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7 Things To Expect From Your Term Insurance Plan in India

When considering a term insurance plan in India, you should expect seven key things. Read ahead to know more.

  • 3,329 Views
Amit Raje
Written By :
Amit Raje

Amit Raje is an experienced marketer who has worked in various Fintechs and leading Financial companies in India. With focused experience in Digital, Amit has pioneered multiple digital commerce in India. Now, close to two decades later, he is the vice president and head of the D2C business department. He masters the skill of strategic management, also being certified in it from IIMA. He has challenged his challenges and contributed his efforts in this journey of digital transformation.

Amit Raje
Reviewed By :
Prasad Pimple

Prasad Pimple has a decade-long experience in the Life insurance sector and as EVP, Kotak Life heads Digital Business. He is responsible for developing user friendly product journeys, creating consumer awareness and helping consumers in identifying need for life insurance solutions. He has 20+ years of experience in creating and building business verticals across Insurance, Telecom and Banking sectors

Term insurance is one of the most essential financial products that you can invest in to secure the financial future of your loved ones. It offers a straightforward way to provide financial protection in case of the policyholder’s untimely demise.

Key takeaways

  • Term insurance has the most affordable premium.
  • Term insurance plans are highly flexible.
  • Term plans are generally the most cost-effective life insurance options available.
  • Term insurance policies in India offer high coverage amounts.

One of the critical reasons many people prefer investing in term insurance over other life insurance policies is that it has the most affordable premium.

If an unexpected event occurs during the policy period, the insurance company will pay the death benefit to your family member. While term insurance is a pure protection plan, there are certain things that you can expect from your term insurance policy.

1. Easily Fits Your Budget

One of the critical reasons many people prefer investing in term insurance over other life insurance policies is that it has the most affordable premium. A term plan is highly cost-effective, and it provides adequate financial protection to your family.

Today, with the increased competition among insurance companies, you can find many plans at competitive prices. You can purchase a policy with a sum assured as high as ₹1 crore with an affordable premium as low as ₹500 per month.

With such an affordable premium, you can expect your term policy to fit your monthly budget. The premium you pay every month is a worthy expense, considering the protection it offers your family and the tax benefits you get.

2. Prompt Customer Service

Today, as the competition intensifies, insurance companies are focusing on offering impeccable customer services. With the online services provided by the insurers, you can now expect to get 24x7 customer support to help you with any policy-related issues you may be facing.

You can contact the customer support team through chat, email, or phone, and the representatives will be more than willing to guide you through the issue and resolve the problem. Even when you file a claim, you can expect the customer support team to process the request fast so that you don’t face any discomfort.

3. Ability to Upgrade the Life Cover

As you progress in your career, your income will also increase gradually. Today, the majority of the term insurance plans are highly flexible. Based on your changing family situation and insurance needs, you can upgrade your term insurance coverage anytime you want.

For example, if you purchased a term plan with a sum assured of ₹25 lakhs when you were young and unmarried, you may want to upgrade your plan after getting married. You can upgrade your life cover to ₹50 lakhs or a higher amount during renewal and pay the adjusted premium.

Also, you can upgrade your life cover by purchasing additional riders or add-ons like critical illness rider, accidental death benefit rider, etc. These riders provide additional financial support to your family and provide coverage against specific risks that are not covered under your regular term plan.

4. Affordable Premiums

Term plans are generally the most cost-effective life insurance options available, making them accessible to a wide range of individuals, including those with modest incomes. When you purchase a term insurance plan, you can expect relatively low premiums compared to other life insurance policies. The affordability of term insurance allows you to secure a substantial coverage amount without putting a significant strain on your finances.

5. High Coverage Amounts

The primary purpose of a term insurance plan is to provide financial security to your family in the event of your untimely demise. Therefore, you can expect term insurance policies in India to offer high coverage amounts, often referred to as the “sum assured.”

The sum assured is the amount your nominees will receive if you pass away during the policy term. Term plans typically provide coverage ranging from a few lakhs to several crores, depending on your needs and financial circumstances.

To determine the appropriate coverage amount, consider factors such as your family’s financial obligations, outstanding loans, future expenses like education or marriage, and inflation. Choosing a high coverage amount ensures that your loved ones can maintain their quality of life even in your absence.

6. Flexible Policy Terms

Term insurance plans are known for their flexibility in terms of policy duration. Policyholders have the option to choose the policy term that suits their specific requirements. While some individuals may opt for short-term coverage, others may prefer longer-term plans. The choice of policy term should align with your financial goals and the duration for which your dependents will require financial protection.

Additionally, term insurance plans also offer the flexibility to add riders or additional benefits to your policy. These riders can include critical illness riders, accidental death benefit riders, and more, allowing you to enhance your coverage as per your needs.

7. Income Tax Benefits

Investing in a term insurance plan not only provides financial security to your loved ones but also offers tax benefits under Section 80C and Section 10(10D) of the Income Tax Act 1961. Premiums paid towards your term insurance policy are eligible for tax deductions under Section 80C, subject to a maximum limit of ₹1.5 lakh per annum. Additionally, the death benefit received by your nominees is exempt from income tax under Section 10(10D).

These tax benefits make term insurance an attractive investment option for individuals looking to reduce their tax liability while securing their family’s future.

Conclusion

When you invest in a term insurance plan in India, you can expect affordability, high coverage amounts, flexible policy terms, and valuable tax benefits. It is essential to carefully assess your financial goals and the needs of your dependents to choose a term insurance plan that aligns with your objectives. By understanding and expecting these key features, you can make an informed decision and provide your loved ones with the financial security they deserve in case of unforeseen circumstances.

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Ref. No. KLI/22-23/E-BB/2435

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- A Consumer Education Initiative series by Kotak Life