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Term Insurance
How To Choose A Nominee For Your Term Plan?
A term insurance plan is one of the most important financial investments in your life...
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Buying an insurance product like an online term plan is the easiest and fastest way to secure the financial future of your loved ones. An online term insurance plan protects your loved ones from financial hardships in the event of your untimely demise. The premiums of a term plan online are comparatively lower.
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An online term plan is a pure protection plan that you can buy directly from the website of the life insurance company. It offers a life cover along with a range of other benefits to help you secure the financial future of your loved ones in your absence. Unlike regular life insurance plans, you do not need to engage with an agent when buying a term plan online. The majority of insurers allow a completely paperless process.
Term insurance plans are a type of life insurance plan designed to offer adequate financial safety to your dependents. These plans offer a large sum as an umbrella cover. The sum will be available to your family and dependents in the case of your death within the policy term.
A term insurance plan is an affordable life insurance cum protection plan that you should buy as soon as you start earning. The younger you start, the better it is – as, premiums of a term insurance plan increases with age.
This is the first question you should try to answer before generating term life insurance quotes online. Your cover amount should help your family meet the following expenses after your untimely demise:
Generally, an amount 10-15 times your annual income is sufficient for your family to maintain their standard of living and meet their financial needs. However, you can add or subtract depending on:
(+) The other financial needs you have apart from the three
(-) Existing life insurance cover
Another important factor is the policy term for the life cover. The minimum term for which your family will need an umbrella is till your retirement age. For example, if you are 30 years now, your family needs a life cover for the next 30 – 35 years.
By the time of expiry of the online term plan:
Still, you can consider a term plan till the age of 99 if you wish to leave an estate for your children or grandkids.
You are considering an online term policy so that your family can survive and remain financially independent even if something happens to you before time. Although receiving a large sum of money sounds like a good start, you can ease your dependents’ financial troubles even further.
Your family will need to look after two types of financial decisions:
You can divide the benefit amount of your term insurance plan in such a way that your family receives a small sum every month as regular income and a large lump sum. With their regular income need taken care of, they can simply use the lump sum for their future and pay off their debts.
A life insurer’s track record is going to have a long-term impact on your policy. Remember that term life insurance plans are long-term plans which may continue for decades before you or your family will even need them.
You have to pay attention to how the insurer engages with their existing policyholders:
All of these options and channels will help you continue your term insurance plan for decades without hiccups.
The proof of concept for an insurance policy only shows up at the time of claim. An insurer with a robust claim settlement ratio means the insurer has a smooth claim settlement process. This means, your family is more likely to have an easier time with the insurer while making a claim.
Canara HSBC Life Insurance has maintained a 95%+ claim settlement ratio for more than 5 years, with the current ratio being 98.57% for FY 2021-22.
A term insurance plan is supposed to offer adequate financial safety for your family over a few decades. Thus, you must look at the necessary features which would keep the policy beneficial for the longest period:
The longer the better, with the minimum limit allowing you to hold the cover for at least five years after retirement.
You can do away with a lifetime of regular payments and even get a discount on premiums by paying them in a shorter time, provided the policy offers the feature.
The death benefit from a term insurance plan should help your dependent look after their lifestyle and goals. The regular expenses related to lifestyle are the most difficult to manage. Thus, regular income mode of death benefit pay out helps the family more.
Your financial needs and responsibilities will only grow in life, at least, until you retire. Thus, your online term insurance plan should have an option to increase the cover as your needs grow.
You only need to submit digital copies of the relevant documents while buying online term plans. Although you can save the online form and come back to complete it later, it's best to complete it in one go and secure your term cover sooner.
Here’s a list of documents you should keep handy while buying an online term plan:
Always have a look at the add-on covers available with the online term plan. These added covers or riders strengthen your term cover umbrella and offer wider coverage to your family. Some of the most prominent riders to add to your online term plans are:
Provides financial assistance in a lump sum and regular income mode if you are diagnosed with a life-threatening illness like cancer, etc.
Learn more about Critical Illness Insurance.
Accidental riders offer additional financial assistance in the case of death by accident. These riders are available in the following forms:
If you met with an accident and suffer from a permanent disability, all future premiums for your term life cover will be waived off.
The insurer will pay the selected sum assured in the case of accidental permanent total disability to you. A similar additional benefit can be added to the death benefit under term insurance for death due to an accident.
Apart from critical illness and accidental riders, term insurance plans can have few other riders. These riders can allow you to pass on a financial benefit to specific family members, for example, children.
iSelect Smart360 Term Plan is an online term plan from Canara HSBC Life Insurance. The plan offers many amazing features without compromising on the primary benefits of a term insurance plan.
