How Term Insurance Policy works?
Let’s understand how a term plan works with 2 examples
We spoke to some term insurance plan customers and here is what they had to say13:
Let’s understand how a term plan works with 2 examples
Aryan is a 30 year old healthy male
Gets a term plan of 1 crore with return of premium till the age of 60 years
Pays his monthly premium of Rs.248919 till 60 years
At the end of policy term, he gets back20 Rs. 10,98,684
Trisha is a 33 year old female
Gets a term plan of 1 crore along with critical illness rider cover of 20 lakhs, Policy term for 20 year & Premium paying term for 20 year
Starts paying a monthly premium of Rs.1511
After 8 years she is diagnosed with breast cancer
The amount of 20 lakhs is paid out to cover cost of treatment
The term plan cover of 1 crore continues
Check the available plan and calculate your approximate premium online.
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Enhance your cover by adding riders to your sum assured, then compare your online quotes to find the best plan for your needs.
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Complete the online application form by providing the necessary details and uploading a few documents for verification. After that, our team will schedule a medical test for term life insurance.
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Submit the application and pay the premium amount.
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When purchasing a term insurance plan, several factors determine how much you’ll pay in premiums. Here’s are some major factors that influence your premium amount:
Age is one of the most critical factors affecting term insurance premiums. Younger policyholders pay lower premiums because they are considered lower risk. When comparing it with adults, the premium rates to pay might be slightly more due to health concerns.
Statistically, women have a higher life expectancy compared to men. To account for this, insurance providers calculate lower premium rates on term plans, as they are expected to remain insured for a longer duration. This pricing reflects their increased life expectancy, making women term insurance an attractive option for women.
Your personal and family medical history are important factors in setting your premium. If you have a history of chronic conditions such as diabetes, heart disease, or hypertension, your premiums may be higher. Full disclosure of your medical condition guarantees you get the best coverage.
High-risk lifestyle activities, such as smoking, binge drinking, or participating in extreme sports, might increase your premium. Because these activities increase health risks, insurers raise premiums to cover possible claims. Being open about your lifestyle facilitates easy claim settlements in the future.
Your work profile also influences your premium. If you work in a hazardous environment, such as mining, aviation, or offshore drilling, your insurance premium will most certainly be greater than someone in a low-risk employment.
Riders are optional add-ons that boost your term insurance coverage. Benefits like accidental death coverage, premium waivers and critical illness benefits add to your base policy while slightly increasing your premium. Choosing riders intelligently offers a well-rounded protection plan.
Regular use of tobacco or alcohol is associated with serious health concerns, which is why insurers charge higher premiums for people who consume tobacco or alcohol. Declaring these habits upfront helps with getting the correct coverage while minimizing problems during claim processing.
The sum assured, or the payout your dependents will get in the case of your death, has a direct impact on the premium. A higher sum assured results in a higher premium, so it's critical to choose an amount that offers adequate financial security for your family.
The policy period of the insurance plan determines the premium amount. Longer coverage durations often result in higher overall premiums. Many policyholders prefer continuing their coverage until they are 85 years old, but the best term depends on your financial goals and commitments.
Term insurance plans include several payment alternatives, including single premium, limited pay option, and regular-pay. A one-time premium payment is larger initially but eliminates future payments, whereas a regular premium plan allocates expenses over time. Choosing the appropriate payment method is dependent on your financial plans.
A term insurance calculator is a free online tool that helps you calculate your term insurance premium for the ideal life cover and policy benefits. It evaluates key details such as age, gender, current income, marital status, health, and dependents to guide you in choosing a term insurance plan that matches your personal and financial objectives. Utilize HDFC Life's term plan calculator to strategically plan your term insurance.
Type your full name as it appears on official ID proofs, such as Aadhar card or PAN card.
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Select "Yes" if you are a Non-Resident Indian (NRI); otherwise, select "No."
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Choose your gender from the provided options.
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Select "Yes" if you are a smoker; otherwise, choose "No."
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Select your date of birth from the date picker.
