Term Insurance Plan & Its Types in India 2022

1.  8108198633  1800 102 2355 [9:30AM-6:30PM]  Branch Locator  Login Insurance Plans Knowledge Center Calculate Premium About Us Customer Service  Search Download the APP Share your details to connect with our Trusted Financial Advisor Name Enter your Name Mobile No Enter your Mobile No Email Id Enter your Email Id Pin Code Enter your Pin Code I agree to receive Generali marketing communication via email... Read more Submit 7 Disclaimer What is a Term Insurance Plan? Do I Need Term Insurance? Why Buy? Term Insurance Premium Calculator Who Should Buy? Eligibility Criteria Key Features Benefits Types of T Home / Insurance Plans TERM INSURANCE PLANS What is a term insurance plan? Term insurance is the most basic and cost-effective type of life insurance. It offers financial protection for the family of the life insured in return of a set amount of premium payment made for the given duration. A death benefit is provided to the insured's family in the event of the insured's death during the policy term. This plan secures your family's needs in the event of your unfortunate demise while offering high coverage at affordable premium prices. Here is one example. Quick Links Source - Future Generali Care Plus Why do i need term insurance? Several factors make buying term life insurance worthwhile, including the following: Financial Safety - If you are the sole provider for your family, you are in charge of providing for the needs of your parents, your spouse, and your kids. To ensure that you can provide for your family's financial needs even if you are not around, it is crucial for this situation to purchase a term insurance plan, which can be the provider like you, after you. To Pay off Loans - You might have acquired many assets through loans, like a house, a business, a car, etc. You may be assured that your family won't be put at financial risk while you're not around because of the burden of these loans. Such loan(s) may be covered by the payout from the term plan in case of an unfortunate event. To Be Ready for the Unexpected - Term plan will assist your family in meeting their long-term objectives and addressing routine expenses in your absence. Option for Income Replacement - Additionally, the term insurance policy may be used to replace lost income. Instead of making a single payment to the nominee in the tragic event that the life assured passes away during the policy term, the dependent nominees may instead receive a number of monthly payments, quarterly payments, or other recurring payments. However, you will be able to use this feature only when the term insurance plan you choose offers it. Why buy term insurance? A term insurance policy is highly recommended for the following reasons: More Cover at a Lower Fee - Pay a small premium to obtain life insurance that is worth crores. Due to this, it is a wise choice for the family's primary earner who wishes to shield his or her loved ones from economic hardship in the event of an unfortunate demise but has a small budget to pay insurance premiums. Complete Protection via Riders - By providing extra coverage, a number of riders can shield you from other risks like critical illnesses, disability, hospitalization etc. Purchase Early to Save More! - Young people are less likely to pass away suddenly than older people. As a result, the premiums are lower for them. Further, the premium in a Term Insurance plan remains the same throughout the Policy duration. So it is advisable to purchase early and make lower fixed payments for the entire policy duration of the term insurance policy. Tax Benefits - According to the rules specified in the Income Tax Act, taxpayers may claim certain tax benefits. Tax benefits under Sections 80C and 10(10D) are the most claimed tax benefits. It should be noted that tax laws may change. The Freedom to Choose - The majority of term insurance policies often give policyholders the option to select the policy term and the frequency of premium payments (annually, half-yearly, quarterly, or monthly), depending on their needs and convenience. How Much Does a Term Plan Cost? Calculate for FREE! 21 Disclaimer Chat With Us What is a term insurance premium calculator?

