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term insurance


A Term Insurance Plan is the most comprehensive form of financial protection. It will help your family meet their financial needs from household expenses to rentals in your absence. When you consider buying a term plan, you have to make an educated choice about the life cover you select. There are some important things you need to keep in mind when deciding the term plan and life cover you opt for. The cover should help your family maintain their lifestyle, inflation should be kept in account and lastly, it should take care of your existing liabilities preventing the worries of EMI repayments.
A term insurance plan is the simplest forms of financial protection that can help your family meet its financial needs in your absence due to death. Term plan offers peace of mind with affordable premiums and a life cover that you can choose depending on your family’s lifestyle and financial needs. Some of these term plans can also be bought online within a few clicks & without any lengthy paperwork.
a. Term Insurance provides a life insurance facility that is provided by most of the insurance company as a financial cover but for the specific time period only. The policyholder is covered from mishaps like death during the policy term.

b. Term insurance covers the policyholder for a fixed period of time. For the term insurance there is no cash value and as a result, the plan is less expensive than the other regular life insurance policies. The term insurance is claim is payable only when the policyholder is dead within the time span during which the Term Insurance policy is valid.

c. The Term Insurance plan also offers a very high cover to the policyholder at a very minimal cost. Death is an uncertain event of life and all we can do is to be prepared for the same that is why one buys an insurance policy. But in case of the uncertain and untimely death of the policyholder, a term insurance plan is a savage and offers a financial protection to the family of the policyholder.

d. Term Insurance plans are available for the policyholder with a range of tenure from 5 years to 40 years. The best thing is that the premium amount does not change for the policyholder during the complete policy term. The policyholder can pay the premium amount as a single premium or as monthly, quarterly, semi-annual, annual as per the convenience.

e. For the policy cover, one can understand the basic rule for the coverage amount and that is at least 15 - 20 times of the annual income of the policyholder. For the financial protection of the family, term insurance is a backup.

f. A term policy is a very cost-effective measure to save your family, even if the term insurance does not promise any significant returns and there is no other add-on and additional benefits for the policyholder as they get in the normal and regular life insurance covers. But, as term Insurance is a part of the various insurance products, all of the products have their different benefits and that can result in a higher premium value amount.

g. Any policyholder should choose the plan wisely and they should check properly whether they need a plan that hosts on various plans or if they want a term insurance plan that offers affordable premium amounts and fixed premium for the policy. So, in term insurance the policyholder enjoy the benefit much more than the sum invested in the same in an easy and hustle-free manner.
• Term Life Insurance is the most Cost-Effective plan.
• Pay the Policy Premium Only Till Death or in some plans upto a predetermined years of age
• Flexibility to Receive Claims in lump sum or as Monthly Income
• Choose Riders to Make Your Term Plan more Comprehensive
• In some of the Term Policy; you can Enhance/Increase the Insurance Cover at Major Life-Stages
Note: If the Policy holder survives after the Term granted then there will be no claim payable from the Insurance Company
1. Get Lump Sum amount in case of sudden death within the term period.
2. After your death your family is free from all loans and liabilities as it could be paid off from the claim amount received by beneficiary on death of the Insured.
3. The family continues to live the normal life with pride and dignity even after the death of the Insured who might be the key person or earning member of the family.
4. Some of the term Plans with add on covers takes care of disability of the Insured or critical illness contracted by the Insured.
5. Additional benefit if the death if Insured is caused by the accident if the Term Plan Policy has an add on cover covering the accidental death.
a. Family/dependents of the Life Insured are eligible for a lump sum amount in case of Death of the Insured within the Term of the Policy or Critical illness (If opted as add on) to help your family to have sound financial independence even if you are not around.
b. Tax benefit under section 80-C of the Income Tax Act and if critical illness cover is taken then under section 80-D of the Income Tax Act.
c. Policy term is minimum 5 years and generally for 15 to 20 years. Insured has an option to opt for a longer term as well.
d. Plan Choice: Normally the Term Policy is taken for the breadwinner of the family but in some cases even the spouce can be covered and the claim is payable on death of either of the two. It depends on selection of the Plan.
e. Entry Age; Normally the entry age is 18 years with maximum age limit at 65 years. The Term premium increases as the person gets older so best planning be done when the Insured is young.
f. Maturity Age: Majority of the Insurance provider grant insurance for 65 to 70 years but the Insured may opt for higher age and in turn have to pay the higher premium.
g. Survival benefit: In term Insurance there is normally no survival benefit but now a day some insurance companies have started the plan where on the completion of the term the premium paid by the Insured is returned back to the Insured. In this type of option the Insured need to pay little higher premium.
h. Death Benefits: On death of the Insured within the term of the Policy the assignee or the beneficiary of the policy either gets the sum Insured at one go or in some cases some fix amount and some as monthly payment depending upon the option selected by the Insured.
i. Additional Rider facility: Some of the Term plan comes with Critical Illness rider or Accidental benefit rider in which case the Insured gets the claim even if he contracts the critical illness or get additional amount if the accident occur due to accident during the term period.
a. Insurance Company reliability
b. Expenses of the Company. Try to find an insurance company with least expenses so that the premium of the Insured is lowest.
c. Check the solvency ratio of the Insurance company
d. Whether there is scope of enhancement of the cover.
e. Check the rider (like critical illness, accidental death etc)offered and its corresponding premium.
A term insurance plan is the simplest forms of financial protection that can help your family meet its financial needs in your absence due to death.. However, still under the TERM PLAN there are many options available that you can explore as per your needs.

