What is a Term Insurance?

Term life insurance is a type of life insurance that provides financial protection in the case of the life assured's demise. It is a life insurance policy that offers financial protection and coverage to the policy beneficiary if the insured dies during the active period of the term insurance plan. Basically, term plans give complete financial stability and protection to the insured's loved ones in the event of unforeseen circumstances. In the case that the insured passes away during the period of the insurance plan, the sum assured is paid to the insured's policy nominee as a death benefit as per the terms and conditions of the policy.

 

Term insurance plans not only provide financial security and protection to the insured individual's family but also assist them in meeting their future needs, such as their children's education and marriage and other things. Some insurance companies also provide permanent or partial disability coverage, which prevents the policyholder's permanent income from being disrupted.

 

Term life insurance plan offers the highest life coverage and term insurance benefits at the lowest premium rates for the duration of the policy.

 

Before purchasing a term plan, it is critical to understand the term insurance benefits and major aspects of term insurance. A term life insurance plan provides life insurance coverage against the fixed sum of premium paid over a specified policy period.

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Why You Should Buy Term Plan?

People of all ages understand the necessity of purchasing the ideal term life insurance coverage for their needs. In today's fast-paced world, every family needs financial security under a term plan to deal with the financial burden of losing a loved one, especially the breadwinner.

 

It also aids the family in repaying debts such as vehicle and home loans, if any exist.

 

Here are a few reasons why term life insurance is a good investment:

 

  • To Secure your Family's Future

    An unfortunate incident such as the untimely death of a family member can be extremely upsetting, especially if the family is financially dependent on the individual. Investing in a term plan relieves financial stress and uncertainty while also meeting the family's financial needs.

  • To Insure your Assets

    Financial dependents may be required to sell assets in order to cover daily expenses if the principal income earner is absent. Financial dependents, for example, may be forced to sell their home or investment holdings to raise finances. This could have a long-term harmful influence on their well-being. Instead, a term insurance plan's death benefit can provide significant sums to cover everyday expenses or for any other reason. As a result, assets with significant long-term worth do not need to be liquidated.

  • To Be Ready for the Unexpected

    Life's uncertainties have the power to make or break us in unimaginable ways. When watching the present global coronavirus pandemic, this is easy to understand. A term plan's main benefit is that it keeps us prepared for such circumstances. By choosing the  term insurance plan, you can get a substantial life insurance policy for a reasonable price.

  • To Avail Extensive Coverage at Low Premium

    All term insurance plans have lower premium rates than other insurance plans, making them affordable to everybody. A term insurance policy's coverage is extensive with a reasonably priced premium. As a result, such a policy forms the basis of one's financial portfolio because it provides exceptional protection.

  • Assists in Maintaining the Current Living Standard

    A person can ensure that their family members enjoy a well-maintained life with a high standard of living even if they are not present by using the term plan. Term plans are designed to aid in long-term financial planning.

  • Rider

    A term insurance policy can be armed with multiple riders. These riders are quite valuable and can supplement a term insurance plan by providing additional protection. Some riders include expedited death benefit rider, accidental death benefit rider, critical illness rider, waiver of premium rider, etc.

Who Should Buy Term Insurance Plan?

A term insurance policy is beneficial to everyone having a family. It is more of a requirement for some than for others. Term insurance has some of the lowest premiums compared to other types of insurance coverage. It can be used as a financial support system for people who have a limited budget and income. People with modest incomes will be unable to save the necessary funds in the case of unforeseen circumstances.

 

Purchasing a term insurance policy could be quite beneficial to these individuals and their families.

 

Premiums paid for life insurance are deducted from taxable income under Section 80C, providing a two-fold advantage to taxpayers: protection and tax savings. In addition, section 10 (10D) of the Income Tax Act of 1961 exempts the sum assured as per the terms and conditions of the policy (death benefit) received under a term insurance policy from taxation. 

