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HDFC Life ClassicAssure PlusInvestment
HDFC Life ClassicAssure PlusInvestment
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Term Insurance

To delay is to regret

You may not always be around to take care of your family. And that’s when a term plan ensures your family is well protected.

Life cover of 1 Crore @ Rs.25/day**

If you haven’t got one, get it right now.

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Term Insurance Plans Buying Guide

1800-266-9777 (All Days, from 9am to 9pm, Toll Free)

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Term Insurance Plans

What is Term Insurance?

Term Insurance is a life insurance policy that offers coverage for a fixed number of years - the “term” of the policy. If the insured individual dies when the policy is active, a death benefit is paid to the nominees of the insured individual.

A basic variant of term insurance has no cash value which means, if the insured person survives the term of the policy, the policy does not return any value, with the exceptions of plans like Return on Premium etc.
You can purchase a term insurance policy which can provide a certain corpus to your dependents in event of your demise, they would be able to sustain the same lifestyle or pay off existing liabilities without compromising on their dreams thanks to the sum assured which they would receive from life insurance.

Term Insurance is a life insurance policy that offers coverage for a fixed number of years - the “term” of the policy. If the insured individual dies when the policy is active, a death benefit is paid to the nominees of the insured individual.

A basic variant of term insurance has no cash value which means, if the insured person survives the term of the policy, the policy does not return any value, with the exceptions of plans like Return on Premium etc.
You can purchase a term insurance policy which can provide a certain corpus to your dependents in event of your demise, they would be able to sustain the same lifestyle or pay off existing liabilities without compromising on their dreams thanks to the sum assured which they would receive from life insurance.

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Term Insurance Plans

The most cost-effective way to secure your family’s financial future.

HDFC Life Click 2 Protect Super

A plan that provides you varying cover along with comprehensive protection as per your evolving needs.

UIN: 101N145V01

KEY FEATURES

Get back all premiums paid on survival till maturity with Return of Premiumoption
Additional amount payable in case of accidental death during policy term
Provides Acceleration of Death benefit on diagnosis of specified terminal illnesses, till age 80 years.
Option to choose increasing Death Benefit up to 200% under Life option
Option to vary your Death Benefit according to your need under Life Goal option
Waiver of Premium on diagnosis of Critical Illness (through WOP CI option) and Total and Permanent Disability (through WOP Disability option)
Option to choose Additional Cover for Spouse

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How much life insurance do you need?

Use our quick and simple calculator to know what’s ideal for you.

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Recommended plans for you

HDFC Life Click 2 Protect Life

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The values shown here are only for illustration. The results are generated based on the information provided. It is not intended to be and must not alone be taken as the basis for an investment decision.

HDFC Life Click 2 Protect Life

A plan that provides benefits to you as per your altering lifestyle and life stage needs.

UIN: 101N139V04

KEY FEATURES

Option to avail cover for Whole of Life¹.
Get income payouts from age 60 onwards under Income Plus Option.
Get additional Sum Assured on Accidental Death (through ADB option).²
Get back all premiums paid on survival till maturity with Return of Premium option³.
Enjoy special premium rates for female lives and non-tobacco users.
Avail Waiver of Premium on diagnosis of Critical Illness(through WOP CI option).²

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Secure Your Family's Financial Future TODAY

Term plans provide financial protection when your loved ones need it most. Calculate your premiums and get a policy today!

	Premium Annually	Policy Term ****	Total Premium Amount	Extra Cost
At present	₹ 32,665	58	₹ 18,94,570	-

Why You Should Buy Term Insurance?

Term insurance is a simple product and is easy to understand. Here are reasons to buy term insurance:

Low premium and attractively large cover

The coverage offered by a term insurance policy can be substantial and the premium for such a cover would be quite affordable. Thus such a product should be at the foundation of one’s financial portfolio as it offers excellent protection
Financial dependents are protected

The primary purpose of a term plan is to protect the financial dependents of the policy holder in the case of the latter’s unfortunate demise. The death benefit offered by a term life insurance policy can be substantial and enable financial dependents to manage livelihood related expenses as well as achieve their financial goals. Therefore a term insurance policy would offer tremendous peace of mind to the policyholder as the well-being of the financial dependents would be taken care off even in the former’s absence.

