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Which cheap term life insurance gives best returns?

dateKnowledge Centre Team dateFebruary 03, 2021 views165 Views
Which cheap term life insurance gives best returns?

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.

Parameters Minimum Maximum
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.

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TERM Insurance PLAN

TERM Insurance PLAN

Whole life cover option available

Increase your life cover with changing life stages

Return of premium & in-built protection options

Multiple premium payment options

Avail tax benefits on premiums paid as per tax laws

ULIP PLAN

Unit Linked Insurance Plan

8 funds and 4 portfolio strategies to invest

Loyalty additions and wealth booster

Return of Mortality Charge is available on Maturity under all three cover Options

Flexibility of switching between the fund options to take benefits of market movements or change in risk preference

Pos Easy Bima Plan

Top Benefits

Hassle free

Get double life cover in case of accidental death

Choice of flexible premium payment and policy term

Avail tax benefit on premium paid

Frequently Asked Questions (FAQs) for Term Insurance

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 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?
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