Often people wonder why is it that we need to invest in life insurance policies which requires an annual premium when we can save the same money in bank accounts for the future. The answer is simple, a bank account saving won’t necessarily get you the right help at the right time as a life insurance policy would do. Now, the most common form of life insurance policy is term life insurance.
What is Term life insurance?
Term life insurance policy is the simplest form of the life insurance policy. It offers a death benefit amount upon the demise of the insured person. The beneficiary specified by the policyholder while purchasing the policy is the one who gets the death benefit amount upon maturity.
As the name suggests, term life insurance plans are valid for a particular term and not more than that unless renewed. So if only the insured person dies within the term of the valid insurance policy, the beneficiary is eligible to claim the death benefit.
Although the term is usually set according to the age and health conditions of the insured person but suppose the insured person outlives the term of the policy then, in that case, the policyholder has the option to renew the policy to extend the term plan. He/she can also modify the policy to a permanent cover policy else the policy will be eliminated.
- Increased Sum Assured
The most widespread benefit of term insurance plan is the outstanding sum assured, that too at a very minimum price range. The first rule of the policy is that the early you buy the lower is the premium amount. Also, online purchasing of the policy gains you a lower premium range than what you get while buying from the branch office.
- Death Benefit
The death benefit is the whole purpose of buying a term life insurance plan. It provides financial support to your loved ones after you’re gone and, therefore, enables them to be independent and free of debts/obligations. There’s also an option for payments to be on a monthly basis like an income to supervise expenditures.
Along with the regular benefits attached to the term insurance plan, you can also remodel your insurance plan by further adding a few Add-On covers also called riders to your basic term plan. These Add-On covers are attached to the plan with an extra cost of the premium.
- Tax Benefits
By the Income Tax Act, 1961, there are several benefits which one can avail after purchasing a term life insurance plan. One such benefit is the exclusion of the premium amount of the policy from the Income Tax. The maximum range of the amount can be Rs. 1.5 lakh per year.
- Terminal Sickness Cover
Although the primary focus of any term insurance plan is life cover which comes in the form of death benefit but using the Add-On feature one can also get financial support in the treatment and medication process for the insured person.
- Retrieval of Premium
A basic term life insurance plan is based on the death benefit feature which clearly states that the demise of the insured person triggers the death claim while the policy is valid and within the term plan. But this retrieval of premium makes sure that if the insured person outlives the term plan, the premiums are returned to the policyholder excluding taxes.
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Comparison of Best Term Insurance plans in India 2020
Aditya Birla Sun Term Insurance
Aditya Birla offers a varied range of term life insurance plans. It aims at serving the purpose of both saving and protection. Three of the most popular term plans by Aditya Birla are :
i. Protector Plus Plan
This plan requires a payment of the premium for the whole term and the beneficiary can opt for the death claim benefit either in whole or in instalments. The cover options are Level Sum Assured and Increasing Sum Assured which the buyer can choose accordingly.
ii. Future Guard Plan
This plan offers a return of premiums over the maturity of the term plan.
iii. Easy protect Plan
This plan is the same as Protect plus plan but the only difference is that the maximum age for this one is only 55 while that for Protect plus is 65.
Max Life Term Insurance
The most famous Max Life Insurance term plans are :
i. Smart Term Plan
With a claim settlement ratio of 99.22%. The life cover is Rs. 1 crore with a maximum age limit of 75 years. The plan is available at a 3.2% discount on online purchasing and the price of the term plan is Rs. 623 / month
ii. Returns of Premium
It offers a survival benefit of 3.12 lakhs at a life cover of Rs. 1 crore. The maximum age limit for the plan is 75 years and the cost per month is Rs. 1,435.
iii. Smart Term Plan
It is a monthly term insurance plan with a one-time payout of Rs. 1 crore. The monthly payout is of 40,000 for up to 10 years. The monthly rate of the plan is Rs. 865/-
SBI Life Term Insurance
The best of SBI Life Term Insurance plans are :
A term plan which offers a claim settlement ratio of 94.52% and a life cover of Rs. 1 crore. The maximum age limit for the plan is 80 years and the price is Rs. 589 per month.
ii. e- Shield Increasing Plan
This term life insurance plan by SBI gives a total payout of Rs. 1.3 Crore for 45 years with the current layout of Rs. 1 crore. The price of the plan is Rs. 637 per month.
Along with this, SBI Life also offers a variety of customized term insurance plans to meet the specific needs of all customers and fit in the budget as well.
LIC Term Insurance Plans
LIC offers some of the most affordable and customisable term insurance plans in the country. These plans by LIC are also available at the online platform of the insurance company which are most desirable because of the discount features which isn’t present for the offline purchase.
i. LIC Tech- Term
It is the simplest term insurance plan with an option to choose the premium payment mode. One can pay a single, limited or regular premium.
ii.LIC Jeevan Amar
It has a feature which allows you to attach an accident benefit Add-On to your basic term plan. Also, a feature of high sum assured.
Thus, Term Life Insurance is the best insurance at a minimal cost but it has high returns.