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Choose the range that best matches your annual income.
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Enter your mobile phone number in the provided field.
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Provide your email address in the given field.
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After filling out all the details in the term insurance calculator, click the 'Get Free Quote' button. This will display the calculated premium along with suitable plan options.
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As mentioned in the above step-by-step guide, you need to provide the following details to calculate your term insurance premium:
The above information about you will help the calculator evaluate the premium for your term insurance customised as per your financial protection needs. Let’s understand how term insurance calculator works with the help of an example:
Ajay, a 25-year-old man, earning 10 Lakhs per annum, wishes to secure his family’s future with a term insurance. After assessing his financial protection needs, he decides that he would need a term insurance of 1 crore. He uses the Term Insurance Calculator by entering his male, smoking, 10 Lakh, 25 years and 1 crore respectively for gender, tobacco consumption habits, income, age and life cover. The estimated premium for Ajay’s term plan was Rs 14127 per month9 for HDFC Life Click 2 Protect Super (Life option)4 (UIN:101N145V08).
These are the benefits of using a term life insurance calculator:
When we don’t use a term insurance calculator we might end up choosing a term plan that doesn’t meet our financial protection needs and it’s in our budget. A term insurance calculator gives us a fairly accurate estimation of the term life cover we need along with the premium amount for the same.
By calculating the premium amount without taking your financial protection needs into consideration you might end up paying a higher premium that doesn’t fit your budget.
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By only considering the premium amount while buying a term insurance you might end up getting a life cover which is inadequate as per your financial needs.
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You can easily calculate an estimated term insurance premium without sharing any personal information. While contact details help us provide personalized service, they're completely optional to basic term insurance quotes.
Two simple ways to get started:
If you know your desired coverage amount, just provide your age, gender and tobacco consumption/smoking status for an instant premium estimate.
If you're unsure about your life coverage needs, share your approximate annual income along with your age, gender and tobacco consumption/smoking for us to help you with a recommended sum assured and its estimated premium..
The above approach lets you explore your options and plan your financial protection needs without the need to provide your personal information.
By getting term insurance early in your life, you not only financially protect your loved ones but also are able to keep the premiums low. Additionally, you can enjoy income tax benefits on the premiums paid. Take a proactive step today—review the table below to understand how premiums increase with age and make the smart decision to invest in term insurance now.
Age (years) |
Policy Term (years) |
Monthly Premium (Rs.) |
Monthly Premium with Critical illness rider (Rs.) |
Monthly Premium with Return of premium option (Rs.) |
20 |
40 |
692 |
711 |
1581 |
30 |
40 |
1176 |
1286 |
2592 |
40 |
40 |
2343 |
2885 |
4775 |
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Smoking is a major factor that affects your life insurance premiums. It also raises the risk of health issues such as throat cancer, lung disease, and heart conditions. Hence smokers are considered high-risk individuals by insurers. Even occasional smoking is considered "smoker" when applying for insurance, which impacts premiums. Insurance companies verify this through medical history checks and nicotine testing.
If you have used tobacco—cigarettes within the last 12 months before purchasing a Term Insurance Plan, you will be categorized as a smoker. This means you will have to pay a higher premium for the same coverage that a non-smoker would gets at a lower cost.
For example4 , Divesh, a 30 year-old healthy male opting for a term insurance policy with a ₹1 crore sum assured may see a 100% increase in premium if he is a smoker (for a policy tenure and premium paying term of 30 years)
Quitting smoking and maintaining a tobacco-free record over time might help reduce your premiums, as insurers may reassess your risk profile during policy renewals or new applications.
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When using our term insurance calculator, we'll ask for a few key details to help estimate your premium based on your desired coverage and to determine how much term insurance do I need. You'll need to provide your:
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Additionally, we'll consider factors such as your age, gender, date of birth, the type of term insurance you prefer, the duration of the policy, and the amount of coverage you want. We also take into account lifestyle factors, such as whether you smoke, and other personal habits that may impact your premium.