 

As a result, everyone who benefits from any of the three major advantages of term insurance should consider purchasing one. These three major advantages are life insurance, tax savings, and low premiums.

 

  • Parents

    In most cases, parents are their children's only source of financial support. Children's requirements range from school fees and living expenses to large university tuition bills later in life. An adverse situation involving a parent might put their future in jeopardy and compromise the life prospects of their children. By acquiring a term insurance policy, parents can ensure that this scenario does not occur.

  • Young Professionals

    The majority of people opt to buy term insurance after they get married or later in their careers. Those who have recently begun working, on the other hand, will greatly benefit from getting term insurance. Parents or siblings are likely to be financial dependents on such people. Purchasing term insurance at such an early stage in one's career has several advantages.

     

    Let's have a look at some of these advantages:

    1. Taxable premium
    2. You can purchase offline or online term plan.
    3. One can avail significant level of coverage amount as the premiums are low.
    4. Individuals can add or remove nominations at any moment. As a result, if the policyholder later marries, the spouse and children can be added as a beneficiary.
  • Working Women

    Today's women are equally responsible to manage their household finances and provide for their families. A family's income is now as reliant on the woman's as it is on the man's. This dependence necessitates providing financial security to your loved ones in the event of your death. Even if you are not present, a Term Insurance policy ensures that your parents, spouse, and children are financially secure. It ensures that your family's lifestyle is not jeopardised and that they may achieve the objectives you set for them. The term insurance cover amount also aids in the repayment of any outstanding liabilities such as home loans, auto loans, education loans, and other similar debts.

  • Taxpayer

    There are over 1.5 crore regular income taxpayers, in the country. Taxpayers are constantly on the hunt for tools that can provide them with favourable tax benefits. A term insurance plan can provide tax benefits to policyholders in addition to protecting one's financial dependents from financial difficulties. Policyholders can claim a tax deduction on their term insurance premiums paid under Section 80C.

  • Entrepreneurs or Self-Employed Individuals

    Self-employed people make up a large portion of India's workforce. And there can be numerous ups and downs of self-employment as it takes a long time to build a successful business or independent practice. As a result, a self-employed person's income is likely to be inconsistent. Hence, one of the primary concerns of a self-employed person is the well-being of financial dependents. A self-employed professional can ensure that the objectives of financial dependents are never jeopardised by buying a term insurance policy.

  • Newly Married Couple

    Term insurance policies are a good place to start when it comes to building a strong financial portfolio for newlywed couples. Both spouses may have financial responsibilities and may want to leverage the benefits of buying term insurance as soon as possible. In addition, when a child is born later, the term insurance policy might make the child the only joint beneficiary.

  • Individuals Who Are About to Retire or Have Already Retired

    It may not seem sensible to buy a term insurance policy during one's retirement years because one's responsibilities are likely to be completed. However, financial dependents, such as a non-working spouse or child, may still exist. You could also want to leave a sizable fortune to your children or grandkids. Term insurance premiums are also tax-free, subject to the conditions outlined in section 10 (10D) of the Income Tax Act of 1961.

