Term Insurance

What Is Term Insurance?

Term Insurance is a type of life insurance policy that provides financial protection to your loved ones in case of your untimely demise during the policy term. It is a pure protection plan that offers a substantial life cover at affordable premiums, ensuring your family’s financial stability when they need it the most. Unlike traditional life insurance, term plans focus solely on providing life coverage without investment or savings components.

Term Insurance Plan: Inclusions And Exclusions

Understanding what a term insurance plan covers and excludes is crucial for making an informed decision. Here’s a breakdown:

What Are the Best Term Insurance Plans in India 2024?

Aditya Birla Sun Life Insurance (ABSLI) offers a range of term insurance plans designed to cater to diverse financial needs:

1. ABSLI DigiShield Plan:

• Multiple Plan Options: Offers 10 distinct plan options, including Level Cover, Increasing Cover, and Whole Life Cover, allowing customization to your financial goals.
• Coverage Up to 100 Years: Provides life cover extending up to 100 years of age.
• Flexible Payouts: Choose between lump-sum, monthly income, or a combination for death benefit payouts.
• Optional Riders: Enhance coverage with riders like Accidental Death Benefit and Critical Illness Rider.

2. ABSLI Salaried Term Plan:

• Tailored for Salaried Individuals: Designed specifically for salaried professionals, offering financial security to their families.
• Multiple Plan Options: Includes Life Cover, Life Cover with Return of Premium, Fixed Income Cover, and Increasing Income Cover.
• Inbuilt Terminal Illness Benefit: Provides early payout upon diagnosis of a terminal illness.
• Additional Riders: Option to add riders such as Accidental Death and Disability Rider and Waiver of Premium Rider.
  

These plans are crafted to offer comprehensive protection, ensuring your loved ones are financially secure in your absence.

What is a Term Insurance Rider?

A Term Insurance Rider is an additional benefit that you can add to your base term insurance policy to enhance its coverage. Riders allow you to customise your plan to meet specific needs and provide financial protection in unique circumstances. They come at an extra premium but offer significant value by covering risks beyond the basic life cover.

Common Types of Term Insurance Riders:

• Accidental Death Benefit Rider: Provides an additional payout if the policyholder dies due to an accident.
• Critical Illness Rider: Offers financial support upon the diagnosis of life-threatening illnesses like cancer, heart attack, or stroke.
• Waiver of Premium Rider: Waives off future premiums if the policyholder becomes disabled or critically ill and cannot pay.
• Accidental Disability Rider: Provides a payout if the policyholder becomes permanently disabled due to an accident.

Riders help you customise your term insurance to offer broader protection for yourself and your loved ones, ensuring a comprehensive financial safety net.

How To Choose The Best Term Insurance Plan?

Selecting the right term insurance plan requires careful evaluation of your financial goals and family’s needs. Here are some tips to help you make the best choice:

1. Assess Your Coverage Needs: Calculate the sum assured based on your income, liabilities, lifestyle expenses, and future financial goals like children’s education and marriage. A general rule is to opt for coverage at least 10-15 times your annual income.

2. Choose the Right Policy Term: Select a policy term that aligns with your financial obligations. Ideally, it should cover you until your retirement or until your major liabilities are cleared.

3. Compare Premiums: Compare the premiums offered by different term plans for the desired coverage. Ensure that the plan provides maximum benefits at a reasonable cost.

4. Look for Customisation Options: Opt for plans that allow you to add riders like critical illness or accidental death benefits for enhanced protection.

5. Check the Claim Settlement Ratio: Choose an insurer with a high claim settlement ratio, ensuring your family’s claim is processed smoothly and promptly.

6. Evaluate Payout Options: Select a plan that offers flexible payout options, such as lump sum, monthly income, or a combination, to meet your family’s financial needs effectively.

7. Tax Benefits^*: Ensure the plan provides tax benefits* under Section 80C and Section 10(10D)** of the Income Tax Act, making it a financially sound choice.

8. Read the Fine Print: Understand the inclusions, exclusions, and terms of the policy thoroughly before purchasing. Seek clarity on waiting periods, claim processes, and surrender rules.