Insure your assets

In the absence of the primary income earner, financial dependents might be forced to sell assets to arrange for funds to manage daily expenses. For example: financial dependents may either have to sell the house or investment portfolio to arrange for funds. This could have a negative impact on their long term well being. Instead, the death benefit offered by a term insurance plan can provide substantial funds to manage daily expenses or for any other purpose. Thus assets that can provide tremendous value over the long term need not be liquidated.
Riders

A term insurance policy can be equipped with multiple riders. These riders are quite useful and can augment a term insurance policy by offering enhanced protection. Some of these riders include accelerated death benefit rider, accidental death benefit, critical illness rider, waiver of premium rider etc. Including these riders may bump your premium slightly but the value that you would get out of them could be tremendous.

Benefits of Buying Term Plan

Here are some benefits of purchasing a term insurance policy

High protection at low premiums

Life insurance policies are accessible to the masses since they provide a large cover at relatively low premiums. The earlier in life you purchase term insurance, the lower the premium.
Add ons

Due to unfortunate circumstance, the policyholder may be incapacitated due to an accident or the diagnosis of a critical illness. This would impact the income earning capability of the policyholder. In such cases, the policyholder’s family may find it difficult to manage expenses. To protect oneself against such scenarios, one can consider augmenting the term insurance plan with multiple add-ons or riders. Examples of some of these add-ons include critical illness coverage, accidental disability rider etc. A critical illness cover would provide a lump sum amount which is equivalent to the death benefit if the policyholder is diagnosed with any of the covered critical illnesses. The accidental disability rider will ensure that the policyholder gets paid a regular monthly income which would be a certain percentage of the sum assured for a specified period.
Financial security

The death of the breadwinner of the family is not only distressing, but it also brings about financial liabilities. Life insurance ensures that daily expenses do not suffer as a result of the insurer’s death. The pay-out resulting from the insurance policy can be received in the form of a lump sum or in the form of instalments to enable the family to cope with their living expenses.

How Does a Term Plan Work?

Term plans work like limited life insurance policies. They provide life cover for a specific time. To enjoy the life cover, you must pay premiums at regular intervals. If anything happens to you, the policyholder, during the policy tenure, your nominee receives the promised sum assured as the policy payout. To enhance your family’s financial protection, you can choose to purchase riders or add-ons.

Who Should Buy Term Insurance?

Let’s take a look at who should buy term insurance:

Parents

Parents always worry about their children’s future. A term plan provides parents with peace of mind. They can rest assured that their child will be taken care of financially even if something were to happen to them. By providing a financial safety net, they never have to worry about their child giving up on their dreams.

Young Workers

Young professionals who have few financial liabilities, such as a vehicle loan or a personal loan EMI, can opt for a term plan. They ensure that their parents and loved ones have the financial means required to pay off their debts if anything happens to them. Additionally, they benefit from lower premiums, which can help them in the future.

Newly-weds

Couples who recently married can benefit from a term plan. The policy will provide financial support for their spouse when they need it the most. A term plan is a critical part of every good financial plan for young couples who want to enjoy financial independence.

Working Women

Young women today are occupying board rooms and managing their finances as well. Many assume the role of the sole breadwinner and support their loved ones financially. With a term plan, these women can secure the financial future of their parents, spouse and children. The payout from such a policy could help take care of any outstanding debts or even help their loved ones meet future financial goals.

Taxpayers

Term insurance policies offer certain benefits that allow taxpayers to reduce their tax liability. Premium paid under term insurance policies are eligible for deductions under Section 80C of the Income Tax Act, 1961⁶

Retirees

People work their whole lives to enjoy a secure retired life. Having a term insurance plan in your golden years provides financial security to your spouse. If something were to happen to you, the payout from the policy will allow them to maintain their standard of living, even without a steady income.

Ramesh (32, Male, Married)*

Ramesh, a 32-year-old man who works as a project manager in an IT firm. His wife, Manju, is 29 and also works in the IT industry. There is not a huge gap in the salaries they draw, and have a home loan to pay off. Both Ramesh and Manju have term insurance covers offered by their respective employers. This has convinced them that they do not need a term insurance. What they do not realize is that this term insurance is valid only until one is employed in the organisation. Also, the cover offered by the office is usually not enough or adequate when something untoward happens.

Surekha, 35 and Ashwin (37, Married Couple)*

Surekha is a 35-year-old homemaker. She is married to Ashwin, 37, who is a Senior Designer with a design house. They have a 14-year-old child. Their child would be having quite a few milestones coming up which would require money. Right from getting admission into a college for graduation or planning to go abroad to pursue further studies. Therefore, purchasing a term insurance is a must for Ashwin as it would ensure that the child’s upbringing and dreams can be fulfflled even if either of the parents experience an early demise.

