Term Insurance is the purest form of life insurance plans and because it’s a pure risk cover, the premium is the cheapest amongst all categories of life insurance products. Term Plan enables you to secure your family financially and family feels financially secure and independent in your absence. Under Term Plan, a high amount of Sum Assured / Life cover can be secured by paying relatively lower premium.
The family / nominee of the life insured gets the lump-sum amount in the unfortunate case of demise of the person insured during the policy tenure. There are options to receive the sum assured as lump sum or in monthly installments.
Few additional riders such as Critical Illness Cover, Waiver of Premium Cover, Personal Accidental Cover etc. are also available over and above the base plan.
The Sum Assured can be decided basis the following parameters:
Present Earning
Potential Future Earning
Existing Liabilities such as Home Loans, Business Loans etc.
The whole idea is to secure that your family is able to enjoy same status of living, as you were able to provide them.
There are pre-defined critical illnesses which when it strikes, can place a huge financial burden on your family, one on account of treatment cost and two on account of loss of working days. This cover can help you tide over this financial burden.
Paying of premium year on year basis can turn out to be a burden in case of disability. Under this cover, the future premiums are waived off and policy continues to be in force in case of permanent disability caused due to an accident.
In case of death due to an accident, the sum assured chosen under this rider is paid to the family / nominee. This is over an above the base sum assured and this rider can significantly enhance the coverage at very affordable rates.
The Term Plan can also be bought under Employer-Employee Relationship and the premium so paid is a deductible expense under section 37(1) of the Income Tax Act, 1961.
Even otherwise, the premium so paid is allowed as deduction under section 80C and 80D of the Income Tax Act, 1961. These deductions / exemptions are subject to section 10(10D) of the said act.