Benefits of Term Life Insurance Policy

  • Maximum Coverage at Affordable Premiums
    Since term insurance is the most basic type of life insurance and may be obtained for a low cost, it is easy to maintain and delivers more benefits for a lower payment than other insurance policies. Premiums can be paid monthly, half-annual, or yearly, depending on the chosen frequency.
  • Premium Payment Flexibility
    You can choose to pay your premiums monthly, semi-annually, or annually. There are also term insurance policies with a single premium payment option.
  • Death Benefit
    It is the entire sum assured amount provided by the insurance provider to the policy's beneficiary in the event of the insured policyholder's death.
  • Life Coverage
    Whole life insurance, which covers the insured for a significantly longer period, can provide adequate coverage and protection. Therefore, you can get more benefits for a longer period with this plan.
  • Coverage against Illnesses
    Many term insurance policies also include critical sickness benefits, which allow you to receive quality care for life-threatening disorders without having to worry about the expense. For example, by adding a Critical Illness Rider to your Bharti AXA Life Term insurance plan.
  • Benefits to Nuclear Family
    There is a higher chance of only one breadwinner in nuclear families, on whom the family is financially reliant. In such a circumstance, term insurance plans would be quite beneficial, as they would alleviate the financial strain that the family would suffer in their absence.
  • Tax Benefit
    Under two provisions of the Income Tax Act, a term insurance policy gives tax benefits. You can claim a tax deduction for the premium you paid under the Income Tax Act. Premium paid up to the limit of Rs. 1.5 lakhs are considered eligible for tax deduction under this act. Furthermore, under this act, the maturity benefit granted by some term insurance policies is tax exempted.
  • Rider Benefit
    Rider benefit can be added to term insurance plans as an add-on cover. By paying an additional payment, you can get this along with the benefits of term insurance.
  • Maturity Benefits
    A pure term insurance plan only provides coverage in the form of a death benefit to the insured's beneficiary. It does not offer any maturity benefit on usual terms. However, some plans provide a maturity benefit in the form of a premium refund if the insured lives to the end of the term plan period. One such plan is the Term Return of Premium Plan (TROP).
  • Protection against Liabilities
    A term plan's sum assured will protect your dependents from your financial obligations, such as a loan or any other debt. They will be able to pay off the loan with the insurance payouts they have received.

Term Life Insurance Key Features

Term plans are the purest form of life insurance that secures the deceased's family financially and provides stability. Here are some of the important features of term life insurance:

 

  • Low Entry Age
    The majority of term insurance plans have an entrance age of 18 years; that is, you can purchase term insurance as soon as you turn 18.
  • Long-Term Policy
    To keep insured, you can choose a longer-term for your term plan. With Bharti AXA life term life insurance, you can be insured for up to 50 years.
  • Save Tax Under Sections 80C and 80D Of The Income Tax Act Of 1961.
    The premium you pay for term insurance can help you save money on taxes. Critical sickness premiums paid under a term insurance policy save you tax under section 80D, whereas term insurance premiums are counted under section 80C of the Income Tax Act, subject to certain restrictions. Tax advantages are based on current tax regulations, which are subject to change.
  • Death Benefits as a Source of Income
    Modern term insurance plans allow you to provide a regular income as well as a lump-sum payment to your dependents in the case of your untimely death.
  • Premiums Survival Return
    If you survive the term insurance period, you can now get your full money back. Term insurance policies with a return of premium benefit offer a survival reward of all paid premiums on the policy.
  • Disability Benefit with Term Insurance Plan
    With a Term Insurance Plan, you can get a Disability Benefit. Any impairment, whether caused by an accident or sickness, can have an impact on your ability to make money. However, you can add a disability benefit rider to your term insurance policy at a low cost to remain secure in such a situation. Disability insurance is available for a fee in addition to the regular term insurance cost.
  • Protection against Life-Threatening Diseases
    Some curable conditions that can be life-threatening include cancer, heart attack, and renal failure. Don't allow money to get in the way of your recovery from these disorders. On payment of an additional premium, critical illness coverage is offered with term insurance plans.
  • Age of Maturity
    Term life insurance provides the most coverage for the largest age group of all life insurance plans. With Bharti AXA Life Insurance's term insurance plans, you can keep your coverage until you're 85 years old.

Why Buy Online Term Plan?

Rather than purchasing term insurance from a local agent, you can do so online. There are many reasons why purchasing an online term plan sounds plausible.

 

  • Term insurance comparison is simple
  • You can easily purchase term insurance plan online from the comfort of your home.
  • Term plan premiums are comparatively lower than those paid when purchasing offline.
  • Multiple secure payment alternatives are available for paying the premium.