Mihir (36, Male, Married, sole breadwinner)*

Mihir, a 36-year old man with two kids, is the sole breadwinner for his family. He should get a term insurance as both his kids and wife depend on him. Further, his father is due to retire next year and his in-laws are approaching their retirement age well.Post-retirement,they would also be dependent on Mihir. As the number of dependents increase, Mihir will have to increase his cover as well.

Reshma (22, Female, Single)*

Reshma is a 22-year-old lady who has just started working. She is single and her parents do not depend on her currently but may depend on her in the future. She may also buy a house in the future and would need loan for it. If something happens to her in the meanwhile it is important that her parents are not burdened with responsibilities to take care of her expenses. She should consider getting a term insurance soon, as the premium she has to pay will rise with her age. After getting married, she would have the option to add her partner as a nominee.

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Why Do I Need Term Insurance?

Despite the many features and benefits of term insurance plans, some people are still not sure how these policies impact them. Here’s a look at three crucial reasons why you need term insurance:

To Protect Your Family

Your family depends on you emotionally and financially. You may want to help your parents secure a better retirement or pay for your child’s higher education. The payout from a term plan can help your family achieve their goals even if something were to happen to you.

To Protect Your Assets

Many young people today require loans to help them purchase a vehicle or a home. If something were to happen to you while you are repaying a loan, your family may have to deal with your loss, the loss of your income and a new financial burden. If they are unable to repay the loan, they risk losing the asset. The payout from a term plan can help your family deal with debt and protect your assets.

To Cope with New Lifestyle Risks

Every day we hear about the rise in lifestyle diseases and the incidence of critical issues such as heart problems and cancer. Your term plan can offer some financial support as you deal with such a diagnosis and come to terms with recovery and recuperation.

Features of Term Insurance

Let’s look at what a term insurance policy offers you:

Low Entry Age

Term plans have a low entry age of just 18. So, you can purchase a policy for yourself or your loved ones on reaching adulthood.

Long-Term Protection

Term policies offer whole life coverage, allowing you to provide your family with financial protection for several decades!

Easy to Buy

In today’s digital India, you can purchase a term policy online in just a few minutes. You can compare various policy benefits and customise a plan with add-ons based on your unique needs. Once you know which policy you want, you can submit a few document scans and pay the premium.

Flexible Premium Payment Options

When you purchase a term policy, you can choose how to pay the premiums. You can opt to pay an annual premium, half-yearly premiums, quarterly premiums or even make monthly payments.

Adjustable Cover

With a term insurance plan, you can opt to increase or decrease your sum assured depending on your evolving financial needs.

Liability Protection

The payout from a term insurance policy allows your loved ones to better deal with debt liabilities. By purchasing a term plan, you can help your family members pay off existing debts and loans.

Documents & Eligibility Criteria for Term Insurance Plans

The documents required to apply for a term plan include:

1 Officially Valid Documents for KYC Purposes for Individuals

Sr. No	List of Officially Valid Documents (OVD) - Identity & Address Proof
1	Passport
2	Voter’s Identity Card issued by Election Commission of India
3	Permanent Driving License
4	Aadhaar Card
5	Letter issued by a gazetted officer not more than 6 months old, mentioning the address along with a duly attested photograph of the person
6	Bank account statement / Passbook not older than six months as on date of acceptance (If it contains photograph)
7	Documents (not more than 3 months old) issued by Government departments of foreign jurisdiction and letter issued by Foreign Embassy or Mission in India (If it contains photograph)
8	Central KYC Identifier (can be accepted, if there is no change in the current address of the client)

Sr. No	Only Identity Proof
1	PAN Card
2	Identity card with applicant’s photograph issued by Central/ State Departments, Statutory/ Regulatory Authorities, Public Sector Undertakings, Scheduled Commercials Banks, Public Finance Institutions

You are eligible to apply for a term plan if:

You are an Indian citizen, non-resident Indian (NRI) or person of Indian origin (PIO)
You undergo a medical test so your insurer understands any medical conditions you may have
You are able to furnish the necessary photo identity proof, including address, age and income proof

