Term Insurance

Term insurance is a pure protection insurance plan. Whereas, whole life insurance offers wealth creation and distribution benefits too. Term insurance offers large protection benefits at affordable rates and does not acquire cash value over time.

Whole life insurance offers life cover and cash benefits at retirement. A term plan is a pure protection plan while whole life insurance will be an asset.

The policy conversion feature is not available in term life policies in India. So, you may not be able to convert your standard term life policy to whole life. But, you can check with your insurer if that option can be worked out.

Term life insurance is one of the essential investments in your financial life. The term insurance cover helps you provide adequate financial safety to your family and dependents for a long time. The best part about term insurance is the affordability. For example, if you are a 30-year-old non-smoking male, you can secure Rs 1 crore term insurance for less than Rs 1000 p.m.

Ideally, your term insurance policy should last a few years into your retirement. This ensures the financial safety of your spouse while you wind up your liabilities and settle into retired life. If you expect to have dependents even after your retirement you can also consider that in the policy term while buying. Policies like whole life term insurance plan iSelect Smart360 Term Plan can also help you leave a legacy.

No, the duration of life covered in a term policy cannot be changed after the policy has been issued. However, if you are still in the 15-day cooling-off period you can request a change in the policy term. If the insurer agrees you can return the current policy document and receive the new policy.

The best term plan for you would be the one which has all the necessary features and is easy to manage for you and your family both. A good claim settlement ratio of 95%+ means the family will receive the claim faster. So, you can look for the following for the right term plan for yourself:

You can also check for an electronic insurance account. This account makes policy management and claims filing a cakewalk as you can assign family members for the same.

Ideally, the term insurance cover for your family should last so far as you have a liability or pending family goal. Since you cannot extend the policy term after purchase, you should purchase the policy with a term lasting a few years after retirement. For example, if you are expecting to retire at 65 the term insurance cover can continue till 70.

Yes, you can buy a term plan in the 50s and even 60s. You can buy the iSelect Smart360 Term Plan till the age of 65. Buying a term plan after 65 will be difficult as fewer insurers offer such policies.

A standard term insurance policy will simply expire without any cash payments on maturity. However, if you had opted for term insurance with a return of premium the policy will return all the premiums you have paid upon expiry.

Yes, upon the demise of the insured within the policy term the insurer pays the full amount as a death benefit. However, if you had chosen lump sum plus regular income pay-out, the amount dedicated for regular income will be paid as a monthly sum. Thus, with the regular income option of death benefit release, the insurer will convert the sum to a regular monthly income. Monthly income can be fixed or growing as chosen while buying the policy.

The best term insurance plans including the iSelect Smart360 Term Plan allow you to have a term life cover up to the age of 99. However, in the case of single premium policies, the maximum age can be lower. For example, the iSelect Smart360 Term Plan offers to cover up to the age of 80 for single premium policies.

No, the policy term cannot be extended after the policy has been issued. However, if you are still in the 15-day cooling-off period you can request an extension of the policy term. If the insurer agrees you can return the current policy document and pay the additional premium to receive the new policy.

No, you cannot sell or mortgage your term life insurance policy. Term life policies do not acquire a cash value as these are pure protection plans. This means, you only pay the risk premium and nothing is accumulated as policy value. Thus, the policy will not have any sale value. Also, life insurance coverage cannot be transferred. A term life insurance policy can be assigned to a lender for repayment of a loan after your demise.

Yes, you can have two or more term insurance policies. However, your total life cover may not exceed 20 times your annual income. There is no restriction on the number of policies you can buy, but total life cover is limited by your financial status. Generally, the insurer will consider your annual income, but your net worth also plays a role in deciding your maximum insurance eligibility.

Yes, term life insurance covers natural death or any other cause of death. Only in the case of suicide, the death is not covered for the first 12 months after policy commencement or revival. Also, in the cases of homicide (criminal activity), the death benefit may not be paid unless the nominees are exonerated by the court of law. Accidental deaths may require a police FIR.

A critical illness rider is a health insurance rider in the term insurance plan. It offers insurance cover for dangerous illnesses like cancer, renal and heart failures, stroke, etc. Critical illness rider of iSelect Smart360 Term Plan covers 40 critical illnesses and disabilities. It is an important add-on to your term insurance as it helps you get treatment for these illnesses. The rider also has features to support your household expenses while you recover.