4 Simple Steps to Buy the Term Insurance Plan Online

Here is a quick and Easy way to buy term life insurance plan:

  • Calculate Your Sum Assured
    Estimate Your Sum Assured based on your financial needs, then go to the website and click on Calculate Premium to begin the term insurance purchasing process. Our term insurance calculator's form asks a few basic questions about your age, contact information, smoking habits, and annual income.
  • Select Your Payment Tenure
    You can choose from various term insurance advantages, including a regular monthly income payment, a return of premium choice, and a critical illness benefit.
  • Request a Quote
    You can request a quote after choosing the payment tenure.
  • Complete the Form and Pay the Premium
    Once you've decided on your benefits under our term insurance plan, you may pay the payment and fill out the remaining information. After filling out all of the information, you'll need to submit the documents to finish your application for a term life insurance policy.

How Much Term Insurance Coverage Do You Need?

According to traditional thumb rule, a term insurance policy should be ten to twenty times your annual income. However, every individual’s needs differ; it's critical to evaluate various aspects before settling on a figure.

 

Here are some things to think about when determining the quantity of insurance coverage you'll need.

 

  • Income Substitution
    This strategy is based on the idea that the insurance amount should replace the breadwinner's earnings if the worst happens. For a set number of years, the insurance company pays the nominee a certain amount.
  • Expense substitution
    An expense replacement allows for the policyholder's family's daily spending & goals. As per financial experts, the insured must evaluate daily expenses, debts, and future aspirations, among other things, to determine the approximate amount of money a family requires. Deducting the present value of your investments and insurance is the next step.

    Subtract your home's value and any investments that your family will need in your absence. The amount left over after subtracting your assets and insurance from your expenditure is the optimal term insurance amount.
  • Human Life Value Method
    The Human Life Value method calculates the worth of human life based on the present value of future expenditure such as future income, spending, investments, etc. In addition, the HLV technique considers various characteristics such as your age, gender, occupation, goal retirement age, annual income, number of dependents, etc., to assess your insurance needs.

How to Choose Right Insurance Plan Online?

Term insurance is a low-cost, high-benefit financial instrument that assists in achieving this goal while also providing financial security and a death benefit. Before deciding on the option, it's critical to think about and carefully evaluate all of the necessary aspects. Age, income, health history, liabilities, and other factors must all be considered. Other factors that must be carefully and thoroughly evaluated are listed below.

 

  • Examine the Necessities for you and your family Make your term policy purchase based on your needs, not on the opinions of others. Everyone's financial and health situations are unique. When making decisions concerning your own family, it is not a good idea to follow in the footsteps of others. Instead, analyze your own and your family's needs before deciding on the type of term insurance policy to buy. Before deciding on a term insurance policy, you must evaluate the age of family members, their health conditions, the family's liabilities, and future ambitions. Based on these considerations, you must also choose the policy's term.
  • Prefer to Purchase Online Term Plan Rather Than Offline Choosing to acquire your offline or online term plan is also a critical step that impacts the other vital features of the policy. However, purchasing an online term plan is more convenient and advantageous than purchasing it offline. On the web platform, you may compare different plans and make an informed and unbiased decision. On the other hand, offline plans can be more expensive and a hassle to purchase.
  • Another Key Step Is Deciding on the Term Insurance Plan's Duration A term insurance policy typically protects a person until they reach retirement age. This used to be up to 60 years, but it has since increased. Hence, it's a good idea to purchase term insurance until you're at least 65 years old. The term policy's tenure should ideally equal the difference between the person's expected retirement age and current age. However, keep in mind that the older you get, the higher your insurance premium will be.
  • Compare the Costs and Benefits of a Term Plan By comparing the costs and benefits, you will be able to access the benefits and drawbacks of having the policy plan and making an informed decision. 
  • Don't Overlook Another Crucial Aspect of Term Insurance: The Claim Settlement Ratio.  An insurance company's claim settlement ratio notifies a person of the number of policies that have been settled by paying back claims in the event of death. Purchasing term insurance from a firm that denies your claim defeats the point of purchasing the policy in the first place.

How Does the Term Plan Work?