2 Officially Valid KYC Documents for Legal Entities

Features	Documents
Insurance Contracts with companies	Certificate of incorporation and Memorandum & Articles of Association Resolution of the Board of Directors Power of Attorney granted to its managers, officers or employees to transact business on its behalf PAN of Company One copy of an officially valid document containing details of identity and address, one recent photograph and PAN / Form 60 in respect of managers, officers or employees holding an attorney to transact on its behalf
Insurance Contracts with partnership firms	Registration certificate, if registered Partnership deed Partnership Firm PAN Consent from other partners regarding premium being paid from Firm account One copy of an officially valid document containing details of identity and address, one recent photograph and PAN / Form 60 in respect of managers, officers or employees holding an attorney to transact on its behalf
Insurance Contracts with trusts & foundations	Certificate of registration Trust Deed Trust’s/ Foundation’s PAN Consent from other trustees regarding premium being paid from Trust account One copy of an officially valid document containing details of identity and address, one recent photograph and PAN / Form 60 in respect of managers, officers or employees holding an attorney to transact on its behalf

You are eligible to apply for a term plan if:

You are an Indian citizen, non-resident Indian (NRI) or person of Indian origin (PIO)
You undergo a medical test so your insurer understands any medical conditions you may have
You are able to furnish the necessary photo identity proof, including address, age and income proof

3 List of Income Proof Documents - For Resident Indians

Sr. No	Source of Fund / Proof of Income Document	Salaried	Self Employed / Business	Agriculturist	HRI/PEP	Special Jurisdictions
1	Salary slip / certificate – issued in last 3 months	Yes	No	No	Yes*	Yes*
2	ITR / Form 16 / assessment orders / Computation of Income issued in last 3 years	Yes	Yes	Yes	Yes	Yes
3	Bank statement which establishes the Source of Fund / Bank statement (preceding 6 months) – addition of non cash credits	Yes	Yes	Yes	Yes	Yes
4	Audited Company accounts statement / certificate issued in last 3 years	No	Yes	No	Yes**	Yes**
5	Audited firm accounts statement / certificate issued in last 3 years and Partnership Deed	No	Yes	No	Yes**	Yes**
6	Chartered Accountant’s Certificate issued in last 3 years.	No	Yes	No	Yes**	Yes**
7	Fixed deposits liquidation entries in bank statement/ mutual fund redemption entries in bank statement (to the tune of total premium paid by customer in a financial year)	Yes	Yes	Yes	Yes	Yes
8	Rent receipt (issued in last 3 months) with valid agreement	Yes	Yes	Yes	Yes	Yes
9	Mandi receipt / Form J issued in last 1 year and agriculture records	No	No	Yes	No	No
10	Foreign Bank statement of specific countries showing credits (preceding 6 months)	No	No	No	No	No
11	Bank Statements reflecting cash credit transactions, where individual transaction value per instance and on a particular transaction date do not exceed Rs. 1,00,000/-	No	-	No	No	Yes

Note: * For salaried person ** for self employed / business income

You are eligible to apply for a term plan if:

You are an Indian citizen, non-resident Indian (NRI) or person of Indian origin (PIO)
You undergo a medical test so your insurer understands any medical conditions you may have
You are able to furnish the necessary photo identity proof, including address, age and income proof

4 List of Income Proof Documents - For Non-Resident Indians

Sr. No	Source of Fund / Proof of Income Document	Salaried	Self Employed / Business
1	Salary slip / certificate – issued in last 3 months	Yes	No
2	ITR / Form 16 / assessment orders / Computation of Income issued in last 3 years	Yes	Yes
3	Bank statement which establishes the Source of Fund / Bank statement (preceding 6 months) – addition of non cash credits	Yes (Indian bank statement)	Yes (Indian bank statement)
4	Audited Company accounts statement / certificate issued in last 3 years	No	Yes
5	Audited firm accounts statement / certificate issued in last 3 years and Partnership Deed	No	Yes
6	Chartered Accountant’s Certificate issued in last 3 years.	No	Yes
7	Fixed deposits liquidation entries in bank statement/ mutual fund redemption entries in bank statement (to the tune of total premium paid by customer in a financial year)	Yes	Yes
8	Rent receipt (issued in last 3 months) with valid agreement	Yes	Yes
9	Mandi receipt / Form J issued in last 1 year and agriculture records	No	No
10	Foreign Bank statement of specific countries showing credits (preceding 6 months)	Yes	Yes
11	Bank Statements reflecting cash credit transactions, where individual transaction value per instance and on a particular transaction date do not exceed Rs. 1,00,000/-	No	No

Note: * For salaried person ** for self employed / business income

You are eligible to apply for a term plan if:

You are an Indian citizen, non-resident Indian (NRI) or person of Indian origin (PIO)
You undergo a medical test so your insurer understands any medical conditions you may have
You are able to furnish the necessary photo identity proof, including address, age and income proof

How to Choose a Term Insurance Plan?

