Term Insurance

• Coverage/Cover -
  

  The extent to which an insurance policy covers the insured individual.
  For example – Consider an individual who purchases an insurance policy which offers cover of Rs 1 crore. If he passes away while still being protected under the insurance policy, his dependents would receive the cover of Rs 1 crore.

   

• Premium -
  

  The insurance premium is the amount that is periodically paid by the insured party to the insurer.

   

• Accidental Death Benefit -
  

  The additional benefit paid out in case the death occurs in an accident.

   

• Annuity -
  

  Periodic payments made by the insurer to the nominee for a specified period or till survival.

   

• Death Benefit -
  

  The amount that will be paid in the event of the death of the insured.

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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HDFC Life Click 2 Protect Life is a term insurance plan that offers plan options to accommodate various scenarios.

Here are the 3 plan options for you to pick from.

Life & CI Rebalance Option

A smart cover which aims to achieve a balance between Death and Critical Illness benefit as you go along in your life. Critical Illness cover increases at each policy anniversary with corresponding reduction in Life Cover. In addition, all future premiums are waived off on detection of any of the covered Critical Illnesses and the life cover continues.

Life Protect Option

Under this plan option, a lump sum is provided on death of the life assured.

Income Plus Option

Under this plan option, the Life Assured is covered for the entire policy term and also receives a lump sum payout on maturity along with regular income starting from age 60.
Now that you know all about term insurance, pick the most suitable option to PROTECT YOUR FAMILY.

Servicing is done online

Most online insurers have a chat facility on their website to assist those who are not very comfortable with purchasing insurance online. Insurers also communicate with customers over email and social media. E-copies of documents are sent online which are stored in the customer’s email id. This makes it simpler for customer to refer to policy details even if hard copies are misplaced.

Ease of gathering information

Before purchasing an insurance policy, a prospective buyer can research about various insurers as well as their offerings. This is easily possible thanks to insurance aggregators. One can read various articles about different types of insurance products as well as scrutinize reviews offered by customers before finalizing the product and the insurer.

Ease of conducting transaction

One can complete the entire process of purchasing insurance – right from research to finally receiving the documents from the comfort of one’s home or office.

Cost savings for customer

The entire process of purchasing term insurance online is paperless. The distributor commission is also eliminated as customer is buying directly from the insurer online. This enables the insurer to offer you savings in the form of lower premiums

Ease of taking decision

Now a days, leading insurers as well as aggregators pose intuitive and logic driven questions to a prospective buyer. On the basis of the answers, options are offered to the prospective buyer. This makes it extremely easy for an individual to choose the appropriate policy.

Claim settlement status

Leading insurers have developed mobile applications to smoothen the claim settlement process. Customers can be kept intimated about claim settlement status through email and sms.

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To buy term insurance, you will need to submit the following documents:

1. Any one of these Officially Valid Documents as ID and Address Proof:

Passport, Voter’s ID, Aadhaar Card, PAN Card, National Population Register containing details of name, address and Aadhaar number, or any other Central Government issued document

In case Officially Valid Documents does not contain updated address, you may submit any one of the following as Address Proof:

Property or Municipal Tax Receipt, Utility Bill of electricity, telephone, post-paid mobile connection, piped gas, water not more than two months old, Pension or family pension payment orders (PPOs) issued to retired

2. Any one document can be used as Income Proof for the Salaried:

Bank statement showing salary credit for the latest 3 months, Latest year Form 16, Latest 2 years Income Tax Returns

3. Any one document can be used as Income Proof for the Self-Employed:

Form 26 AS, CA certified Audited balance sheet and profit loss account for latest 2 years, Latest 2 years Income tax returns not filed in the same year along with Computation of income. If the computation of income is not available, you will need to provide the income tax returns for the last 3 years.

Yes, you can have multiple term insurance policies in order to ensure that your loved ones can achieve their life goals in the case of any unfortunate event. They can also manage to pay off liabilities such as loans in your absence.

Yes, the HDFC Life Term Plan covers issues related to health and death. There are riders that come with the term plan among which are the basic death benefits and health benefits that you can avail in accordance to your needs. Being the cheapest and one of the most affordable types of insurance available, term insurance plans serve to provide protection with a life cover for your family.

The critical illness rider can be opted for protection from a critical illness. In such a case, you will receive the sum assured upon diagnosis. This is in addition to the benefits that are to be received in case of death during the policy term.

In case of unforeseeable events within the policy term, the nominee that you chose while filing for the term insurance receives the death benefits. The nominee, who is also referred to as the beneficiary, receives a lump sum amount as part of death benefits.

It is a smarter move to invest in term insurance plans in comparison to traditional life insurance policies. While both cover the risk of premature death, the difference between term insurance and life insurance lies at the point of maturity.

