Term Insurance

If the nominee is unaware of the term insurance policy, they might not claim the death benefit. It's important for policyholders to inform their nominees about the policy, its details, and where the documents are stored. However, if the insurer finds out about the death of a policyholder, they are obligated to reach out to the nominee if possible, but this depends on the insurer having up-to-date contact information.

Yes, a claim can be rejected if the policyholder failed to disclose significant medical conditions or lifestyle habits (like smoking) at the time of policy purchase. Insurers consider this non-disclosure or misrepresentation of facts, which can affect the policy's validity. It's crucial to provide accurate and complete information during the application process to avoid issues during claim settlement.

The time taken to process a term insurance claim can vary by insurer, but as per regulatory guidelines, insurers are typically required to settle or reject a claim within 30 days of receiving all necessary documents. In cases where an investigation is needed, this period may be extended but usually does not exceed 90 days from the date of claim intimation.

The nominee should inform the insurance company as soon as possible after the policyholder's death. They will need to submit a claim form, along with the policy document, death certificate, and any other documents the insurer requires, such as a post-mortem report if applicable. The insurer will review the claim and, if approved, disburse the death benefit to the nominee.

Common exclusions include death due to suicide within the first year of the policy, death caused by involvement in illegal activities, substance abuse, and certain pre-existing health conditions not disclosed at the time of policy purchase. Policies may also exclude deaths due to certain risky activities unless specifically covered.

Yes, you can buy multiple term insurance policies based on your coverage needs. People often buy additional policies to increase coverage due to changes in income, financial liabilities, or family size. Each policy's premium will be based on your age, health, and coverage amount at the time of purchase.

Yes, the premiums paid towards term insurance are eligible for tax deductions under Section 80C of the Income Tax Act, up to a limit of ₹1.5 lakhs. Additionally, the death benefit received by the nominee is tax-free under Section 10(10D)****, subject to certain conditions.

Many term insurance plans offer the flexibility to increase the coverage amount during certain life stages, such as marriage or the birth of a child, without the need for medical examination. However, this feature varies by insurer and plan, so it's important to check the specific terms of your policy.

Your term insurance premium is calculated based on several factors including your age, health condition, lifestyle (such as smoking status), the sum assured you opt for, the policy term, and any additional riders you choose. Younger, healthier individuals typically pay lower premiums. High-risk factors, like smoking or pre-existing health conditions, may increase the premium.

The best time to buy a term insurance plan is as early as possible. Premiums are lower when you are young and healthy. Starting early also ensures longer coverage and can provide financial security for your family when they need it the most. It's advisable to buy term insurance when you start earning or have financial dependents.

Yes, buying term insurance is a wise decision for most people. It offers high coverage at affordable premiums, ensuring financial security for your family at a minimal cost. Moreover, it provides peace of mind knowing your loved ones will be financially taken care of in case something happens to you.

Term insurance can be cancelled by the insurer if the policyholder fails to pay the premiums within the grace period, or if there was fraud or misrepresentation on the application. However, as long as premiums are paid on time and all information provided is accurate, the insurer cannot cancel the policy before the end of the term.

An accelerated death benefit rider in term insurance allows the policyholder to receive a portion of the death benefit while still alive if diagnosed with a terminal illness. This can provide financial relief for medical expenses or other needs during a difficult time. The amount received is typically deducted from the death benefit that will be paid out to the beneficiaries upon the policyholder's death.

Yes, you can purchase term insurance for your business partners. This is commonly done through a buy-sell agreement, where each partner takes out a term insurance policy on the other partners. In the event of a partner's death, the death benefit can be used to buy out the deceased partner's share of the business, ensuring continuity and financial stability.

The underwriting process for term insurance can vary depending on the insurance company and the complexity of the applicant's health and financial situation. On average, it can take anywhere from a few days to several weeks. Simplified issue policies may have a quicker underwriting process, while policies that require a medical exam and more detailed underwriting may take longer.

If your term insurance needs change, you should contact your insurance provider to discuss your options. Depending on your policy, you may be able to increase or decrease your coverage amount, add or remove riders, or convert your term policy into a permanent policy. It's important to regularly review your insurance coverage to ensure it aligns with your current financial situation and future goals.

A medical exam is not always required to obtain term insurance. Some insurance companies offer "simplified issue" or "guaranteed# issue" term insurance policies that do not require a medical exam. However, these policies may have higher premiums or lower coverage amounts compared to policies that do require a medical exam. For traditional term insurance policies, a medical exam is often required to assess the applicant's health and determine the premium rate.

Yes, non-working spouses can obtain term insurance. Insurers recognize the economic value of the contributions made by non-working spouses, such as homemaking and caregiving, and offer term insurance policies to provide financial protection for their families in the event of their untimely death. The coverage amount and premium rates may be based on the working spouse's income and the overall financial situation of the family.

In many countries, term insurance proceeds are not subject to income taxes but may be subject to estate taxes if the total value of the deceased's estate exceeds a certain threshold. The specifics can vary based on the tax laws of the country or state in which the policyholder resides. It's important to consult with a tax advisor or estate planning professional to understand the potential tax implications of term insurance proceeds.

