Term Insurance

If you have loans for things like a home or car, term insurance can protect your family from these debts after you pass away. This financial support ensures they can keep the assets you worked hard for, without the stress of outstanding payments.

When a family loses their main earner, it can be very challenging to manage finance. Term insurance provides essential financial support to help your family during this tough time. It ensures your loved ones can maintain their standard of living and manage daily expenses without the burden of financial stress. This support is crucial for helping them adjust and move forward without you.

Term insurance policy is the purest form of life insurance that primarily provides financial protection only in case of death. Since term plan is the simplest type of life insurance you can avail adequate death benefit at very affordable premiums. You can buy the best term insurance plan for 1 crore at just Rs.21/day***.

Life is unpredictable and full of uncertainties. In India road accidents killed 474 daily on average in 2023 (source: The Times of India¹⁶) and 8,89,742 cancer deaths were registered in 2022 (source: Global Cancer Observatory 2022 Data1¹⁷). Although we cannot prevent unexpected tragic events we can reduce the adverse financial impact that it has. The primary objective of a term insurance is to provide financial protection against untimely death. The death benefit provided to a policyholder’s beneficiary helps prevent any financial struggle due to the policyholder’s absence.

Lifestyle diseases have been one of the leading causes of deaths in India. Deaths due to heart attacks have increased by 12.5% in 2022 when compared to 2021 (source: National Crime Records Bureau). While it is important to live a healthy lifestyle, it is also wise to protect your family’s financial future. This is especially true if you face a serious illness.

Term life insurance offers the option to add riders to enhance the financial coverage. 

The cover amount of the rider is a top-up to the base cover amount of the term plan. You can choose riders for financial protection against critical illnesses, death due to accident or opt for term plan with return of premium to get your premiums back on survival.

Premiums paid for a term insurance are eligible of tax exemptions⁷ of up to Rs. 1, 50,000 under section 80C of the income tax act, 1961. The payout of a term insurance is also exempted from tax under section 10(10D) of the income tax act, 1961⁷. 

An insurance company’s Individual Death Claim Settlement Ratio tells you how likely they are to settle your nominee’s claim. You can check a company’s Individual Death Claim Settlement Ratio online. HDFC Life has a Individual Death Claim Settlement Ratio (CSR) of 99.68%^##

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.

The solvency ratio refers to a company’s ability to financially fulfill the insurance obligations. The IRDAI mandates that all insurance companies should have a solvency ratio of at least 150%. HDFC Life's solvency ratio is 194% for FY25.

Not all term insurance 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.

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.

When you purchase a term plan, 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.

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.

Funeral and cremation expenses are unexpectedly high. However, with a term insurance plan, these expenses can be lowered without worrying about the financial burden. The term insurance payout helps to cover medical bills, costs of funerals, and other outstanding debts, allowing your family to remain stress-free.

If you are the owner of a business, your sudden death can cause your family members to face financial constraints. By opting for a term insurance plan, business continuity can be maintained by providing funds for managing operational costs and paying off bills, thereby facilitating a smooth transfer of your business.

A term insurance plan plays an important role in estate planning, ensuring your financial assets are transferred to your beneficiaries without financial constraints. This insurance plan also assists in covering estate-related taxes and other costs, thereby eliminating the need for your family to sell off valuable assets to reach their desired financial goals and objectives.

By receiving the lump sum amount, you can manage your expenditure with ease and keep your loved and dear ones stress-free from financial obligations. 

Nowadays, many people have several loans, such as car loans, personal loans, home loans, and others. These liabilities can become a great burden on families when the borrower is not around. Receiving the death benefits from a term insurance plan can assist your loved ones in settling these loans and prevent them from taking on additional debt burden. 

The lost income can be replaced through payouts from a term plan. For families with larger financial responsibilities, a 5 crore term insurance can help maintain their standard of living and support long-term goals. This ensures a decent lifestyle for the surviving family members and meets their respective financial needs even when the primary breadwinner is not around.

The main objective of a term insurance plan is that it provides death benefits to your family members during your sudden demise. With this lump sum amount, your family can cover different financial obligations that include outstanding loans, daily expenses, rent payments, outstanding loans, and educational expenses and meet other financial goals and objectives.

Research indicates that women tend to live longer than men on average. As a result, insurance companies often offer women more favorable premium rates in term plans, since they’re likely to be insured for a longer period. It’s a way to reflect the longer life expectancy!

When you buy a term plan, you’ll need to share some details about your health and your family's medical history. Certain conditions, like heart disease or kidney issues, can run in families. If you or your family have a history of these health problems, it might affect your premium, potentially increasing it. But don’t worry—being open about your health can help you find the right coverage for your needs!

If you enjoy adventure sports, drink alcohol regularly, or smoke, you might be considered a higher risk for insurance companies. This can lead to a higher premium on your coverage. It's important to be honest about these habits when applying for term insurance. Being transparent helps ensure that your nominee won’t face issues when making a claim later on. It’s all about protecting your loved ones!

Certain individuals have jobs that place them in risky situations every day. People like sailors and pilots or those who work with hazardous materials may have to pay higher premiums for their term insurance plan than their friends with less dangerous jobs.

