Frequently Asked Questions
Below are the FAQs you must go through to know about general questions on Term Insurance
Term insurance is a legal agreement between the insured (you) and the insurer (insurance companies) where death benefit is provided to the nominee if the life insured dies during policy tenure. Normally a term insurance provides a sustancial life insurance cover at an affordable premium.
-A term insurance provides substantial life insurance cover at an affordable premium
-The sum assured helps your family members to live the same standard of living in your absence.
-It gives you peace of mind by ensuring your family will have financial support even when you are not there.
-Term insurance plans provide a substantial life insurance cover at affordable premiums
-Premium paid towards term insurance provides tax benefits under section 80C up to Rs. 1.5 lacs.
-The sum assured your family receives is also tax free.
The thumb rule for deciding the cover of your term plan is that it should be at least 20 times your annual income. For example, a person earning ₹5 lakh annually must have a term policy of about ₹1 Crore for adequate support to his family after his death.
One can enjoy a tax benefit of up to ₹1.5 lakh under Sec 80C from the taxable income for paying the premium of the term insurance plans.
The proceeds received from a term insurance plan after the demise of the policy holder is also tax exempt under section 10(10D).
Yes, you can always buy term insurance from two separate companies. Both the insurers from which you’ve purchased term insurance plans are liable to pay claim to the nominee in case of the policyholder’s demise during the policy period.
The Married Women’s Property Act or the MWP is a legal safeguard available to protect the financial interest of a dependent wife, children or both in case of sudden demise of the policyholder. The MWP Act is applicable on term insurance and life insurance policies to ensure that the sum assured is protected for use of only wife/child/children or both (wife and children) and no other liability (loan payoff, debt payoff, joint family rights etc. ) is attached to this sum.
At the time of buying the policy you need to fill a separate form for MWP. Once a policy issue under MWP Act, beneficiaries cannot be modified or changed.
Natural disaster or war / war like situation.
Participation of criminal & hazardous or extreme sports activities.
Misrepresentation or suppression of facts at the time of signing.
Death occurred due to Drug, Alchol abuse or Sexually Transmitted Disease.
Death by Homicide if the perpetrator happens to be a nominee.
Suicidal death not covered within 12 months from the purchase of policy.
1. Level Term Plans.
2. Increasing Term Plans.
3. Decreasing Term Plans.
4. Return of Premium Term Plans.
5. Convertible Term Plans.
Many Term insurance plan offer riders to the policyholders. Opting for riders enhances the value of your coverage. It is an additional protection layer for your long-term security. Moreover, analyze your needs before investing in riders.
Corporate Insurance plans provided by the insurer can prove beneficial. However, these covers are often not sufficient and you need a higher sum assured for your family’s security. In addition, the corporate insurance cover from your employer is discontinued once you stop working for them.
Yes. Term insurance, once in effect, entitles the nominee(s) of the person even if she/he has died outside India.
A life insurance policy includes maturity benefits while a term insurance plan includes no such benefits and simply entitles the nominee(s) of the policy holder to the sum assured in the event of the policy holder’s demise during the term of the plan.
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