  • If you choose a term insurance plan, a lump sum payment will be made to your family in the event of the policyholder's death.
  • You can choose to receive term insurance benefits in the form of a regular monthly income or a lumpsum payment, depending on the option you choose.
  • Riders can be added to a basic term insurance policy for better coverage in the event of an accident, disability, or severe illness at a low cost.

Why Choose Bharti AXA Life Term Insurance Plans?

Here is why you should think about purchasing a Bharti AXA life term insurance plan:

 

  • A High Rate of Claim Settlement

    The number of claims paid out versus the number of claims filed is known as the Claim Settlement Ratio. It is preferable to go with an insurer with a greater settlement ratio. This is because a greater ratio gives you more confidence that your claim will be authorized when you need it. The claim settlement ratio of Bharti AXA Life is among the finest in the country.

  • Outstanding Customer Service

    What can be more relaxing than realizing that your insurer is committed to making your experience as easy as possible? You may rest assured that your questions will be answered by the method of your choosing, which includes phone, email, and social media. You may make payments quickly and easily using a variety of online payment methods.

  • Longer Coverage

    Now is the perfect time to purchase life insurance. It will help you to receive life insurance with reasonable premiums for the term you want. You can opt for Bharti AXA term insurance plans covering up to the age of 85, and you can also receive whole life insurance up to the age of 99.

  • A Vast Array of Options

    Customers have varying requirements, and Bharti AXA Life Insurance recognizes this and therefore offers multiple alternatives. Besides, there are a variety of riders available to supplement your term insurance coverage.

  • Befitting Plans as Per Your Financial Constraints

    Paying a term insurance premium can be challenging after paying your monthly rent, phone, & electricity expenses. The nominal premiums of Bharti AXA ensure that they fit within your budget.

What Should Be the Duration of Term Life Insurance Policy?

The duration of your term plan is just as crucial as the premium amount you pay. You pay a higher annual premium for a term insurance policy if the policy duration is long. If your policy duration is too low, you may find yourself sans coverage during a time when your family members will still require financial assistance. When buying a term plan in India, it is necessary to consider essential elements, including the term plan’s duration.

 

  • Consider your Main Goal: The key purpose of term life insurance is to assist your family in meeting their on-going expenses & future needs while you are not there. As a result, the perfect duration of an online term plan should end when you have completed all of your life goals and have enough money set aside for retirement.
  • Decide on the Tenure: Buying term insurance early in life and opting for the longest coverage feasible is a sensible strategy. This assures that you benefit from the low premiums for the term plan's whole duration. For example, if you are 25 years old, you can choose a 40-year term, which means you will remain covered until you are 65. You would benefit from the affordable premium till the conclusion of the term in this situation. 
However, when your income and lifestyle improve, you will need to periodically boost your term life insurance coverage to cover all of them, in addition to taking out loans. You must obtain sufficient life insurance coverage and guarantee that it remains such until your family requires it. It is your job to make sure your family is financially secure in the case of an emergency.

Term Insurance Claim Process

  • The first step involves informing us about your intention to file the claim. Then, get a hold of the claims form that you can find both at our physical outlet and Bharti AXA Life’s online portal. The claims form will involve filling in details such as cause of death, name of the beneficiary, the location of the death, and personal details such as date of birth of the beneficiary, policy number and name of the beneficiary are some of the other aspects.

     

  • The next step involves arranging all the necessary documents that you will need to ensure that your claim goes through successfully. Some of the main documents that you need to keep handy if you are looking to file a claim include the death certificate pertaining to the deceased registered under the policy, age of the deceased, original copies of the policy document, ID proof of the beneficiary, and any medical reports/records of the beneficiary’s demise.

     

  • Once the claims form and the necessary documents are submitted, the claim will be processed within 30 days. However, in some cases, additional steps will be undertaken by the insurer. This is especially true in cases where claims are made within 3 years since the purchase of the policy, in place of which additional investigation is undertaken. This includes checking with the hospital where the deceased registered under the policy was admitted before his/her demise.

