – If there is an option to add your spouse to the same policy with discount rates, it can be a boon for you as you can have the maximum coverage of the policy.
4. Multiple premium payment options – It includes single bullet payment for the entire term or payment for a limited duration of 5/10/15/20/25 years or pay only during your working years, i.e. till you turn 60 years besides payment throughout the Policy Term.
5. Increasing the life cover – At different stages of life, you can make changes to your policy coverage through this feature.
6. Loyalty Discount – Being a loyal customer of the company calls for a treat. This feature is one way of showing gratitude towards the existing customers, which should be considered.
What are some of the cheap term life insurance plans?
Canara HSBC Oriental Bank of Commerce offer two-term insurance plans:
1. iSelect star term plan
2. POS – Easy Bima Plan
1. iSelect star term plan
- Plan Option Life
Under this Plan Option, in case of death or on the diagnosis of Terminal Illness, whichever happens, earlier, the Sum Assured on Death is payable. The policy terminates upon payment of the benefit. Both the Life Assured and the Spouse can be covered for the term of the contract, subject to the policy's terms and conditions.
- Plan Option Life with Return of Premium
Under this Plan Option, on the occurrence of death or on the diagnosis of Terminal Illness, whichever happens, earlier, during the Policy Term, Sum Assured on Death is payable. If you outlive the Policy Term, we will return the Total Premiums Paid by you at maturity. The policy terminates upon payment of these benefits.
- Plan Option Life Plus
Under this Plan Option, we will pay Sum Assured on Death on the occurrence of death or on the diagnosis of Terminal Illness, whichever happens, earlier. The policy terminates upon payment of the benefit. In case of survival till maturity, the Total Premiums Paid will be refunded to you on the date of maturity. Further, the policy will continue to post maturity until you attain 99 years of age, the Extended Cover Period. During this period, Sum Assured will be paid on the occurrence of death or on the diagnosis of Terminal Illness, whichever happens, earlier. On attaining age 99 years, the Sum Assured will be paid to you. The policy terminates upon payment of these benefits.
|Age at entry||18 years||65 years
For PPT Upto Age 60 years (Under Plan Option Life)# – 55 years
For PPT Upto Age 60 years (Under other Plan Options)# – 50 years
For Single Premium Option – 45 years
For Non-Working Spouse – 50 years
|Age at maturity||28 years||80 years
For Whole Life Coverage# under Plan Option Life – 99 years
For ADB / ATPD – 75 years
2. POS – Easy Bima Plan
Death Benefit Payable (other than accidental death)
During the waiting period, 90 days from the date of commencement: Return of the Total Premiums Paid. After expiry of the waiting period of 90 days from the date of commencement: 100% of the Death benefit summary. On payment of above Death Benefit, the policy shall terminate, and no further benefit shall be payable.
Death Benefit Payable (accidental death)
Accidental Death Benefit Sum Assured in addition to the Death Benefit Sum Assured. The waiting period of 90 days from the date of risk commencement is not applicable in accidental death.
On payment of above Death Benefit, the policy shall terminate, and no further benefits shall be payable.
Note: Accidental Death Benefit Sum Assured is equal to Death Benefit Sum Assured.
For details on Accidental Death Benefit, please refer to the terms and conditions under this plan.
Return of Premium on date of Maturity
On survival until maturity, the Total Premiums Paid return shall be payable, provided the policy is in force.
Canara HSBC Oriental Bank of Commerce Life Insurance policies are well set to qualify the standards and parameters that any interested buyer would be looking for.