If you’d like to purchase a term plan, you need to follow these steps:

Step 1 – Think About the Sum Assured

Consider how much you need to secure your family’s finances. Ideally, get a sum assured that is at least ten times your annual income. If you have any financial liabilities, such as EMI payments, you need to account for those as well. Ensure that the sum assured will allow your family to move forward without worrying about debts or changing their lifestyle significantly.

Step 2 – Consider Additional Benefits

When you opt for a term plan, you can choose to purchase additional riders for enhanced protection. Opting for a critical illness or disability rider could help you and your family navigate through a difficult time in your lives. You can also choose how you would like your family to receive the payout – whether as a lump sum or monthly instalments. Finally, evaluate whether your policy offers a maturity or other benefits in case you outlive the policy term.

Step 3 –Pay the Premium

Once you pick a term plan and customise your policy, you simply need to finalise the deal. You can purchase term insurance online quickly and conveniently. Simply enter the necessary details and make a secure payment to purchase the plan.

Types of Term Plan

Term plans with many flexibilities and additional benefits are available aplenty. The most popular propositions/plans available in the market are described below. You can choose one based on your insurance needs.

Pure level term insurance plan

The simplest to understand is a pure term plan that pays out a fixed sum assured to the nominee in case of the death of the insured during the term of the policy. Such plans do not pay anything on survival of the insured till the end of the policy term. The premium of a pure term plan primarily depends on factors such as age of the insured, gender, whether the insured is a smoker, term of the policy, premium payment term and the sum assured. These are plain vanilla offerings within products and typically have the lowest premiums among all product options available.

Return of premium plans

Many customers cannot reconcile with the fact that pure term plans do not provide any monies back if they survive till the end of the policy term. For such customers, Return of Premium plan is quite attractive where in if the insurer survives the policy term, total premiums paid under the plan (except taxes) are paid back. The sum assured is paid out to the nominee in case of death during the term. These kinds of plans are much costlier than Pure Term Plans as they promise a benefits on survival in addition to that on death.

Increasing sum assured plan

The exact opposite of a decreasing plan – in this plan the sum assured increases by a certain percentage, typically capped to a multiple of the original sum assured. The premiums are higher than a level plan as benefit amount increases with each passing year. Such plans are designed to increase cover along with increasing income levels of the customer. Many plans give an option at the time of purchase to increase sum assured each year without the need for further underwriting. Customer can pay higher premiums each year and avail the revised higher sum assured.

Term insurance plans with income benefit

Term insurance is typically taken for the purpose of income replacement. To make the product benefits match customer needs better, income benefit is offered wherein the nominee gets the desired sum assured in periodic installments. A part of the benefit is still offered as lump sum in some of these plans. A key benefit of the plan is that it is more tax efficient in the hands of the nominee than a lump sum-based plan. Typically, any lump sum assured will be invested in an interest-bearing financial instrument, and the periodic interest received could be taxable. Nominee also get an option to commute the future income payments at any point and get a lump sum instead which is equal to the present value of outstanding income benefit installments.

Term Insurance Plan Variants

At HDFC Life, we offer three variants of our HDFC LIFE Click 2 Protect Life options:

Basic Life Cover

Here, you enjoy life protection and get a maturity benefit at the end of the policy tenure. You can choose to enhance your coverage with riders.

Life Cover and Critical Illness Cover

With this plan variant, you get the added benefit of critical illness cover along with life cover. The sum assured amount is split between life cover and critical illness cover. On the diagnosis of a covered critical illness, you receive the critical illness cover and all future premiums are waived off. There’s also a return of premium maturity benefit.

Life Cover and Regular Income

If you want life cover and additional financial support, this is the variant for you. The plan offers monthly income after you turn 60 in addition to a lump-sum payout on maturity.

How Much Term Insurance Cover Do You Need?