2. What is a term insurance premium calculator? A term insurance premium calculator is a tool available online. It is specifically made to make it possible to calculate the premium amount that must be paid in order to get the coverage required. The use of term insurance premium calculator is extremely simple. If you want to get a term plan, a term insurance plan calculator can be useful. You simply need to enter the details it asks for like your date of birth, gender, amount of cover or Sum Assured, Policy Term and the years you want to pay etc.. You can adjust the parameters in the calculator basis what you think your family will require in the unfortunate event of your (life assured's) passing. Using a term insurance life calculator has a number of advantages, such as: Time-Saving Technique - The term insurance calculator will help you save a good chunk of time. You do not need any documents to calculate premium. . The calculator will help you with the cost of term cover based on the options selected in under two minutes. Once you've chosen the cover amount, policy term, and many such criteria you can connect with our trusted financial advisor for further process. Budgeting Becomes Simple - A person can use a term plan premium calculator to calculate how much premium s/he will need to pay according on the level of coverage they want. As a result, the person will have a clear understanding and be able to prepare their budget accordingly. Provides a Better Idea of Coverage - If someone has a certain spending limit, the term insurance plan calculator is useful. Calculating the amount of life cover that one can buys within that spending limit is simple. The insurance buyer can also decide whether the chosen term insurance policy is sufficient to offer the family financial security in the event of an emergency. However, if the life coverage is insufficient, one can adjust the premium budget accordingly. So, be sure to utilise the term insurance calculator sensibly. You might spend more time speculating about your premiums than it does to complete the necessary fields on the term plan calculator. It is reliable in addition to being quick and simple to use. Tips to effectively use the calculator: If one knows effect of various parameters on the premium for an individual of specific age, smoking status and gender, the customization can be easier. Here are some simple tips to make it easy: Higher the sum assured, higher the premium. Lower the duration/Policy Term, lower the premium Annual premium for Regular Premium policies (pay regularly for entire term) will be lower than Limited Pay policies (pay for few years and get cover for longer term) Base variant of the plan will cost lower than the variants with higher cover or more features Check for High Sum Assured Rebate – for example, if you choose sum assured of 1 Cr, the premium will be less than double of that charged for 50 Lakh. The slabs at which the rebate triggers can change from company to company, product to product. Please note. your personal habits, avocation, medical history and family history can also influence the amount of premium payable. Who should buy term life insurance? Let’s take an example. A family of four where head of family makes the majority of the family's income. The survival of this person is important to ensure the family meets all the financial needs. If this person has purchased a term life insurance policy, in the unfortunate circumstance that S/he passes away, the term life insurance policy held can help addressing one or more of the following needs for the surviving family members: Immediate liabilities and/ or loans Long-term objectives, such as child education and marriage. Instant needs, such as funeral costs, etc. Monthly costs such as electricity bills, groceries, utilities, etc. The extent of protection depends upon the amount of cover this person has. Hence, anyone with even one financial dependency on their income should consider purchasing term life insurance. However, here are some examples of why one should buy term life insurance plan basis life stage or other need: Parents - In most families, one of the parents is the sole breadwinners and provide financial assistance for their children. Hence, term life insurance is the best way to secure the financial future of the children. Upon the unfortunate demise of the life insured, the nominee receives a death benefit. Self-Employed People - A term life insurance policy is beneficial if you fall into this category. If you are a one man show or your involvement is critical for continuity of your income stream after you, Term life insurance is a must for you. The purpose of this is to make sure your dependents' financial goals are not compromised. Working Women - Women today work and share the financial burden equally. When she is not around, the burden falls on her partner. It is always advisable to make sure that your loved ones' financial future is protected by buying a term insurance plan. The financial support you provided can continue to be around even after you. Young Professionals - These days many young professionals have student loans. If god forbid, something unfortunate happens to them, the burden of loan will fall on their parents. Hence, having a term insurance plan will ensure the financial burden of such loan is not passed on to the loved ones. Further, in our society, the young professionals will have responsibility of entire family once their parents stop working. That is another strong reason for young professionals to buy a term plan. At young age, the premium payable for buying a term insurance will also be lower and will continue to be the same amount for entire duration of the term plan. 7 Disclaimer Married Individuals - Term insurance is like a financial safety net for your spouse, if you are not around. After marriage, the responsibility increases and the spouse is fully or partly dependent on the partner, emotionally as well as financially. While we cannot compensate an emotional loss in case of an eventuality, the financial losses can be compensated to a significant extent through a term plan. It is advised that you select income-replacement term plans instead of term plans with lump-sum payouts. This is why: After your demise, your partner and other family members will likely already be dealing with a lot of issues, making it difficult for them to make wise financial decisions. Additionally, people cannot suddenly learn how to manage such a huge amount of money. In such a case, they might improperly handle a lump sum payout of the term plan. Term plan payouts generally range from 10 to 15 times the life assured's yearly salary (regardless of the method of payouts), which is sufficient to guarantee that all debts (loans on homes, cars, and so forth) are paid off and that there is enough money left over to sustain the same lifestyle, for instance, sending kids to reputable schools, etc. But doing so demands considerable expertise and mental stability. However, an income-replacement plan is designed to replace full or part of your monthly salary. You can choose an appropriate sum such as to ensure that the financial situation of your family remains the same even in your absence.