I. Pure term plan: It is the simplest and the cheapest form of term insurance plan. Under the same, the insurance company will pay a fixed sum assured amount to the beneficiary or nominee in case if demise of policyholder. However, in such cases where the insured survives, he/she would not get anything in return. Usually, the premium for term plans depends upon three factors that include age; term of the policy and the sum assured you choose. There is no doubt in saying that the term plans are cheapest insurance product, still you can get a discount by buying them online.
II. Return of premium plan: It is true that not everyone would be fine with concept of paying for years and getting nothing at the end. Return of premium plan is especially designed for such people. Investing in this plan would be slightly expensive as compared to PURE TERM PLAN but in this plan you will surely get a return of premium paid. Under this plan, the insured will surely receive a return at the end of the policy, but if he dies during the policy term then the nominee would be liable to receive the sum assured amount.
III. Decreasing plan: Under the decreasing form of term insurance plan, the sum assured decreases every years just like the outstanding loan amount. You can buy this plan at very nominal charges as the sum assured decreases every year. Banks usually bundle the single premium type of this plan and pay the premium on your behalf. Under the same, the amount of premium gets added to your total debt liability, which you pay with the help of an increased EMI.
IV. Increasing plan: Just opposite of a decreasing plan. Under the same, the amount of cover increases by about 5% every year until your sum assured increase by 50% or doubles up in value. The premiums of such plans are on the higher side as the insurance companies puts more money at risk every year.
V. Convertible plans: It is a combination of term plan and a saving plan. It is a plan, where you buy a term plan, which you can convert into an investment-cum-insurance plan later. However, your premium may change at the time of conversion.
(i) Critical Illness rider
(ii) Total and permanent benefit disablement rider
(iii) Accidental Death benefit rider
(iv) Waiver of premium rider
Term insurance policies cover death within the term of the Policy period. The specific exclusions depend upon the type of plan and term that you choose. However, there is exclusion of Death due to suicide which is there in all types of term Insurance Suicide is an exclusion that you will find in almost all term insurance policies. Suicide will not be liable for any compensation even when it comes to group insurance.
You can avail lucrative Tax Benefits Under section 80-C and section 10(10D) of Income Tax Act 1961. Additionally if add on cover of critical illness is taken in Term Plan then premium paid towards critical illness qualifies for deduction under section 80-D.

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Principal Officer : Mr. Ramesh K. Patel ; E mail : rameshpatel@arron.in

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