Term insurance is a pure protection life insurance. Thus, does not have a cash value or maturity value. Only your nominees can use the term insurance proceeds to repay any ongoing loans. However, you can assign a term policy to a lender. In the case of assignment, the lender is the primary beneficiary of the policy benefits. Your nominee will receive the proceeds after the lender’s balance has been satisfied.

You can always change the nomination of your term insurance policies. So, if the nominee dies before you, you should immediately update the nomination details. In the case of the death of both nominee and policyholder, your legal heirs must claim the policy proceeds. In the case of zero nomination, the policy proceeds must be distributed as per the applicable succession laws.

You can change the nomination as many times as you want. The latest nomination update nullifies all the previous nominations. It’s better to nominate only your family members and blood relatives as beneficiaries in your term plan. Keep the nominee details updated so that the benefits reach only the intended party.

You should contact the insurer as soon as possible after the death or other claim event. You will need to furnish all documents to file a claim. The documents for any claim will vary as per the cause of the claim or death. Collect all the documents and submit them along with the appropriate claim settlement form. Insurers like Canara HSBC Life Insurance will assign a claims officer for you. The claims officer will help you in completing your claim process and receive the benefit amounts.

Generally, pure protection term plans only offer financial safety to your family, in case of your early death. Term insurance will not provide any wealth generation opportunities. However, the whole life term plan option of iSelect Smart360 Term Insurance offers wealth creation benefits as well. You can receive a sum of 60 equal to all the premiums paid or a regular income.

If you are salaried and have a steady cash flow, the regular pay option is better. However, if you are into business or self-employed, the limited pay option will work better. The limited pay option helps you maintain the life cover even during tight financial situations. So, a bad economy will not put your family at the risk of financial hardships if anything happens to you.

You should check the policy details within 15 days of receiving the policy document. Check your name, contact details, address and bank details. You can easily get them rectified within these 15 days. This period is called the cooling-off period and you can ask for corrections if any. After the cooling-off period expires you may not be able to change critical policy details like the name of the insured and other details. However, you can still ask to update your bank and contact details.

Yes, with term insurance plans like iSelect Smart360 Term Plan, you have two types of regular income options:.

1. Regular income payment of death benefit
2. Regular income payment after 60

In the first option, your family will receive a part or full death benefit as regular monthly income after your demise. In the second, you will start to receive a regular monthly income if you survive till the age of 60.

Yes, term insurance policy claims are not affected by the place of death. The life cover in a term insurance policy applies 24x7 and throughout the geography. Except for the excluded events such as suicide within 12 months of policy commencement or revival. Thus, if the insured dies in a foreign country the term cover will still offer the benefits.

Death by suicide within 12 months of policy commencement is not covered by term insurance. Also, if a lapsed policy has been revived, suicide within 12 months is not covered. This provision of term insurance is called the suicide clause. This is the only exclusion in the term insurance cover.

Yes, NRIs can buy a term insurance plan in India. You should not be a green card holder or hold citizenship in a foreign country. You should be healthy and work at a recognised organisation or professional. You can buy term insurance while visiting India and complete the formalities as NRI. This is the best option as all your formalities will be completed as a resident Indian. This process is faster. However, you can also obtain term insurance from your country of residence online. In such a case, you need to submit all the documents the insurer requires. You can submit the documents online or through the mail.

Standard term insurance policy will never acquire a cash value as you only pay the risk premiums. However, if you have bought a whole life term policy or term plan with a return of premium option, these policies will acquire cash value.

However, you should avoid cancelling older policies for their cash value. Instead, you can borrow up to 90% of the cash value of these policies.

If you have a standard term insurance plan which offers only a life cover you can cancel the term plan if:

- You have acquired enough wealth
- You do not have any dependent
- You have met all the financial goals of your family and dependents

If you believe that all these conditions apply to you, you can stop paying the premiums for your life cover. However, if you have a term plan with a return of premium or whole life cover you should continue the plan. The maturity benefits of these plans far outweigh any cash value you can receive by a cancellation.

You should keep the insurer informed about the change in smoking habits. This is important especially if you have started smoking after buying the policy. This will avoid claim rejection in the future. However, you can be assured that your premium rates will remain unaffected under such a lifestyle change.

Yes, the iSelect Smart360 Term Plan covers all types of deaths including accidental, natural or illness related, provided the death occurs within the active policy period. The only death that the policy does not cover is suicide within the first 12 months of commencement of the policy. The suicide clause also applies at the time of the revival of a dormant policy.