3. There are term plans that offer some of the pay-out in the form of a lump amount and retain the remainder for monthly payouts to replace your income. If you anticipate that many debts and obligations will need to be settled quickly after your untimely death, you may want to choose these. Similar to this, there are term plans that offer increasing monthly income, with some annual increments. Beneficiaries can better manage the consequences of inflation thanks to this tool. Those who are nearing retirement - You may think twice about buying a term plan at this stage in your life since the premium will look too high. However, if you do not have an active term plan, a strong reason for you to look at a term plan could be to ensure your spouse has a financially independent life after you. Also, having a term plan can ensure the burden of any liability is not passed on to the family. Term insurance plan eligibility criteria Before buying a term life insurance plan of your preference, it is ideal to check if you meet the eligibility standards for the same. Eligibility criteria to buy term insurance plan The eligibility criteria for a typical term plan will be as follows: Features Eligibility Criteria Entry Age Minimum 18 years Entry Age maximum 65 years (This will vary from one plan to the other) Policy Term Minimum 5 years (This will vary from one plan to the other) Policy Term Maximum 40 years (This will vary from one plan to the other) You can find products that offer cover up to age 70 or up to age 85 or even till age 100. Who is eligible to purchase? Young individuals, Newly Married, Parents, Senior Citizen One should be earning to be eligible to buy a term plan. Can NRIs purchase? Yes (The allowability and rules may vary from one company to another) Payout Options Lump-sum Monthly Payout Annual Payout Lump-sum with monthly income Lump-sum with increasing monthly Note the availability of these payout options will differ from one plan to the other. Add-ons or Rider Waiver of Premium Accidental death Permanent or partial disability Family Income benefit And, critical illness Note the availability of rider options will differ from one plan to the other. Documents Required Photo Identity Address Proof Income Proof Others (if required by the insurance company) Medical Test Most term insurance policies require a medical examination. Any associated medical issues are disclosed to the company via a health risk assessment.It is advisable to disclose all material information including habits, medical history and family history at the time of buying a term plan for a seamless claim process. Key features of term insurance plan The following are some key features of term life insurance plans: Cost-effective Offers high coverage at low premium. Long-time Protection With a coverage that lasts up to age 70 or 85 or even 100 years depending upon the plan chosen, you can protect your loved ones. Low Entry Age 18 years Lower the age, lower the premium Mode to Buy Avail via both offline and online modes

4. y Premium Payment Frequency As per your comfort, you have the flexibility to choose to premium payment frequency such as: Yearly Half-yearly Quarterly Monthly One-time (single). Note: The availability of one-time payment option will vary from one plan to other. Customization Option Many term insurance policies provide you the choice to tailor the plan to meet your needs. Riders/Add-on Covers Optional additional coverage can be opted through a number of riders such as: Critical illness rider Waiver of premium Accidental death/disability rider, etc. Note the availability of option to choose riders varies from one plan to the other. Buying Process Online and/or Offline Claim Process Online and/or offline claim process Protection of Loans and/or liabilities Yes. You can assign your term plan against a loan or liability so that your loved ones are protected from liabilities of such a loan. Physical Paperwork Depends upon company to company