     

How to Calculate Term Insurance Premium?

When buying a term insurance premium, it is important to know the amount of premium to be paid to continue availing the benefits. Policy buyers can use the term insurance calculator to get the approximate premium rate of the policy. Rate of premium can be evaluated according to the chosen plan and the details of the applicant. Generally, the rate of premium for young insurance buyers is less as compared to someone above the age of 50.

 

Apart from this, several factors affect the rate of premium. Firstly, the term insurance policy buyer needs to fill in information regarding their personal and medical details and their choice of plans and add-ons. This includes age and gender of the applicant, name of the plan, premium payment frequency, sum assured, tenure, date of birth of the applicant, rider, and proposer’s name. The applicant will receive the approximate premium amount calculated by the term plan calculator by adding these details. It is vital to consider your family’s and your own insurance requirements, your coverage amount, age and gender, and occupation before finalising the appropriate term plan.

What Our Customers Say

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Website navigation was very simple and easy to understand, I have purchased Premier protect plan for that premium was less & affordable, <...

Dr Rojalin Sahoo

Keonjhar | May 14, 2021

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I was worried for my family protection so I have decided to purchase Term plan, I connected to Bharti axa associate and got best experience, Purcha...

Yogesh Kumar

Sonipat | May 13, 2021

Types of Term Insurance Plans offered at Bharti AXA Life

Bharti AXA Life Flexi Term Pro

  • Get insurance on your own terms with Bharti AXA Life Flexi Term Pro. #DoTheSmartThing

Bharti AXA Life Saral Jeevan Bima Plan

  • Non-Linked Non-Participating term insurance plan
  • Double the sum Assured on death due to Accident
  • Flexibility to choose a policy term
  • No medical examinations• Ease of purchase as no lengthy underwriting procedures are involved.
  • Tax benefits

Bharti AXA Life Flexi Term Plan

  • Covers Critical illness at the age of 75.
  • Option to select between Comprehensive cover or Major illness cover
  • Flexible benefit payout option. Payout options based on your financial requirements– a) Lump sum or b) Increasing Monthly Income or c) Lump sum plus Increasing Monthly Income.
  • Tax benefits on the Premiums paid and payout benefits received.

Term Insurance – Frequently Asked Questions (FAQs)

How much term insurance cover do you need?

A term insurance cover must generally be 15-20 times of your annual income. The expert recommended formula for this is that if your annual income is Rs. 6 lakhs, you must purchase a cover for minimum Rs. 90 lakhs to Rs. 1.20 crore.

Term insurance policy period must be decided by considering and assessing your individual and familial situation and requirements, including your age and health, family members’ age and health conditions, liabilities, assets, future goals, etc.
The tenure of the term plan must be decided by considering and assessing your individual and familial situation and requirements, including your age and health, your family members’ age and health conditions, liabilities, assets, future goals, etc.

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Factors Impacting Term Plan Premium

Term Insurance

A basic insurance plan which provides a lump sum amount to the family of the person who is insured in case of his/her unfortunate death.

Term Life Insurance

A form of life insurance which provides coverage for a specified period of time and does not build cash value.

Sum Assured

Sum assured is the amount that an insurer agrees to pay on the occurrence of a stated contingency (eg: Death).

Rider Premium

It is the additional cost that has to be paid to attach a rider with a base Insurance Plan.

Deposit Term Insurance

This is a form of term insurance, not really involving a "deposit," but one in which the first-year premium is more than subsequent premiums.

Whole Life Plan

A life insurance plan which provides a cover for your entire life time. Such plans are used to accumulate and pass on the wealth from one generation to another as legacy in a tax efficient manner.

For more details on risk factors, terms and conditions, please read sales brochure carefully before concluding a sale
Note: Riders are optional and available at an additional cost
Note: Tax benefits are as per the Income Tax Act, 1961, and are subject to any amendments made thereto from time to time

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