What is a Term Insurance Plan?
Term Insurance, as the name suggests, provides coverage for a specific time, also called term. In this case, if there is an unfortunate demise of the insured during the policy term, the nominee is offered financial benefit also called death benefit. This sum of money helps the nominee to:
- Keep up with their monthly living expenses
- Pay off financial liabilities (if any) like a house or a car loan
- Invest in their life goals such as children’s education and marriage
Generally, Term Life Insurance policies offer high life cover in return of lower premiums. The frequency of the premium payment for the insurance plan can be paid at once or at regular intervals. In every insurance, the premium amount varies depending on factors, including the payment method opted by the insured.
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Pramerica Life
RockSolid Term Insurance
- Guaranteed RockSolid protection throughout the policy term
- Option to pay premiums once, for a limited period or throughout the policy term
- Option to enhance your protection cover against death, disease, and disability through riders
Pramerica Life
Saral Jeevan Bima
- Flexibility to choose Single Premium, Limited Premium (5 years or 10 years) or Regular Premium
- Secure family’s future at a nominal cost
- Avail tax benefit as per the prevailing tax laws
Who should buy a Term Insurance Policy?
Any individual with financial dependents should consider purchasing a Term Life Insurance Policy. This is a broad category that includes people from various backgrounds, such as SIP investors, self-employed individuals, business owners, married couples, young professionals, etc.
Term Insurance Policies offer benefits to taxpayers in terms of tax savings and protection. The insurance premiums paid are deductible from taxable income under Section 80C of the Income Tax Act, 1961. Some of the potential groups that could benefit from Term Insurance are outlined below:
Parents play a crucial role in providing for their children's needs, including education and living expenses. However, unforeseen events can jeopardise their financial stability. A Term Life Insurance Policy offers a dependable solution by providing a lump sum or monthly payout to ensure that the essential needs of their children are met even in the parents' absence.
A thoughtful and enduring gift for newly-married couples is financial security through Term Insurance. In case of an unfortunate event, this insurance ensures the surviving spouse's financial well-being, enabling them to navigate life's challenges without worrying about financial stability.
In today's world, women are active contributors to their family's financial well-being. Term Insurance becomes paramount to guarantee the family's financial security if something were to happen to the woman. It not only ensures the financial support of children or parents but also help fulfill existing liabilities like education, auto, or home loans.
Young professionals often face financial stress while striving to establish themselves in their careers. Term Insurance offers a stable financial future by keeping premiums consistent throughout their lives, providing peace of mind and a foundation for financial security, especially during uncertain times.
Opting for Term Insurance can also yield tax benefits, as premiums are deductible under section 80C of the Income Tax Act, 1961. Moreover, the maturity amount is exempted under section 10D, significantly reducing the tax burden while ensuring financial security for loved ones.
Self-employed individuals face financial volatility due to irregular income and potential business loans. Term Insurance acts as a crucial safety net, ensuring the financial stability of their families even in challenging times. It offers peace of mind and a reliable plan to secure the future.
Systematic Investment Plan (SIP) investors rely on consistent investments to build wealth. Term Insurance safeguards this investment by ensuring regular asset provision to the nominees in the event of the investor's unfortunate demise, maintaining the flow of investments and securing financial futures.
Even in retirement, Term Insurance plays a vital role. It can be a means to leave a lasting inheritance for your family, ensuring their financial security and well-being. This financial cushion ensures peace of mind for retirees, knowing their loved ones are taken care of.
Features of a Term Insurance Plan
A reliable Term Insurance Plan is synonymous with financial security and a well-planned future. Below, you will find some essential features of a Term Insurance Plan:
Affordability
Affordability is a cornerstone of Term Insurance Plans, with competitive premium costs.
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Long Policy Term
These policies offer long durations, allowing you to purchase coverage from the age of 18 and extend it until you reach 99 years of age.
Easy Purchase
Purchasing a Term Insurance Policy is a hassle-free process that can be completed both offline and online.
Flexible-Premium Payment Options
Term Insurance Plans offer flexibility in premium payments, which can be made in a lump sum or over several years, such as 5, 10, 15, etc.
Add-on Covers
You can enhance your policy with various additional insurance covers and benefits, including accidental death and disability cover, critical illness cover, and child support benefits.
Payment Modes
Term Insurance Plans provide death benefit payments in various forms, including a lump sum, regular monthly income, or a combination of both.
Low entry age
You can start securing your loved ones' future by purchasing a Term Insurance Plan as early as 18 years of age.
Long term protection
Term Insurance Plans offer protection for you and your family with policy tenures extending up to 40 years.
Easy to buy
The process of buying Term Insurance is straightforward and efficient. You can easily compare different plans and features to select one that aligns with your financial needs and goals. The purchase process allows you to submit all the required documents from the comfort of your home.
Benefits of buying a Term Insurance Plan
An effective Term Life Insurance Plan protects you and your family members, providing a financial cushion even in your absence. It is never too late to purchase your policy and pave the way for a financially secure future.
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Financial Protection
One of the most significant benefits of Term Life Insurance is the financial protection it offers. In the event of your untimely death, it provides a financial cushion to your loved one. This comes in the form of a death benefit to your dependents, helping bridge the gap in their expenses.
Protection against Critical Illnesses
Term Insurance offers various payouts in the case of critical illnesses, including conditions such as kidney failure, brain damage, and more. The plan offers several riders that can be added based on your financial requirements and goals. Before purchasing your term insurance plan, it is essential to check if it also provides protection against terminal or critical illnesses.