By evaluating these factors, you can select a term insurance plan that provides comprehensive protection and aligns with your financial objectives.

Why Choose a Higher Sum Assured for Better Family Protection

Opting for a higher sum assured ensures that your family remains financially secure in your absence. Here’s why it matters:

1. Covers Rising Living Costs: With inflation increasing expenses year after year, a higher sum assured ensures your family’s standard of living remains unaffected.

2. Sufficient to Pay Off Liabilities: A larger cover provides enough funds to clear outstanding loans or debts, such as home loans, personal loans, or car loans, relieving your family of financial stress.

3. Meets Long-Term Goals: Higher coverage ensures that future milestones like your children’s education, marriage, or starting a business are achieved without financial hurdles.

4. Provides Comprehensive Protection: A higher sum assured acts as a safety net for unforeseen expenses, such as medical emergencies or lifestyle adjustments, ensuring peace of mind for your loved ones.

5. Affordable at a Younger Age: Buying a high sum assured term plan at a younger age means you lock in lower premiums for substantial coverage, offering better value over the policy term.

Choosing a higher sum assured aligns with your commitment to providing robust financial protection for your family, ensuring they remain secure even in your absence.

What Documents and Eligibility Are Required for a Term Insurance Plan?

Eligibility Criteria:

The basic eligibility criteria for term insurance plans are as follows:

• Minimum Age: 18 years at the time of policy purchase.

• Maximum Age: Generally up to 65 years (varies by insurer and plan).

• Policy Term: Typically ranges from 5 to 40 years or up to a specific age (e.g., 75-100 years).

• Medical Fitness: Depending on the sum assured and age, some plans may require medical tests to assess insurability.

Documents Required:

To apply for a term insurance plan, you’ll need to provide the following documents:

1. Identity Proof:

• Aadhaar Card

• PAN Card

• Passport

• Voter ID

  
  

2. Address Proof:

• Aadhaar Card

• Utility Bills (Electricity, Gas, Water)

• Passport

• Rent Agreement

  
  

3. Age Proof:

• Birth Certificate

• Passport

• School Leaving Certificate

  
  

4. Income Proof:

• Salary Slips (Last 3 Months)

• Income Tax Returns

• Bank Statements

5. Photographs:

• Recent passport-sized photographs.

6. Medical Records (if applicable):

• Reports from any required medical tests, based on the sum assured or specific plan requirements.

Why choose ABSLI Term life insurance plan?

Choosing a term life insurance plan from Aditya Birla Sun Life Insurance (ABSLI) offers several compelling benefits that ensure comprehensive financial protection for your loved ones:

1. Diverse Plan Options: ABSLI provides multiple term insurance plans, such as the ABSLI DigiShield Plan and the ABSLI Life Shield Plan, each offering various options to cater to individual protection needs.

2. High Coverage at Affordable Premiums: Secure substantial life cover at competitive premium rates, ensuring your family's financial stability without straining your budget.

3. Flexible Payout Options: Choose from lump-sum payments, staggered payments with fixed annual income, or staggered payments with increasing annual income, allowing you to tailor the death benefit to your family's financial requirements.

4. Comprehensive Rider Options: Enhance your policy with optional riders like Accidental Death and Disability, Critical Illness, Surgical Care, and Hospital Care, providing additional layers of protection.

5. Joint Life Protection: Some plans offer the option to cover both you and your spouse under a single policy, ensuring comprehensive family protection.

6. Return of Premium Option: Certain plans provide a return of all premiums paid if you outlive the policy term, combining protection with savings.

7. Enhanced Life Stage Protection: Increase your life cover at significant life stages, such as marriage or the birth of a child, ensuring your coverage adapts to your evolving responsibilities.

8. Tax Benefits: Premiums paid towards ABSLI term insurance plans are eligible for tax deductions under Section 80C of the Income Tax Act, 1961, and the death benefit is generally tax-exempt under Section 10(10D)**.

By choosing an ABSLI term life insurance plan, you ensure a robust financial safety net for your family, tailored to your specific needs and life stages.