By filling in these details, you'll receive an accurate estimated tailored term insurance plan to your needs and circumstances.
Here are the term insurance plans offered by HDFC Life:
Term Insurance Plans |
Customer profile |
Sum assured |
Premium amount9 |
Action |
HDFC Life Click 2 Protect Super (Life option) (UIN:101N145V08) |
For all between 18-65 years |
1 Crore |
Rs.70614 |
|
HDFC Life Click 2 Protect Elite Plus (UIN:101N182V01) |
Salaried segment |
2 Crore |
Rs.115316 |
|
HDFC Life Click 2 Protect Life (UIN – 101N139V07) |
Salaried segment |
1 Crore |
Rs.119117 |
|
HDFC Life Click 2 Protect Ultimate (UIN: 101N179V01) |
Annual income >Rs.10 Lakhs |
2 Crore |
Rs.140015 |
|
HDFC Life Sanchay Legacy (Life option) (UIN:101N177V04) |
Mature HNI segment |
1.2 Crore |
Rs.1,00,00018 |
The add-ons are among the term plan benefits that help customise your plans. The options are:
Protect your spouse provides the death benefit to the surviving spouse to take manage the expenses. Either of the spouses will be financially independent in case of an eventuality. Joint life coverage for spouses is provided under the plan.
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Generally, term plans do not provide maturity benefits. The policy terminates on the maturity date. However, if you include the return of the premium rider, the premiums paid are reimbursed if you survive the policy term.
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The accidental death cover provides an additional payout along with the base sum assured if the policyholder dies in an accident. Self-inflicted injuries, death when under the influence of drugs or alcohol, suicide, etc., are not covered under this rider.
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Before choosing the right payout option, assess your current lifestyle and your family’s needs. The payout option should be such that they can manage their needs efficiently in your absence. The payout options available are:
Those who intend to protect their families from the burden of outstanding liabilities and monthly expenses should consider the monthly income option. The death benefit is paid out in instalments for a period chosen during the policy purchase.
When the monthly income payout is the same throughout, it may be difficult for the family to manage the expenses as it does not beat the inflation. The increasing monthly income option is ideal for those who intend to keep their family financially comfortable now and in the future. The monthly income rises by 10% every year for 10 years.
Individuals who have availed of big-ticket loans such as home loans should go for this option. The lump sum payout immediately helps the policyholder's family pay off the outstanding debt. The remaining can be invested in assets that reap high yields. The return on investment will help them fulfil financial goals such as children’s education abroad, marriage, etc.
A steady income to substitute the financial contribution of the policyholder and a lump sum to clear the outstanding liabilities is a great combination to keep the insured’s family financially stable. The payout will be divided into lump sum and monthly instalments. The first payout will be in lump sum and the remaining will be in monthly instalments for a predefined duration i.e., 10, 20, or 30 years.
The claim settlement process entails the following steps:
Reporting the claim is the first step. You can do it either by visiting the insurance company online through their website or by sending an SMS or Email to the insurance company’s customer care helpline.
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The insurance company’s claim care team will process the claim and contact you if they need any additional information or documents.
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The company settled the claim on receiving all the documents and required information.
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The documents to be submitted for filing a claim are:
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We help you to make informed insurance decisions for a lifetime.
Reviewed by Life Insurance Experts
We at HDFC Life are committed to offer innovative products and services that enable individuals live a ‘Life of Pride’. For over two decades we have been providing life insurance solutions - protection, pension, savings, investment, annuity and health.
**If a customer is a Salaried individual and has opted for a cover of INR 2 Cr with Limited pay, then the total discounts applicable shall be: 10% +7% = 17% discount on the first year premiums.
^ Available under Life & Life Plus plan options
***Online Premium for Life Option, Male Life Assured, Non-Smoker, 20 years of age, Policy term of 25 years, Regular pay, Annual frequency, exclusive of taxes and levies as applicable. (Annualized Premium of 622/30=20.7).