Understanding the ideal sum assured amount can seem difficult. Most experts advise term insurance policyholders to opt for a sum assured that is at least 10 times their annual income. If you have the means to, you should pick anywhere between 15 to 20 times your annual income to account for inflation. Over and above this amount, you need to consider your financial liabilities – outstanding loan amounts and other EMIs. Assume you earn INR 12 lakhs every year and have INR 45 lakhs left on your home loan payments. You should opt for a minimum sum assured of (12,00,000 x 10) + 45,00,000 = INR 1,20,00,000 + 45,00,000 = INR 1,65,00,000.

HUMAN LIFE VALUE CALCULATOR

When Should I Buy a Term Insurance Plan?

The ideal time to buy a term plan is right away. Young individuals who enjoy good health can get higher sum assured amounts at lower premiums since they pose very little risk. As you get older, you may face health issues that could increase your premium or reduce the maximum sum assured you can get.

What Are the Payout Options in Term Life Insurance?

You can opt for one of the following payout options for your term insurance policy:

1. One-Time Lump-Sum Payout

If you opt for this, your nominee will receive the entire sum due to them in a single payment. For example, if your sum assured is INR 2 crore, your nominee will receive the entire amount once their claim is accepted.

2. One-Time Lump-Sum Payment with Fixed Monthly Payouts

You may not want your nominee to receive the entire amount at once. You can opt for this option that provides a portion of the sum assured as a lump-sum payout immediately. The rest of the money is provided in monthly instalments over a few years. You can decide how long you want the monthly payments to continue when you purchase the policy. The sum assured amounts get divided equally depending on what you choose

3. One-Time Lump-Sum Payment with Increasing Monthly Payouts

You can choose for your nominee to receive a lump-sum payout of the sum assured along with increasing monthly instalments for a specified period. The monthly sums increase every year for a specified term as decided by the policyholder when purchasing the plan.

Why Buying Term Insurance is a Must During COVID-19 Pandemic?

Terms plans are the most basic life insurance product available in the market. They provide life cover at affordable premiums. They are ideal for individuals who have certain financial obligations and do not wish to leave their family members with any kind of debt if something were to happen to them. During the COVID-19 pandemic, it became more crucial than ever to purchase a term insurance policy.
Many individuals succumbed to the disease after long stays in the hospital. This left their families with broken hearts and mounting hospital bills that they might not have been able to afford. The payout from a term insurance policy could help these individuals pay off outstanding medical expenses and other debts.
A term plan can provide your loved ones with financial stability during an incredibly difficult time.

What Is a Term Insurance Rider?

A term insurance rider is an add-on that provides enhanced benefits over and above life insurance. For example, you can opt for an accidental death rider or a disability rider which offers an additional payout in case the policyholder passes away in an accident or if they become disabled. Most insurers provide a critical illness rider as well. With this add-on, you receive a lump-sum payout on the diagnosis of a covered critical illness. The most popular term insurance rider is the premium waiver rider, which waives off future premiums in case the policyholder receives a critical illness diagnosis or other eventualities outlined by the plan.

How Long Should the Term Insurance Policy Period Be?

When you purchase a term plan, you can opt for tenure as short as five years or get coverage for the rest of your life. Ideally, you should choose a plan that terminates just before you retire. Term insurance payouts help you meet financial liabilities, most of which you would have completed by the time you retire. If you’d like to continue to enjoy life coverage, you can convert the term policy into a full-life plan before the policy tenure ends.

How to select the Best Term Insurance Plan?

To ensure you make the right choice, you should:

Look at the Claim-Settlement Ratio

An insurance company’s claim settlement ratio tells you how likely they are to settle your nominee’s claim. You can check a company’s claim settlement ratio online. HDFC Life has a Claim Settlement Ratio (CSR) of 98.66%⁵
Understand the Customer Experience

Ask people you trust about their experience with the insurance company you prefer. You can also check online reviews from customers to understand whether individuals enjoy a pleasant experience with the company or not. Remember, your term plan could continue for the rest of your life, so you need to build a lasting relationship with the company.

Check the Solvency Ratio

The solvency ratio refers to a company’s ability to financially fulfil the insurance obligations. The IRDAI mandates that all insurance companies should have a ratio of at least 1.5. You can check the solvency ratio of companies online
Consider the Benefits.

Not all plans are equal. You should look for policies that offer higher benefits than others. Try and find policies that offer maturity benefits as well as flexible payment and payout options.

Choose Riders

Term plans offer more than just life cover. You can opt for riders that provide coverage for critical illnesses and accidental disability as well. The payouts from these add-ons can go a long way in offering financial stability to you and your loved ones at a difficult time.