and mode of purchase i.e. online or offline. Payout Options One time lump sum payout Fixed monthly payouts One time lump sum payout + Fixed Monthly Payouts One time lump sum payout + Increasing monthly payouts You can check the options available in the policy you have opted for at the time of purchase. Sum Assured (Min/Max) Note: Minimum and Maximum Sum Assured will vary from one policy to the other. Benefits of a term insurance plan Don’t underestimate the importance of a term plan Term insurance plan can make sure that a family's level of lifestyle can be maintained, expenses can be covered, and goals can be achieved in case of an untoward incidence with the person insured. Term insurance plans give the following benefits in addition to protecting against risk of death of the family's breadwinner: Simple to Understand Plans - Term insurance is well-liked since it is easy to understand. If one passes away unexpectedly, the dependents would get the amount promised under a term life insurance policy. The sole requirement is that the premium be paid on time. Safety for Loans and Liabilities - Additionally, term insurance provides protection for your dependents from your financial commitments, such as home loans, personal loans, etc. Higher Sum Assured at Affordable Premiums - Term life insurance offer significant life cover at a reasonable cost. This insurance plan can provide compensation in the event of an income loss for a number of years. Tax Benefits under Section 80C - As per the provisions under Section 80C of the Income Tax Act 1961, the premium you pay to buy a term insurance plan is exempt, up to a limit of Rs 1,50,000 in a year. Tax laws are subject to change. Tax Benefits under Section 10(10D)- As per the provisions under Section 10(10D) of Income Tax Act 1961, the death benefit of term insurance plans is completely tax-free. Tax laws are subject to changes. Additional Coverage via Riders - To receive extra benefits, you can add riders or add-ons to your term insurance policy. With different term plans, there are a variety of rider alternatives available. However, the availability of rider varies from one plan to the other. Multiple Premiums Payment options - Many term insurance policies come with an option to choose the premium payment period as per your wish. You have the choice of selecting single (one- time), recurring, or limited payments with a term life insurance coverage. However, this varies depending on the plan. Maturity Benefits - Since a term insurance policy is a “pure-risk” cover, it does not come with any survival or maturity benefits. However, if you want maturity benefits, then a Term with Return of Premium plan (TROP) is suggested. What are the different types of term insurance plan? In order to cater to the varying demands of consumers, insurance companies offer a variety of term insurance plans that customers can choose from. So before jumping into signing a proposal form for term insurance policy, it is important you understand the varying forms of term insurance plans you can choose from. Decreasing Term Insurance Plans - These plans provide a death benefit that decreases in amount with time. For example, a ten year decreasing term policy with Sum Assured of 1 Lakh may offer a benefit of Rs. 1,00,000 for death in the first year, 90,000 for death in the second year, 80,000 for death in the third year and so on to pay Rs. 10,000 for death in the last (tenth) policy year. The premium for such policies is payable for limited duration, which could typically be half or two third the policy term. Increasing Term Insurance Plans - As the name suggests, the plan provides a death benefit, which increases along with the term of the policy. The sum may increase by a specified amount or by a percentage at stated intervals over the policy term. Alternatively the face amount may increase according to a rise in the cost of living index. Premium generally increases as the amount of coverage increases.