The online term plan from Canara HSBC Life Insurance, iSelect Smart360 Term Plan, offers terminal illness as a default cover. That means you can file a claim in the plan if you are diagnosed with a life-threatening disease in its terminal stage.
You can add your employed or homemaker spouse under the same plan. This allows you to maintain a dual umbrella cover for your family, and value the support of your spouse with a life cover.
The plan offers a rider that ensures a lump sum benefit to your child. This benefit payment is dedicated to the future goals of your child. The family has to use this benefit amount as such in the case of your early demise.
Your financial needs and responsibilities will grow as your family grows. iSelect Smart360 term plan allows you to increase your term cover sum assured to maintain an adequate safety umbrella for your family. You can block your premium rate for the next five years and grow your term cover up to 100% upon your marriage and childbirth.
You can divide the death benefit pay out between lump sum and regular income payments. Regular income payment ensures a tax-free regular income for your family. You can also choose a growing income to provide a cover against inflation.
You can buy iSelect Smart360 term plan coverage for up to 99 years of age. The plan offers two options for you to continue your term life cover for up to 99 years of age. Both options allow premium payments to stop at retirement.
You can also opt for a return of premium option under the online term plan iSelect Smart360 Term Plan. The return of premium option will ensure that you receive all the paid premiums for the policy if you survive the policy term.
iSelect Smart360 term plan also offers a feature where you can receive a regular monthly income as a survival benefit. The policy will start paying the benefit once you attain 60 years of age. Thus, supporting your financial safety after retirement.
Special Exit Value is a unique feature available under the iSelect Smart 360 term plan’s Life Secure Option. This feature is available if your policy term is 40 years or more but your age at maturity of the policy is less than 85 years.
This option allows you to receive almost all the paid premiums for the cover if you decide to surrender the cover before maturity.
Even though online term plans have the simple purpose of offering long-term financial safety, you still need to select a suitable plan. Important features and benefits of the plan must align with your family’s financial planning.
Your life stage and family members whether dependent on you or not, have a huge impact on your term insurance policy.
Your term life cover has to be sufficient to support the regular expenses of your family if you go away too soon. The regular expense need will define the share of your term life cover which will be converted to a regular income for the family.
For example, iSelect Smart360 term plan lets you divide the total sum assured for lump sum and regular income payments. You can select ratios for lump sum and regular income payments from 25% / 75%, 50% /50 % or 75% / 25%.
Your income is another factor you should consider, and not just the current income. While buying an online term plan, you should keep in mind your financial situation a few years ahead:
Your long-term liabilities like a home loan, car loan with more than three-year tenure, etc. can add to the financial burden of your dependents after you. However, you can add these liabilities directly to your term cover to safeguard your family from them.
Buying an online term plan involves completing your application process for the plan proposal online. Here is the step-by-step process of how you can buy an online term insurance plan:
It is absolutely safe to buy an online term plan. The insurance company websites follow the highest online security protocols for allowing safe online transactions.
Online term insurance plan premiums depend on the mortality rates for the age. Usually, the mortality rate increases with age, especially after 60. Additionally, the risk of illnesses and injury also increases with age. Thus, premiums of a term life insurance may increase anywhere from 4% to 12% every year increase in age.
Thus, with higher age, your premiums may increase considerably for the same sum assured amount. However, you can lock your annual term insurance premium at a lower rate if you buy the cover during your younger years. This is why buying a term plan at a younger age is financially more beneficial.
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Read ArticleYes, the premium you pay for the online term plan is eligible for deduction from your gross total income of the year under section 80C. The maximum deductible premium amount will be limited to the section 80C limit as defined by the annual Union Budget.
Read MoreYou will need to submit the following documents while buying a term plan online:
Smoking and drinking are lifestyle habits that may increase your risk of getting a life-threatening health issue. Thus, smoking has a direct impact on your base premium cost of the policy. Drinking habits may affect the premium only if you are a regular consumer of alcohol.
Read MoreYes, you can buy any amount of term insurance plan online, provided you are eligible for it. Your maximum eligibility for a term life cover depends on your annual income. The maximum term insurance cover for you can go up to 25 times your annual income.
Read MoreAn online term insurance plan will cover all deaths, except for the suicide death within 12 months of the policy inception. If you have added riders like accidental death or disability in the policy, these riders may not work in certain other cases as well.
Read MoreThe online term insurance calculator is a free online tool, which lets you assess your online term plan premium for various features and policy terms. You can modify different benefits and premium payment terms to arrive at the most suitable premium vs benefit combination for your family before filling out the application.
Read MoreCritical illness rider is an add-on cover available with your online term plan. With this rider you can:
This rider ensures that you have adequate financial support to fight dreaded diseases and manage your household while you are at it.
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