Find Flexible Payout Options

When you purchase a term policy, you often have specific financial goals in mind. Most term insurance plans offer lump-sum payouts to nominees. Often, these individuals get overwhelmed by the large sum and do not know how to manage it. You should consider policies that offer monthly payouts instead. Your nominee will be better equipped to deal with smaller amounts every month that can help them with immediate financial needs.
Research Online Availability

Before you make a decision, you must check whether your insurer is available to you online and offline. Most companies today have 24x7 chat features on their website so you can get quick answers to your queries. You should also look for companies that offer online filing of claims for quick processing.

Term Insurance Buying Guide

1 How Else Will a Term Plan Help You?

Don’t we all like it when we have to pay very little for getting a lot in return? Purchasing term insurance is just like that. A term policy offers a large cover (For Example: A cover of Rs 1 crore) for a comparatively low premium (For Example: Rs 6500 per year). One can get a 30-year term insurance policy with annual premium remaining the same for whole period. In today’s era of increasing living expenses, any individual would want to receive maximum risk cover. This is because, in event of the individual’s untimely demise, a higher cover would enable his dependents to not compromise on living standards. And of course, you can also claim tax benefits on the premium you have paid.

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2 How to Calculate the Amount of Insurance Cover that You Need?

Most people tend to pick a number out of thin air when deciding on the cover they need.

A simple rule of thumb is that the insurance cover must be ten to twenty times that of the insured individual’s annual income. Which means if a person’s annual income is Rs 10 lakhs, she must purchase an insurance plan that offers a cover of approximately 1.5 crore. Sometimes, one looks at the premium that one is willing to pay and chooses whatever cover can be bought with that premium. This is not the right way to decide on the amount of cover you will need. The correct way to decide on the sum insured is to look at your future expenditure with a rational mind.

3 Add-Ons to Your Term Insurance

Additional benefits/risk covers might be built-in some term plans making them more comprehensive. A comprehensive term plan aims to cover the financial risks associated with death, disease and disability (3D). Some of these risk covers are in-built and some are offered as riders or add-ons by charging an additional premium. Some of the most popular riders or add-on covers are:

Accidental Death Benefit Rider

This rider pays an additional sum to the nominee, over and above the sum insured, in case the insured dies in an accident. Such plans are preferred by younger customers who perceive a higher threat of accident as a cause of death.

Critical Illness Cover

This cover pays a lump sum amount to the insured one diagnosis of any of the specified critical illnesses. This amount can be used as the insured sees fit and has no sub limits or conditions imposed. Critical illnesses can lead to massive medical expenditure which can far overshoot the cover available in mediclaim / indemnity-based plans. Hence, critical illness covers become truly a critical component of protection needs of an individual. Such plans are offered on accelerated or additional basis. In case of accelerated critical illness covers, part of the death benefits (sum assured) is paid in advance at the time of critical illness diagnosis and the rest is paid on death. Additional critical illness riders provide a critical illness sum assured independent of and without reducing the death benefit.

Waiver of premium

This rider waives off all the future premiums in case a covered condition such as disability or critical illness occurs. In such cases, the policy continues to be in force despite the premiums not being paid and death benefit is paid in case of unfortunate death during the term.

Married Women’s Property Act (MWPA)

Another detail to check is if the policy has a provision for Married Woman’s Property Act, 1874. This provision can be added to the policy to ensure that the sum insured under the policy is paid to a trust that only the wife or children of the insured can benefits from. This amount cannot be used to pay off any other creditors, relatives, or even be given away through a will.

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4 Benefits of purchasing Term Insurance Online

This typically includes the following components

Family expenditure to maintain the current standard of living
Loans and other debt that need to be repaid
Future expenditure that the family will 3 have to make for important events like your child’s wedding, education etc.
Any investments your family could make in the future

The sum insured should be the value that you arrive at after summing up these factors. Remember that you must make provision for in inflation when estimating future expenses. This is because if it takes Rs. 1 lakh a month today to maintain your lifestyle, it will cost much more 10 years down the line. Alternatively, you can top-up your risk cover by 5-10% every year. This facility is available in many term plans.

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5 How to buy Term Insurance Plan

Purchasing insurance online is an easy process. One should keep scanned copies of passport size photo, address proof, age proof, identity proof and income proof handy. It is important to be completely aware about the medical history of the person who is going to get insured. If the questions posed by the portal are answered incorrectly, this would have an impact while fIling claims.