~Tax benefits of ₹ 54,600 (₹ 46,800 u/s 80C & ₹ 7,800 u/s 80D) is calculated at highest tax slab rate of 30% on life insurance premium u/s 80C of ₹ 1,50,000 and health premium (Critical illness rider) u/s 80D of ₹ 25,000. Tax benefits are subject to conditions under section 80C, 80D, 10(10D) as per Income Tax Act, 1961. Please consult your tax advisor for more information.
*Online Premium for Life Option, Male Life Assured, Non-Smoker, 20 years of age, Policy term of 40 years, Regular pay, Monthly frequency, exclusive of taxes and levies as applicable.
#Applicable to all in force policies of HDFC Life Click 2 Protect Elite Plus after a waiting period of 1 year, with a base sum assured of INR 2 Crore or more. Claim payout to be restricted to 5 lakhs. Rest of the claim amount will be released after completion of investigation. T&C apply.
1. The above are based on the current Income-tax law . Tax benefits are subject to changes in tax laws.
2. Subject to conditions mentioned u/s 80C of the Income tax Act, 1961. The customer is requested to seek tax advice from his Chartered Accountant or personal tax advisor with respect to his personal tax liabilities under the Income-tax law.
3. The premium amount is exclusive of taxes & levies.
4. HDFC Life Click 2 Protect Super (UIN: 101N145V08) is a Non-Linked, Non-Participating, Individual, Pure Risk Premium/ Savings Life Insurance Plan. Life Insurance Coverage is available in this product
5. The above premium rates are for a healthy male, inclusive of 5% online discount (applicable only for 1st year premium) and Inclusive of taxes & levies as applicable. HDFC Life Click 2 Protect Super (UIN: 101N145V08) is a Non-Linked, Non-Participating, Individual, Pure Risk Premium/ Savings Life Insurance Plan. Life Insurance Coverage is available in this product. (For Non-Smoker Monthly Premium is Rs. 1181 & For Smoker Monthly Premium is Rs. 2362. The premium difference is 100% more than non smoker)
6. HDFC Life Sanchay Legacy (UIN:101N177V04) is a Non-Linked, Non-Participating, Individual, Pure Risk Premium/ Savings Life Insurance Plan. Life Insurance Coverage is available in this product.
7. The premium price is subject to change based on variations in customer profile, policy term, premium payment term, and selected death benefits.
9. The premium amount is exclusive of taxes & levies.
10. Buying policy online since there is no agent involved, there is no commission to be paid.
11. HDFC Life Click 2 Protect Ultimate(UIN: 101N179V01) A Non-Linked, Non-Participating, Individual, Pure Risk Premium/Savings Life Insurance Plan. The policy must be in force on the date of death, with all premiums fully paid, except for the exclusion clauses mentioned in Part F of the policy document.
12. HDFC Life Health Plus Rider – Non Linked (UIN No: 101B031V02) is a Non-Linked, Non-Participating/ Participating, Pure risk premium, Individual Health rider.
13. The views and opinions expressed in the article are solely of the individual and customer should consult their own financial advisor for any financial matter
14. The above premium rates are for a non-smoker healthy male, age is 25, Policy Term 20 year & Premium Paying Term is 20 year. inclusive of 5% online discount (applicable only for 1st year premium) and exclusive of taxes & levies as applicable. HDFC Life Click 2 Protect Super (UIN: 101N145V08) is a Non-Linked, Non-Participating, Individual, Pure Risk Premium/ Savings Life Insurance Plan. Life Insurance Coverage is available in this product
15. The above premium rates are for a non-smoker healthy male, age is 25, Policy Term 20 year & Premium Paying Term is 20 year. inclusive of 5% online discount (applicable only for 1st year premium) and exclusive of taxes & levies as applicable. HDFC Life Click 2 Protect Ultimate(UIN: 101N179V01) A Non-Linked, Non-Participating, Individual, Pure Risk Premium/Savings Life Insurance Plan. Life Insurance Coverage is available in this product
16. The above premium rates are for a non-smoker healthy male, age is 25, Policy Term 20 year & Premium Paying Term is 15 year. inclusive of 5% online discount (applicable only for 1st year premium) and exclusive of taxes & levies as applicable HDFC Life Click 2 Protect Elite Plus (UIN:101N182V01) is a Non-Linked, Non-Participating, Individual, Pure Risk Premium/ Savings Life Insurance Plan. Life Insurance Coverage is available in this product.
