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Benefits of long-term Term Insurance Plans?

Financial experts advise people on buying Term Insurance plans to diversify their investment portfolio. At the same time, a term insurance policy can act as a security blanket to the policy holder’s family in case of unfortunate events. 

An individual can opt for a long-term Term Insurance plan if:

  • They are planning to provide for their family even beyond their death
  • They want to leave some sort of inheritance for their dependents
  • They just want a longer than usual term cover

What is a long-term Term Insurance plan?

A term plan is an affordable life insurance plan. A high life cover can be purchased with a lower premium and with add on benefits. 

Although long-term Term Insurance plans are offered at a higher premium, they can be useful for the family of the covered individual in case of premature demise for paying off loans and maintaining financial stability.

List of Term Insurance Plans in India

The term insurance plans available in India are:

  • AEGON Life iTerm Plan
  • Aviva I Life
  • Bajaj Allianz iSecure cover
  • Bharti AXA Life – eProtect
  • BSLI Protect @ease cover
  • Edelweiss Tokio – Zindagi+ Term Insurance Plan
  • Exide Life Smart Term Insurance plans
  • Future Generali – Flexi Term Plan
  • HDFC Life Click 2 Protect Plus
  • ICICI Prudential – iProtect Smart Plan
  • IDBI Federal – iSurance
  • IndiaFirst Life – Anytime Plan and e-term plan
  • iSelect + Term Insurance Plans from Canara HSBC
  • Kotak Preferred e-term plan
  • LIC’s e-term plan
  • LifeShield term plan from Aditya Birla Sun Life
  • Maha Raksha Supreme plan from Tata AIA Insurance Company
  • Max Life Smart Term Plan
  • PNB Metlife – Mera Term Plan
  • RNLIC Digi-term Insurance Plan
  • SBI Life – eShield policy      

Disclaimer: Paisawiki does not endorse, rate or recommend any particular insurer or insurance product offered by an insurer. 

How to Apply for the Plan?

These plans can be purchased through offline or online mode. Offline mode is the traditional way of getting a policy, either through a registered agent or the branch.

Online term plans are bought through the website of the service provider, and the premium is often discounted in this case as no mediators are involved. The ability to compare many plans easily is also there.

On the web portals, anyone can apply for a quote. After that, more information is provided, like the documents that might be required for such a plan (ID proof, age, and PAN verification, etc.).

Requirements

The prospective buyer should at least have a minimum age of 18 years

  • Identity proof and age proof
  • Address proof (utility bills)
  • Income or salary proof
  • PAN Card
  • Passport Size Photograph 

Salient Features and Core Benefits of the Plan:

Features and Benefits Details
Life covers can be increased with time Some plans are accommodating enough to let the user pay premiums with a pre-defined increasing rate. This is beneficial for an individual who will gain more dispensable income with time
Fixed premium The premium rate at which the policy is bought is never changed throughout the tenure of the plan by the insurer
Tenure Most insurers offer plans up to the age of 60-65 years, but some even extend to the age of 80 to 90 years
Riders can be added Some plans offer add-on covers such accidental death, critical illness, maternity benefits, disability benefits and so on
Flexible payments The payment schedule can also be regular pay (Monthly, quarterly bi-annual and annual payment schedules), limited pay and single pay
Cover loans and liabilities Safety against loans provided in case of untimely deaths Retirement benefits are also offered if pension plans are included
Tax saving benefits A deduction is offered under section 80C, and the payout provided against the death of the insured is also tax-free under section 10D

Compared to Other Plans

  • Compared to other plans, a long-term Term Insurance plan offers the benefit of financial security to the family of a deceased policyholder, at an affordable premium.

    Term plans usually have no saving component. Those that do are offered as term plans that double as a pension plan too. These plans can be used to pay off loans in case of untimely death.

Things to Consider while Buying the Plan

There are certain things a prospective buyer should keep in mind while looking for the best long-term Term insurance plan according to their needs.

  • The reputation of the insurer – 

    The claim settlement ratio for a reputable insurer is always right, which is why one should go their plans.

  • Policy coverage –  

     Buyers should look at inclusions and exclusions attached with a plan.

  • Compare plans from different insurance providers –

    There are many term insurance plans in the market, so it is a good habit to compare policies before committing to anyone plan.

  • Policy holder’s age and health risk profile –  

     Investing in any insurance plan at a young age gives the benefit of paying out a lower premium. The same is the case with pre-existing illnesses. Older and risk-prone individuals are offered a higher premium.

  • If the insured individual has a stable source of income –   

     In the case of a long-term Insurance plan, the user will have to pay premium amounts for a longer duration. The insured individual must consider their employment, their salary, and the feasibility for paying out the premium down the line.

    When in doubt, an investor should look for expert advice. These professionals can assess the profile of the investor for him/her and might help to get the best possible Term insurance option.

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