High Coverage at Affordable Premiums
Every family has its own financial goals and lifestyle. In the event of the early demise of the primary breadwinner, the family's spending habits may become unstable. Term Insurance Plans come to the rescue in such cases, offering high coverage in case of the insured's untimely death. This higher coverage comes with affordable premiums. To secure lower premiums, it is advisable to start early, as the premium amount is highly dependent on your age.
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Financial Support for Disability
Term Insurance Plans also provide support for total and permanent disability due to an accident. This is an add-on cover that helps you maintain financial stability, even if disability leads to reduced earning prospects.
Tax Advantages
Term Insurance Plans usually offer a regular income option. Under this, you receive the entire sum at the policy's expiry if you survive. This typically begins after the age of 60 and pays you as a regular monthly income.
The right time to buy a Term Insurance Policy
The right time to buy a Term Life Insurance Policy is as soon as possible. As you age, the chances of developing diseases increase. Additionally, your insurance costs also rise with age, resulting in higher premiums.
If you purchase an insurance plan at a young age, you can enjoy several benefits. The primary advantage is an affordable premium. Therefore, it is advisable to invest in your Term Insurance Plans when you are young. This will help you save a substantial amount of money in the long run and prepare a financial cushion for times of need. Furthermore, you have the option of extended coverage, enabling you to provide financial security to your loved ones from an early age.
What should be the duration of your Term Insurance Plan?
The duration of your Term Insurance Plan signifies the period of financial protection that you and your family will receive. Every family has various financial goals, and the duration of the Term Plan depends on these goals. To maximise the benefits, it is advisable to opt for the longest available duration. Additionally, several factors should be considered when deciding the direction for your Term Life Insurance Policy.
Your Financial Liabilities
Financial liabilities play a significant role in determining the policy's duration. For example, if you have a 15-year loan, the policy's duration should match the loan term.
Family Dependents
The number of dependents in your family is related to your financial goals and, subsequently, the policy's duration. Since Term Insurance helps your dependents cover their living expenses in your absence, it's a crucial consideration. For instance, if you are the sole breadwinner, opting for a longer duration is advisable.
Large One-Time Expense
Unexpected expenses may arise in the future. Your family's financial status plays a crucial role in deciding the duration. For example, if your child is eight years old, you should choose a duration that covers their wedding or higher education. In such cases, a Term Insurance Pplan with a duration of 20 to 25 years may be suitable.
Age
Age is another crucial factor in determining the duration of your term insurance policy. For instance, if you are currently 25 years old and have a 10-year policy, it will expire at age 35, leaving the later part of your life uncovered. Therefore, starting at a young age and opting for a longer duration is advisable.
How to choose the best Term Insurance Plan?
Factors that impact Term Insurance Premium
1. Age
2. Gender
3. Profession
4. Duration/policy term
5. Medical History
6. Smoking/Drinking
7. Personal health
What is a Term Insurance rider?
A Term Insurance rider offers various add-on covers that can be purchased in addition to the base plan. Riders come at an additional cost on top of the premium and can be chosen based on different needs and preferences. There are several types of riders, as outlined below:
Accidental Total and Permanent Disability Rider
In this condition, the insured becomes incapacitated and is unable to earn an income from any work or occupation for the rest of their life. The rider provides an additional benefit amount to the policyholder. Typically, there is a waiting period (usually 180 days after the accident), after which the insured can claim the rider's sum assured.
Waiver of premium
The waiver of premium rider waives premium payments if the policyholder becomes physically impaired, critically ill, or seriously injured. Additional conditions may apply, such as meeting specific health and age requirements. To activate this rider, a specific waiting period is typically required. The waiver of premium allows the redirection of funds towards living expenses, palliative care, and personal finances.
Critical illness cover
If you are diagnosed with any critical illness, such as kidney failure or lung-related problems, you are covered under this rider. For a comprehensive list, please refer to the policy document. The treatment for such diseases can be financially draining. Therefore, opting for the Critical Illness rider can be beneficial in the long run. This rider's availability and covered ailments may vary from insurer to insurer. It can be purchased at the inception of the policy or in any subsequent policy year of the base plan, either with regular premiums or as a single premium.
Accidental death benefit
Under this benefit, your family is covered in the event of accidental death. In the unfortunate event of an accidental death covered under the policy, your loved ones gain access to a significant death benefit amount.
How to buy Term Insurance?
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1
Estimate Your Sum Assured
To initiate the process of purchasing Term Insurance, analyse your financial needs and visit the website to calculate the premium. You will find a calculator that requests your basic information, including your name, age, contact information, smoking habits, annual income, etc.
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2
Choose Your Benefits & Get a Quote
When purchasing your Term Insurance, you can select from various benefits, such as different payout options, critical illness benefits, and more.
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3
Fill the Details & Pay the Premium
After making your choices, you can provide additional details and submit the required documents. This will complete your application to buy a life term insurance policy.
A knowledgeable you is an informed you
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Why choose Pramerica Life Insurance?
99.18% Claim Settlement Ratio
Individual Death Claim Paid Ratio as per audited financials for FY 2024-25
134 Branches PAN India
As reported on Mar 2025
Over 5.2 Million Lives Secured
As on September 2023
Disclaimers:
*Individual death claims settled and reported in public disclosures for FY 2022-2023
^ As on 31st September 2023