17. The above premium rates are for a non-smoker healthy male, age is 25, Policy Term 20 year & Premium Paying Term is 20 year. inclusive of 5% online discount (applicable only for 1st year premium) and exclusive of taxes & levies as applicable. HDFC Life Click 2 Protect Life (UIN – 101N139V07) A Non Linked, Non Participating, Individual, Pure Risk Premium/Savings Life Insurance Plan Life Insurance Coverage is available in this product.
18. The above premium rates are for a non-smoker healthy male, age is 40, Policy Term 15 year & Premium Paying Term is 15 year. inclusive of 5% online discount (applicable only for 1st year premium) and exclusive of taxes & levies as applicable. HDFC Life Sanchay Legacy (UIN:101N177V04) is a Non-Linked, Non-Participating, Individual, Pure Risk Premium/ Savings Life Insurance Plan.Life Insurance Coverage is available in this product.
25. The premium amount is exclusive of taxes & levies.
This interactive does not constitute an offer or solicitation for the purchase or sale of any financial instrument or as an official confirmation of any transaction. HDFC Life Insurance Company Limited or any of its affiliates/ group companies shall not be in any way responsible for any loss or damage that may arise to any person from any inadvertent error in the information reported by the interactive.
The information being provided through this interactive is provided for your assistance/ information only and is not intended to be and must not alone be taken as the basis for an investment decision (“Information”). The recipient/ user assume the entire risk of any use made of this Information. Each recipient /user of this interactive should make such investigation as it deems necessary to arrive at an independent decision while making an investment and should consult his own advisors to determine the merits and risks of such investment. The investment discussed or views expressed may not be suitable for all investors. HDFC Life Insurance Company Limited and its affiliates, group companies, sales staff, financial consultants, officers, directors, and employees may have potential conflict of interest with respect to any recommendation, related information or opinions.
This Information should not be reproduced or redistributed or passed on directly or indirectly in any form to any other person or published, copied, in whole or in part, for any purpose. This Information is not directed or intended for distribution to, or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction, where such distribution, publication, availability or use would be contrary to law, regulation or which would subject HDFC Life Insurance Company Limited and its affiliates/ group companies to any registration or licensing requirements within such jurisdiction. The distribution of this Information in certain jurisdictions may be restricted by law, and persons in whose possession this Information comes, should inform themselves about and observe, any such restrictions. The Information given in this interactive is as of the date of this report and there can be no assurance that future results or events will be consistent with this Information. This Information is subject to change without any prior notice. HDFC Life Insurance Company Limited reserves the right to make modifications and alterations to this statement as may be required from time to time. However, HDFC Life Insurance Company Limited is under no obligation to update or keep the Information current.
Neither HDFC Life Insurance Company Limited nor any of its affiliates, group companies, directors, employees, sales staff, financial consultants or representatives shall be liable for any damages whether direct, indirect, special or consequential including health, physical well being, lost revenue or lost profits that may arise from or in connection with the use of the Information. Past performance is not necessarily a guide to future performance.
19. The premiums are inclusive of applicable levies, taxes and 5% discount for 1st year premiums only. The above premiums are for a healthy male applicable for HDFC Life Click 2 Protect Super (UIN: 101N145V08) (a Non-Linked, Non-Participating, Individual, Pure Risk Premium/Savings Life Insurance Plan) along with return of premium option.
20. Total Premiums Paid are the total of all the premiums received, excluding any extra premium, any rider premium and taxes. In case ROP option has been selected, Total Premiums Paid includes premium paid for base plan option and the additional premium paid for ROP option. This benefit is available under Life and Life Plus option only.
ARN -DM/06/25/24745