5. TROP - Term with Return of Premiums Plans - Yet another type of policy (quite popular in India) has been that of term insurance with return of premiums. The plan leaves the policyholder with the satisfaction that he / she has not lost anything in case he/she survives the term. Obviously, the premium paid for such policies would be much higher than that applicable for an equivalent term assurance without return of premiums. Group Term Insurance Plan - It is specially designed for businesses, companies, societies, associations etc. and provides term life insurance cover for all the members of the group. These policies provide the same set of benefits that an individual term plan offers. Most of these plans are offline as each policy is generally customised to suit the needs of the group taking the policy. What are the types of riders for term insurance? In addition to the base term insurance policy, riders offer additional coverage to the life assured. Riders are optional. You can compare riders to different toppings on a pizza. Base policies are like pizza bases, and riders are like the different toppings available to customise the pizza according to an individual’s preferences. Using riders, you can combine different needs into a single plan. As an addition to a standard life insurance contract, riders can provide disability cover, accident cover, critical illness cover etc. The life assured can purchase these riders by opting for them as allowed under the desired plan and paying an additional premium. Here are the most common types of riders in insurance offered by several of life insurance companies: Typical Eligibility Conditions Types of Riders Description Typical Key Features Accidental Death Rider This rider covers death because of an accident. If the life assured dies as a result of an accident while the rider is in effect, additional rider benefit is paid. Premium rates are low. Age of Entry: 18 to 65 years If the family member dies within a defined period (usually 3 months) of the accident, additional sum assured (as per the rider) will be offered. Maturity Age (Max.): 70 years Minimum Sum Assured: Same as sum assured of a base policy or lower. Maximum Sum Assured: No limit The criteria varies from one policy to the other. Permanent and/or Partial Disability Rider This rider covers Partial or Permanent disability brought on by an accident that are equal to the amount assured under. Partial disability covers the loss of one arm, one leg, one eye whereas permanent disability will cover loss of two limbs, where limbs for the purpose could be an arm or a legs or an eye. Entry Age: 18 - 60 years Maturity age (Max): 65 years People who are partially disabled are eligible to a partial sum promised if covered under the rider. The criteria varies from one policy to the other. Accelerated Death Benefit Rider OR Terminal illness rider In case the life assured is detected with a terminal illness, s/he receives a partial advance amount of their sum assured. Low premium cost The entry and maturity age of this rider/benefit is usually similar to base plan. Supporting your loved ones financially during critical times The criteria varies from one policy to the other. Critical Illness rider Critical Illness rider benefit is paid when the life assured is diagnosed with any critical illnesses mentioned in the policy such as kidney failure, heart attack, cancer, stroke, etc. Compensation for lost earnings during the recovery stage Entry Age:18-65 years The rider's premiums do not increase at least for 3 to 5 years Maturity age (Max.): 65 years

6. It may end few years before the end of the base plan Minimum Sum Assured: Same as base sum assured Maximum Sum Assured: No limit The criteria varies from one policy to the other. Waiver of Premium Rider In the event of the life assured contracting any of the covered critical illnesses or permanent total disability (as mentioned in the rider document) the future premium payments waived off and the policy continues. Your premiums are waived off, but the plan remains in force Entry Age: 18 - 65 years Reduces the financial stress of paying future premiums Maturity age (Max.): same as per the premium payment term of the base plan The criteria varies from one policy to the other. How to choose the right term insurance plan? To select a suitable term insurance plan, one should look into the following factors: Assess Life Goals and Financial Dependencies - Choosing term life insurance involves assessing your life goals first. Age and financial situation are important factors to consider when choosing a life insurance plan. In turn, it influences the duration of the policy and, therefore, the amount of life cover that is appropriate. Evaluate Current Lifestyle - You should determine the type and the amount of coverage of term insurance you require based on your lifestyle. Your way of life involves a certain standard of living and financial practices. If you are aware of your lifestyle