A convertible term insurance policy is a type of term insurance that offers the policyholder the option to convert the policy into a permanent life insurance policy, such as whole life or universal life, without undergoing a new medical examination. This feature provides flexibility, allowing the policyholder to adjust their coverage as their needs change over time, such as increasing financial responsibilities or changing health conditions.

Typically, term insurance premiums are fixed and do not change during the policy term. Once the premium rate is set at the beginning of the policy, it remains constant throughout the term. However, there are some types of term insurance policies, such as increasing term insurance, where the premium may increase at predetermined intervals to provide increasing coverage. It's important to understand the terms of your policy to know whether your premiums can change during the policy term.

Underwriting in the context of term insurance is the process used by insurers to assess the risk associated with insuring an individual. This involves evaluating factors such as age, health, lifestyle, occupation, and medical history to determine the premium rate and coverage terms. The underwriting process helps insurers to price the policy appropriately based on the risk profile of the applicant.

To decrease the cost of your term insurance premium, consider the following strategies:
● Buy Early: The younger you are when you purchase the policy, the lower the premium will be.
● Choose the Right Term: Opt for a policy term that best suits your needs without being unnecessarily long.
● Maintain a Healthy Lifestyle: Non-smokers and individuals with a healthy BMI typically enjoy lower premiums.
● Opt for Annual Payments: Paying premiums annually instead of monthly or quarterly can result in lower overall costs.
● Compare Policies: Shop around and compare different policies to find the most cost-effective option.
● Avoid Unnecessary Riders: Only add riders that are essential to your needs to avoid increasing the premium.

Yes, it is possible to nominate multiple beneficiaries in a term insurance policy. You can specify the percentage of the death benefit that each beneficiary will receive in the event of your death. It's important to clearly designate the beneficiaries and their respective shares to avoid any confusion or disputes during the claim settlement process. You can also change the beneficiaries during the policy term, subject to the terms and conditions of the policy.

If you miss paying your term insurance premium within the grace period, your policy will lapse, and the coverage will cease. This means that in the event of your death after the policy has lapsed, your beneficiaries will not receive the death benefit. Some insurers may offer a reinstatement period during which you can pay the overdue premium along with any interest or penalties to reinstate the lapsed policy. However, the terms for reinstatement vary among insurers, and there may be additional conditions, such as providing evidence of insurability.

Yes, term insurance policies can cover critical illnesses and disabilities through additional riders or endorsements that can be added to the base policy, usually at an extra cost. A critical illness rider provides a lump sum benefit if the policyholder is diagnosed with one of the specified critical illnesses, such as cancer, heart attack, or stroke. A disability rider typically offers financial protection by waiving future premiums or providing a regular income in case of total and permanent disability. It's important to read the terms and conditions of these riders carefully to understand the coverage and exclusions.

Smoking is considered a health risk, and smokers generally pay higher premiums for term insurance compared to non-smokers. Insurers categorize smokers as higher risk because of the increased likelihood of health issues and a shorter life expectancy, which increases the likelihood of a claim being made during the term of the policy.

The grace period is the time allowed after the due date of a premium payment, during which the policy remains in force, and the policyholder can pay the premium without any penalty. The grace period is typically 15 to 30 days, depending on the insurer and the policy terms. If the premium is not paid within the grace period, the policy may lapse.

Yes, there are term insurance plans known as "Return of Premium" (ROP) plans, where the premiums paid are returned to the policyholder if they survive the policy term. These plans typically have higher premiums compared to regular term insurance policies due to the added benefit of premium return.

In most cases, once a term insurance policy has been issued, the coverage amount cannot be adjusted. However, some insurers may offer flexible policies that allow you to increase or decrease your coverage under certain conditions, such as major life events (e.g., marriage, childbirth). It's important to check the specific terms and conditions of your policy or consult with your insurance provider to understand your options.

The claim settlement ratio is the percentage of insurance claims that an insurer has settled compared to the total number of claims received in a particular period. It is an important indicator of the insurer's reliability and efficiency in settling claims. A higher claim settlement ratio suggests that the insurer is more likely to pay out claims, making it a crucial factor to consider when choosing a term insurance provider.

Yes, you can have multiple term insurance policies. This can be useful if you want to increase your coverage at different stages of your life or if you want to have policies with different terms and benefits. The total coverage from all your policies should align with your financial needs and goals.

The minimum age to purchase a term insurance policy is typically 18 years, while the maximum age varies between 60-65 years, depending on the insurer and the plan.

Smokers are considered higher-risk individuals due to the increased likelihood of health issues and shorter life expectancy. This results in higher premiums to account for the additional risk

The age limit to purchase term insurance ranges from 18 to 65 years, while the maximum maturity age can go up to 75-100 years, depending on the insurer.

The primary purpose of term life insurance is to provide financial security to your family in the event of your untimely demise, ensuring they can maintain their lifestyle and meet financial goals.