The type of benefits you are opting for through a rider along with your term insurance impacts the final premium amount you need to pay. Rider benefits such as cover against critical illness or accidental death are available at a nominal increase in premium of your base term plan.

Consumption of tobacco or alcohol as we all know impacts our health adversely and increases the chances of developing serious illnesses. Due to the increased risk of diseases that you might incur because of consumption of tobacco or alcohol, your premiums will be higher than usual for a term insurance plan.   

The life cover or sum assured amount you choose in your term insurance plays a crucial role in determining the term insurance premium. It should be financially adequate to support your loved ones in your absence, as a higher sum assured will lead to a higher premium, keeping all other factors constant.

The tenure of your term insurance plan is also a crucial factor considered while calculating the premium. Of course deciding on the term of the policy should be a personal choice depending on your financial situation. Among term insurance buyers the most commonly opted policy term is till the age of 85 years. Higher the policy term higher will be the premium keeping all other factors constant. 

There are several options available to pay your premium for a term insurance plan. You have the option to opt for a one time premium payment, limited term premium payment or a regular term premium payment. Of course the premium amount will be different in the 3 scenarios and should be selected as per your convenience.   

Often repayments of our liabilities are a big part of our monthly expenses and thus it becomes imperative that we take a term insurance. Now if you want your term life insurance plan to cover your mortgage, consider the number of years you have left untill you pay off the loans. You would want to avoid the scenario where your term policy expires after 10 years but your liabilities continues for another decade.

Under an ideal scenario you would live off you savings post your retirement. Now if you are getting a term life insurance plan to replace your income, you might not need it post retirement. Once your major expenses like home loan and child’s education are taken care of and you are living your retired life with your savings, you wouldn’t ideally need a term insurance anymore.

You should take your current age into consideration while deciding the adequate length of your term insurance policy. Depending on your age and current financial situation you will be able to decide on how long you should take a term plan for.

Financial protection of your spouse is one of the key responsibilities when your spouse is financially dependent on you. In case of your death the policy tenure along with the life cover of your term insurance plan should be adequate enough to ensure your spouse’s financial security. 

In case if you have financial dependents like your parents, siblings, spouse and children it comes essential that your term insurance tenure is adequate enough to ensure their financial protection in case of your death.

If the policyholder gets diagnosed with a covered terminal illness, they receive the sum assured payout earlier. They can use the money to pay for medical treatments.

Choose to increase your sum assured amount, up to 200% of the plan value, under the policy’s Life variant.

Enhance your cover with the Critical Illness Plus Rider and receive the sum assured payout upfront after covered critical illness diagnosis.

Receive an additional financial safety net with the HDFC Life Protect Plus rider² after an accident leaves the insured permanently disabled or becomes fatal.

Receive a maturity benefit equivalent to all premiums paid over the policy tenure when you choose the return of premium plan option and survive the policy term.

The policy allows you to get additional coverage for your spouse, ensuring that your children remain financially secure, regardless of what happens.

If you cancel your policy, you can use the Smart Exit option to receive an amount equivalent to all base premiums paid at the time of cancellation.

Future premiums of term insurance plans get waived after the diagnosis of a covered critical illness or after total and permanent disability.

Claim settlement ratio is an important factor to decide on which term insurance plan you should go for. HDFC Life Insurance claim settlement ratio for FY25-26 was 99.68%.

People often commit the mistake of taking a life cover that is being sold to them instead of evaluating their financial situation and then taking a decision. There are several ways to conclude on the life cover amount but it is an individualistic decision so it is recommended to access you and your family’s financial needs before taking the decision.

Term insurance plans come along with riders that provide a extensive financial cover for a nominal increase in premiums of base plan. There are various riders available to cover against different mishaps. People often end up ignoring riders perhaps due to lack of understanding of their purpose. Riders such and critical illness rider and accidental death benefit riders help you get a well rounded financial protection in case of unfortunate events. 

While buying a term plan people might end up providing inaccurate of incomplete information in order to save on premiums. It is highly recommended that you provide accurate and complete information to your life insurance provider others wise this might lead to rejection of claim. Insurers have very robust and stringent processes in place to identify inaccurate of incomplete information. 

One common mistake is selecting shorter policy tenure in order to save on premiums. The decision on policy term should be to be taken on the basis of how long you want to financially protect your financial dependents in case you are not there. Suppose for example you believe that all your liabilities will be over, children will be financially independent and your spouse will have adequate savings to survive in case of your demise at a particular age then you should opt the term plan till that particular age.

Not buying a term insurance online has few disadvantages such as not able to calculate and compare premiums easily and not gets discounts that some insurers provide to online customers. Buying term life insurance now a day is really convenient.

Once verification is completed, the insurance company processes the claim. It is mandatory for insurers to settle claims within 15 days from the date of intimation of claim, as mandated by the Insurance Regulatory and Development Authority of India (IRDAI).

However, if there is a need for further investigation, it is the insurer's responsibility to accept or reject the claim within 45 days.

Upon successful approval of the claim process, the nominee receives payment following the terms and conditions of the policy. The entire process, from claim intimation to payout, takes around 15 to 45 days.

If there are discrepancies or missing documents, the insurance company might take longer to complete the process. Thus, it is beneficial to stay in touch with the insurance company and provide the information they need immediately.