needs, protecting your family will be simpler. Check for current liabilities - While selecting a term life insurance plan, liabilities and loans are also significant aspects to take into account. Sometimes people owe significant loans. If the policy term is not long enough to cover the loan repayment time or if the loan amount is more than the coverage level, your dependents may face financial hardship in case of an eventuality before such loan is paid off. Option to add riders to the Base Plan - In addition to their standard term life insurance plan, many term insurance policies offer the ability to choose additional coverage that would help under specific or severe circumstances. A plan's scope of coverage can be enhanced by adding such optional riders. When you buy a rider, you can add it to your base insurance by paying an extra premium. However, the option to avail a rider varies from one policy to the other. Check Claim Settlement Ratio (CSR) of the insurer - One of the elements to be taken into account is the claim settlement ratio of the life insurance provider. But when purchasing a life insurance policy, people frequently solely consider the Claim Settlement Ratio, which may not be the best route to take. For example: Source Video - Understand Claim Settlement Ratio Insurance Regulatory and Development Authority of India (IRDAI) India releases the claim settlement ratio every year. It is a myth that if the claim settlement ratio is higher, then the claim settlement process will surely be faster and easier. The insurance regulator, Insurance Regulatory and Development Authority of India (IRDAI) does not allow any insurance company to reject a claim without any solid reason. Considering only the claim settlement ratio of the company does not help. Also, there are processes to appeal to the Claims Review Committee of the Company in case the claimant is not satisfied with the claims decision made by the Company and further to the Insurance Ombudsman if the decision of Claims Review Committee is also not satisfactory. Company Reliability - The Company’s reputation and financial stability are crucial for gaining the trust of customers. This is particularly accurate for the life insurance industry. Before making a choice, it is essential to research a company's reputation. Solvency Ratio - In the event of a claim, an insurance firm with a high solvency ratio will be able to pay out. Every life insurer is required by the IRDAI to maintain a solvency ratio of 150% or above. Ease of buying - Each and every one of us desires convenience. Customers now search for insurance plans that can be viewed as well as purchased online when buying insurance. The day when one policy document was created on paper is long gone. These days, policies are provided electronically and delivered to your email address, where they may be accessed from any location at any time. Customer Service - When buying life insurance, be sure to study the insurance company's customer service division as well. After all, the effectiveness of the customer service will determine how quickly or slowly your issue is treated once you have purchased the policy and may have a problem. How much term insurance cover do you need? Here are some crucial factors to take into account while determining the term insurance coverage: Current Income and Expenses - Finding the current yearly income and total expenses is the first step in figuring out how much term insurance is needed. Experts in the field recommend that a term cover be 10 to 15 times your annual income. For instance, it would be wise to choose a Rs. 1 crore cover if your yearly income is 10 lakhs. Current and Future Liabilities and Assets - It is crucial to take the loans and liabilities by the insurance buyers into account when calculating the term life insurance plan's sum assured value. Examples of these loans are home loans, personal loans, auto loans, etc. Additionally, /monthly commitments towards assets including savings such as fixed deposits, ULIPs, gold, and capital markets, among other things should also be considered. It is always important to include recurring and planned savings while defining the coverage amount of the term life plan. d S lf Th i b h ld id “h h h i ” “h h f h i h ff d ” f h li F Fi i l G l f F il