In a standard term insurance plan, there is no maturity benefit. However, with a Return of Premium (ROP) term plan, you get back the premiums paid if you outlive the policy term.

● No Savings Component: Pure term plans do not build cash value or savings.
● No Maturity Benefit: Unless you opt for a return of premium plan, you won't receive any money if you survive the policy term.
● Premium Increases with Age: Delaying purchase leads to higher premiums.

In a standard term insurance policy, no. However, Return of Premium plans refund the total premiums paid if you survive the policy term.

● Limited Pay: Allows you to pay premiums for a shorter period (e.g., 5 or 10 years), ideal if you want to finish payments early while maintaining coverage.
● Regular Pay: Spreads premium payments across the policy term, offering affordability and flexibility. Choose based on your financial stability and preferences.

Select a term length that covers your financial obligations, such as your working years, loan repayment period, or until your dependents become financially independent.

Many term insurance policies offer a renewal option that allows you to extend your coverage without undergoing a new medical examination. However, the premiums for the renewed policy may be higher, reflecting your older age and any changes in your health status. It's important to check the specific terms and conditions of your policy regarding renewal.

If you outlive your term insurance policy, the coverage ends, and you do not receive any payout. Term insurance is designed to provide financial protection for a specific period. If you wish to continue having coverage, you may need to consider renewing your policy, converting it to a whole life policy (if applicable), or purchasing a new policy.

In most cases, the death benefit received from a term insurance policy is tax-free for the beneficiaries under Section 10(10D)**** of the Income Tax Act, 1961. However, there are certain exceptions, such as policies where the premium exceeds 10% of the sum assured for policies issued after April 1, 2012. It's advisable to consult a tax professional for specific tax implications based on your policy and personal circumstances.

A term insurance rider is an additional benefit that can be added to your term insurance policy for extra coverage or specific protections. Riders typically come with an additional cost and can include options like critical illness coverage, accidental death benefit, waiver of premium, and income benefit rider, among others. For example, if you add a critical illness rider to your term insurance policy, you may receive a lump sum payment if you are diagnosed with a covered critical illness.

Yes, some term insurance policies offer a conversion option that allows you to convert your term policy into a whole life policy without undergoing a new medical examination. However, this option is subject to the terms and conditions of the policy, and there may be a deadline for conversion. It's important to check with your insurance provider for specific details.

● Age and Gender: Younger individuals and women generally pay lower premiums.
● Health Condition: Pre-existing illnesses or habits like smoking increase premiums.
● Coverage Amount: Higher sum assured leads to higher premiums.
● Policy Term: Longer policy terms typically have higher premiums.
● Lifestyle Choices: Risky hobbies or occupations may increase premiums.

● Term Insurance: Provides coverage for a fixed period and focuses on protection.
● Whole Life Insurance: Offers lifetime coverage and includes a savings component.

Yes, term insurance is a wise financial decision to secure your family’s future. It offers high coverage at affordable premiums, making it an essential part of financial planning.

● Compare plans based on coverage, premiums, and claim settlement ratios.
● Evaluate add-ons like critical illness cover and payout flexibility.
● Choose a trusted insurer with a strong track record.

● Standard Term Plan: Offers only death benefits without maturity benefits.
● Return of Premium Plan (ROP): Refunds all premiums paid if you survive the policy term.

● High sum assured at low premiums.
● Flexible policy terms and premium payment options.
● Add-ons for enhanced protection.
● Tax benefits* under Section 80C and Section 10(10D)**.
● No maturity benefit (in standard plans).

● Financial security for your family.
● Debt protection for loans and liabilities.
● Affordable premiums.
● Tax advantages.

● Sole breadwinners.
● Young professionals starting financial planning.
● Parents securing their children’s future.
● Individuals with loans or liabilities.

Yes, term insurance provides essential financial protection for your family at an affordable cost, making it one of the most valuable investments for peace of mind.

ABSLI offers excellent term plans like ABSLI DigiShield Plan and ABSLI Life Shield Plan with customisable options to suit your needs.

● Assess your financial goals and liabilities.
● Choose adequate coverage and policy term.
● Compare premiums, features, and add-ons.
● Select a trusted insurer with a high claim settlement ratio.

The ABSLI DigiShield Plan and ABSLI Life Shield Plan are top choices, offering flexibility, high coverage, and optional riders to meet diverse needs.

The ideal age to buy term insurance is in your 20s or early 30s, as premiums are significantly lower, and you can secure coverage for a longer term.

In many countries, term insurance proceeds are not subject to income taxes but may be subject to estate taxes if the total value of the deceased's estate exceeds a certain threshold. The specifics can vary based on the tax laws of the country or state in which the policyholder resides. It's important to consult with a tax advisor or estate planning professional to understand the potential tax implications of term insurance proceeds.

Yes, the premiums paid towards term insurance are eligible for tax deductions subject to Section 80C of the Income Tax Act, up to a limit of ₹1.5 lakhs. Additionally, the death benefit received by the nominee is tax-free under Section 10(10D)**, subject to certain conditions.