A conventional life insurance plan with maturity benefits, like moneyback policies, endowment policies, retirement policies, etc., is typically 10 times its premium amount. From the perspective of wealth creation, such products provide 3% to 4% interest rate which is largely what you get had you kept your funds in your savings bank account. With term insurance policies your net gain is higher in comparison to a life insurance product that comes with a maturity benefit.

However, the choice needs to be on the basis of your life goals.

Other benefits that make buying a term plan a wise decision are:

Death Benefit: Even though term life insurance provides a death benefit in the event of the policyholder’s demise prior to the maturity of the term policy as opposed to life insurance offering both death and maturity benefit, the compensation offered by a term insurance policy's much higher.

Low Premiums: Term plans offer higher risk coverage on low premium but does not create wealth like life insurance policies.

Flexibility: It is a much simpler process to surrender term plans compared to conventional life insurance policies.

There might be instances when you would like the change the premium payment frequency.

“For example - If you have been paying your premium yearly, you might want to change it to monthly or if you have been paying your premium monthly, you might want to change it to yearly.”

With HDFC Life’s term insurance policy, you can change your premium payment frequency anytime.

Term insurance plans generally do not offer maturity benefits, so they do not have any cash value. Given this, it is not possible to cash out a term insurance policy. The policy will only provide a cash benefit in case something happens to the insured individual.

Yes. The premium you pay for the upkeep of your term plan, up to INR 1,50,000 per year, is tax-deductible under Section 80C of the Income Tax Act, 1961. Additionally, the payout you or your nominee receive will also be tax-free under Section 10(10D)

Ideally, you should select a term for your whole life or one that will see you through until your retirement. You can purchase a policy when you’re in your 20s for affordable premiums in the coming years

Your decision should depend on your financial ability to pay premiums. If you can afford small regular payments, you can commit to a regular pay term plan. With this option, you can pay every month, quarter, six months or year. Conversely, if you can afford to payhigher premiums quicker, you can opt for a limited pay option.

Yes, many insurance providers will allow you to change the frequency with which you make premium payments toward your term insurance plan. But, you will only be able to make the change when the policy is up for annual renewal.

This depends on the type of plan you purchase. If you have a return of premium policy, the insurance provider will return the premium amount once the policy expires. Most regular term plans do not offer any monetary benefit at the end of the policy term if the insured survives.

If you happen to shift residence out of India after purchasing a term plan, you must let your insurance provider know about the upcoming shift in writing. The company will then confirm whether they will keep your policy active or not. Typically, they will keep your policy going as long as you pay the premiums on time. However, some policy providers will not cover risks in particular countries. So, make sure you document their approval before you move.

When you opt to purchase HDFC Life’s Click 2 Protect Life Term Insurance plan, you can enjoy the following benefits:

Sum assured paid to your nominee in case anything happens to you

• Return of Premium is payable on maturity if you outlive the policy term
• Waiver of future premiums in case you are diagnosed with a critical illness
• Payment of the decided sum assured on diagnosis of a critical illness
• Payment of the decided sum assured if an accident renders you permanently disabled

*The above benefits are for different plan options & add-on benefits. Please refer the product brochure for detailed understanding

Yes. After you have purchased a term insurance policy, you are free to update the name of your nominee at any time. You may want to add a spouse after you get married or add your children as nominees as well.

It’s a good idea to purchase an individual term plan even if you’re covered under your company’s group policy. Group term plans often do not offer very high cover amounts. Individual plans, on the other hand, can be customised to suit your individual needs. You can decide your sum assured and how you’d like the payouts to be made to your nominees. Individual plans also offer continuous cover, which may not always be the case with group plans. If you happen to leave the group, you will no longer enjoy the life cover offered, which leaves you and your family with significant financial risk. With both an individual and a group policy, you can enjoy enhanced cover at all times, irrespective of whether you opt to change your job at any time.

With a term insurance policy, if the insured individual fails to pay the premium before the due date, the policy will automatically lapse. This means that you will have to forfeit all the premiums paid so far and the insurance benefits. If you would like to get life cover again, you will likely have to purchase an entirely new policy.

Term insurance policies mainly offer the nominees of the individual a death benefit. If you happen to outlive your policy, the policy will end so you no longer have life cover and in most cases, you will not receive any kind of maturity benefit. If you’ve purchased a term plan that offers a maturity benefit, then you will receive it once the policy term expires. Before the term expires, you have the option of converting your term life insurance policy into a regular life insurance policy. You can check with your insurance provider on whether this is possible and ask about the process for the same.

The term insurance policy that you choose will depend on your financial requirements. First, you must decide whether you want a simple term plan or if you’d like to get critical illness and disability cover as well. Next, you should look for policies that also offer maturity benefits, such as the return of the premium. Finally, you should look at the sum assured on offer. The sum assured that you opt for will depend on the number of dependents you have and the kind of lifestyle you’d like your family to enjoy in the future. Once you understand your needs and requirements, you’ll be able to select the right term insurance policy.