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choosing the Best Term Insurance Plan in India 2021

juliee smithh

A term insurance plan is a life insurance policy where a fixed assured sum is paid upon the insured person’s death. It is a fundamental type of life insurance policy. By paying a fixed amount called premium, usually annually, the insured person’s family gets a lump sum payout upon their death. So, having term insurance is necessary for any person who has dependents or has a family to support.

An online term insurance policy comparison can help choose the best term insurance plan regarding the premium amount to be paid for the desired sum insured. 

Since the plan benefits and features offered by insurance brokers online varyit’s important to understand and list out the individual reasons to buy a certain term plan. 

Here is a list of a few features and benefits that are critical for choosing the correct term insurance plan:

1. Entry age for term insurance- 

a. The minimum age to enter into term insurance is usually 18 years. 

b. The upper age limit could be anywhere from 50 years to 70 years, as most providers have rebates and incentives for younger people to encourage them to enroll in their term plans.

2. Policy term varies from 5 years to 85 years, depending on when one begins the plan. In this context, the premium amount payable could also change.

3. Some plans cover critical illness benefits and terminal illness as part of the term plan and are included in the premium.

4. Some term plans come with rewards for a healthy lifestyle.

5. All term policies allow the policyholder to save on tax under Sec 80C only or under Sec 10 (10D) of the IT Act.

6. Preferences are given for female policy buyers and non-smokers by way of rebates and sign-up paybacks. 

7. Some term plans encourage people to buy term plans online, and in turn, there are options to do so online as well at your convenience.

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8. The policyholders today have a lot of flexibility to customize the plan as per their requirements and paying capacity:

a. Payment of premiums options– Annual or bi-annual.

b. Term plans come with Life or Life plus disability or Life with a return of premium.

c. Flexible coverage– Can start at one level and then either increase or decrease benefits covered by the policy.

d. Optional In-built Cover– In addition to Life, policies could cover more in-built options like accidental death, accidental total along with permanent disability, or with child support benefits.

e. Payout Options- This can be paid in one installment to the nominee as mentioned in the policy. Another choice is for the payout to be first given as a lump-sum amount, then later as progressively increasing or as fixed monthly or annual payments.

9. Some term plans offer a free trial period of 10-30 days.

10. A few term plans offer individual coverage to the spouse under the same plan.

11. Some plans do not need a medical test for issuing a term insurance policy. A self-declaring medical history is good enough to offer a policy.

Based on the key parameters– entry age, health condition, and the insurer’s income, the provider would be able to decide on the sum insured, premium, term, and more. An online term insurance policy comparison assists in then giving at a glance the best term plan against any eventuality. 

Before opening up the term insurance market to private players, Life Insurance Corporation of India (LIC) was the only issuer of Life term insurance in India. There were no insurance brokers online. But today, with more and more private firms offering term insurance plans– some even giving exclusive online options, the market is growing, and there is healthy competition. Hence, choosing and customizing a term insurance plan is possible in India now. 

While choosing the most relevant term plan and the right provider, it is best to consider the premium payments and IT benefits, including the providers’ track record in claim settlement. Further, one should be accurate about the facts shared with the provider, including medical history, to avoid fraud, misrepresentation, or delay in payout to the nominee. 

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