7. Future Financial Goal for Family and Self - The term insurance buyers should consider “how much coverage they require” over “how much of the premium they can afford to pay” for the policy to guarantee the financial future of their loved ones and family while keeping the long- and short-term financial goals of life in mind. Make Use of Human Life Value Calculator - Human life value calculators are provided by a number of insurance companies. It aids policy buyers in developing an understanding of the amount of sum assured they need for a term policy. Based on the straightforward time value of money formula, the human life value calculator determines the sum assured amount. To determine the sum insured amount that one needs to opt for, a person only has to provide a few details, such as his/her current age, expenses, income, and expected inflation rate. Hence, it is highly recommended to use the human life value calculator to determine the appropriate coverage amount for you. How does a term life insurance plan work? Here’s how term insurance policies work: Step 1: You decide to buy a term plan from a life insurance company. Step 2: You decide the coverage amount or sum assured that your nominee will receive in an untoward incident covered. Step 3: You decide the policy term (the duration of the policy) and the premium paying term (the duration of premiums to be paid) basis your earning years. Step 4: Based on various factors like your age, health condition, sum assured, policy term, and premium paying term selected, etc., the premium amount to be paid is decided by the life insurance company. Step 5: You buy the term plan from the insurance company and in return you pay premiums. Death Benefit/ Life Cover: In the case of the unfortunate event of the life assured's demise, the sum assured or the death benefit is paid to the nominee of the life assured and policy gets terminated. Maturity Benefit: Since a term insurance plan is a "pure-risk" cover it does not offer maturity benefit if the life assured survives till the end of the policy term. However, only in the case of "term insurance with return of premium plan" - at the end of the policy term, if the life insured survives s/he is paid the promised maturity benefit, which is the total premiums paid excluding taxes, extra premium, rider premium etc. What factors should be considered before buying the right term plan? The right term life insurance plan will depend on your needs. But before buying the right term insurance plan you should consider these factors: 1. Cost of Premiums - Term life policies are ideal for those individuals who want high coverage at low premium rates. Based on your lifestyle and age, you would require to pay a small number of premiums to opt for term plan cover. For example: if you are a 25 year old healthy non-smoking male would have to pay ₹ 630 per month for a death payout of ₹ 1 crore for a Policy Term and Premium Paying Term of 20 years. The premium amount for a term insurance plan differs from insurer to insurer. With time, the premium for the same sum assured also increases with your age. At the time of renewal, the premiums of term policy does not increase with age and therefore, you fix the premium (excluding taxes) when you buy the policy. It is also important to choose the premium payment mode wisely, be it monthly, yearly or other. 2. Eligibility Criteria As discussed, the eligibility for a term life insurance plan may vary from insurer to insurer. However, the standard minimum entry age is 18 years while the minimum age limit to opt for a term insurance plan is typically 65 years. 3. Availability of Cover Amount - To decide on the cover amount you require, you must assess and consider aspects like age, financial responsibilities, family’s future requirements, loan service, basic expenses based on your lifestyle habits, and accounting for rising costs and inflation. The younger you are, the higher should be your amount of coverage Age Cover Amount If you are between 25 to 35 years It should be approximately 20X of your annual income If you are between 36-45 years It should be approximately 15X of your annual income If you are between 46-55 years It should be approximately 10X of your annual income 4. Types of Term Insurance Payouts As the policyholder, you can decide on the payout option of the death payout to your nominee depending on the type of option chosen by you at the time of purchase. You can opt for a lump sum, lump sum monthly income, or income replacement or monthly income, as allowed in the policy you choose based on your requirements. Lump-sum - The entire sum assured amount is paid at one go to the beneficiary of the term policy. For example- Sum assured= 1 crore Payout= Rs.1 crore as a lump-sum payment to the beneficiary of the policy. Lump-sum + Monthly Income - a defined proportion of the sum assured amount is paid as a lump-sum payment to the beneficiary of the term life insurance policy, whereas, the balance of the sum assured amount is paid as income to the beneficiary of the policy. For example- Sum assured= Rs.1crore, Lump Sum Payout= Rs.50 lakhs at the time the claim is made to the nominee and Rs. 53,690 every month to the Nominee for next 120 months as a death benefit. The total amount payable can increase since the payouts are made in instalments instead of a lump sum. Income Replacement or Monthly Income - A fixed percentage of the sum assured amount is paid as monthly income from the first month of the life insured’s death. For example- Sum assured= Rs.1 Crore Payout= Rs. 1,07,380 per month (about Rs. 12.88 lakhs yearly) for 120 months. The amount shown above can change from policy to policy.

8. Factors affecting term insurance premium Life insurance premium rates are computed through an underwriting process that employs the use of various statistical and mathematical calculations around the insured person. Some of the major parameters while calculating premium rates are: Age - Younger individuals are at lower risk of death or getting life-threatening diseases. Therefore, younger people are offered lower premium charges than an older person. Gender - As per various studies, women tend to live few years longer than men. So, many insurers charge a lower premium to women because they have a higher probability of surviving few more years compared to men. Family’s Medical History - An Individual whose family has a history of ailments such as diabetes or heart attack etc. has a higher probability of contacting or diagnosing diseases which can have a hereditary effect. Thus, if there is a family history, it can increase premium amounts. Smoking and Drinking Habits - The premium rates for smokers and alcohol users may be more in comparison to non-smokers. Policy Duration - If the policy term is longer, then you will end up paying a high amount of premiums as the insurer will have to cover your life for higher risk. And, a small policy tenure will have a low rate of premium as compared to a longer one. Occupation - Individuals working in a high risk industries such as shipping, transport, gas, mining, oil, etc. are at higher risk of accidents or other occupational hazards. Thus, in such cases, the premium rates may be higher basis the exact nature of duties, for example working in a mine vs handling a desk job in a mining company. Term insurance premium payment options The amount of premium payable for term insurance and the duration for which it is payable are important parameters that govern the purchase decision. The policyholder should always make the selection as per their preference, requirements and future goals. Many term plans offer different premium payment options such as regular pay, limited pay, and single pay. Regular Pay - In this, assured is required to pay premiums regularly for the complete policy period. You can select yearly/ half-yearly / quarterly or monthly options to pay premiums. Limited Pay - Assured can make recurring payments for a pre-decided limited time. In this, the premium payment term is less than the policy term. One can select yearly/ half-yearly / quarterly or monthly options to pay premiums. Single Pay - This option allows assured to pay the complete premium amount at one time when you purchase the plan, thus not leaving any future liability of premium payment. Individuals opting form Regular or Limited Pay option are recommended to setup auto payment methods such as NACH or standing instructions to ensure that a premium is not inadvertently missed. FAQs about term insurance plans 1. What is a Term Insurance Plan? Term insurance plans also referred to as protection plans. Such policies usually have a time period assigned to them, also known as the “policy term” of the plan. In case the life assured dies during this policy term, the nominees listed under the insurance policy receives the sum assured of the policy. In exchange for this guarantee, a specific sum of money called “premiums” is payable at defined dates. The sum assured of the policy is the coverage the policyholder agrees to at the time of purchasing the policy. It should be noted that pure term policies do not have a maturity value. This means that in case the plan completes its term and the life assured is still alive, no benefit will be paid to the nominee Due to the same, term plans are usually the cheapest form of life insurance policies available to customers. 2. Why is Term Insurance important? 3. What are the key features of the term policy? 4. What is death benefit under term insurance plan? 5. What is Term Insurance Premium? 6. Is it recommended to have add-ons in my Term plan? 7. What are riders in term insurance? 8. What is the cost of riders? 9. What are the benefits of purchasing a rider? 10. Is it possible to buy 2 term insurance policies?

9. 11. What documents are required to buy a term insurance online? 12. How do I know which term insurance policy to select? 13. How much term insurance should I take? 14. What if the life assured survives the term period? 15. Does Term Insurance Cover COVID-19? 16. Why is the term insurance premium amount for smokers higher than that of a non-smoker? 17. If I only smoke once in a while, should I call myself a tobacco user? 18. When should I buy term insurance? 19. Are all types of deaths covered under term insurance? 20. Do a policy's terms and conditions change from time to time or with age? 21. Is term insurance covered under 80C or 80D? 22. Is term insurance claim tax-free? 23. What are the economic benefits of purchasing a term policy? 24. Is wealth creation possible with term insurance? 25. Is it possible to change the frequency of payment for the term insurance plan? 26. What is the policy term that I should select? 27. Let’s look at an example of a 35 years old non-smoker male buying a term plan for 1 Cr. cover 28. What happens if I buy a term plan and then I become an NRI? 29. Is it possible to change the nominee after buying the term insurance plan? 30. Is it a good idea to purchase a term plan if I am covered under my company's group policy? 31. What if I do not pay the term insurance policy premium on or before the due date? 32. What guarantee does a policyholder have that their nominee won't run into problems when filing a claim? 33. Is there a free-look period for term insurance? 34. If my payment is overdue but still inside the grace period, do I still have to pay penalties? 35. Is it possible to switch the term insurance plan to a different insurance company while the policy is active? 36. What factors determine the term insurance premiums? 37. Do term insurance plans include surrender value? 38. If a life assured dies within a year of the term plan's start date, will the death benefit be paid? ARN No.: Comp-September-2022_880.      Follow us on our Social Networks

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