FAQ of Term Life Insurance Policy:


1.     What is Term Insurance?:Term insurance plan is a form of life cover, it provides coverage and claim is payable on Death of the Insured or in some Term Plan where there is predetermined years known as r defined period of time, and if the insured expires during the term of the policy then death benefit is payable to nominee. Term plans are specifically designed to secure your family needs in case of death or uncertainty
2.     What are the benefits of term life insurance?: If the life insured dies during the term, the death benefit will be paid to the beneficiary. Term insurance is typically the least expensive way to purchase a substantial death benefit on a Sum Insured amount over a specific period of time.
3.     How does the TERM INSURANCE Policy work? : When you buy a term life policy, you are buying a promise from an insurance Company that it will pay your beneficiaries a set amount if you die during the policy's term. In exchange, you pay a monthly/yearly premium to the insurance company for the duration of that term. ... That's why life insurance costs more as you get older
4.     What is the difference between term and whole life insurance?
In case of whole life Insurance the Insured pays the premium till he dies and the claim is paid to the beneficiary of the Insured. In Term Insurance the Policy period is fixed and the Policy amount is payable if the Insured dies during the Term period.
5.     What are benefits to have a term Insurance Plan?
a.     • Instant Life coverage.
b.     • High coverage at a very lowest premium.
c.      • Applicants can avail regular as well as single payment mode depending on their choice.
d.     • Both online and offline modes are available for the purchase of the policy.
e.     • Policyholders of this policy are eligible to avail tax benefits as per Section 80C of the Income tax act
f.       • To extend the benefits of the policy, you can avail an additional rider as well like Covers of critical diseases, accidental death with add ons
g.      Flexibility: In case of term policies, if you stop paying premium, the risk cover comes to an end and thereby, the policy ends. This means there is nothing payable to you as there is no savings element in the policy. So, if you stop paying premiums in the mid-term, there is a financial loss as you cannot recover your savings portion of the policy without certain deductions.
h.     Simplicity: Term insurance plans are that insurance plans which are very easy to understand, such as endowment plans which blends up the savings with the coverage of the risk. The plans which include the coverage of risk are known as cash value policies. In simple words, term plan is defined as pay the desired amount of premium and get yourselves covered under the term policy.
i.       Competitive Pricing: On the basis of price, term life plans can be easily compared with each other as they are structurally similar and easy to understand.

6.     What are summary of features of term Insurance Plan.
Features inherent to term life and those that differentiate it from other life insurance types include:
I.          Temporary Coverage
II.          Pure Death Benefit
III.          No Capital Build-up
IV.          Fixed Coverage Amount
V.          Increasing Premiums
VI.          Medical Exam for Qualification
VII.          Tax-Free Inheritance

I.          Temporary Coverage
Term life insurance offers coverage for a limited period of time, typically 10-30 years. Unlike other types of life insurance, a term policy eventually expires. This can be a positive or negative feature depending on individual circumstances. On the one hand, temporary coverage means lower start-up premiums. On other other hand, once the policy expires it might be difficult to secure an extension due to worsening health conditions. If you can accurately predict the length of time for which you need coverage, term life insurance is most economical.

II.          Pure Death Benefit
Permanent forms of life insurance come with savings and investment components that may or may not be suitable for your needs. Term life offers no such component; think of term life as life insurance proper, whose aim is to provide a lump-sum payout upon the death of the policy owner. This benefit can be used to pay for funeral and medical costs or to replace lost income. If you want to grow wealth in your life insurance policy, consider a permanent type of insurance life universal or variable.

III.          No Capital Build-up
Term life insurance doesn't accumulate wealth over time as a whole, universal, or variable policy would. As with car insurance, term life premiums go directly towards securing compensation in case the unthinkable should occur. Once you stop making premium payments or the policy matures (reaches the end of its term), you are left with zero capital. Premiums are used to solely fund the death benefit, and if no death occurs, the insurance company never pays out. This is a direct cost of insuring against risk of death.

IV.          Fixed Coverage Amount
Like all life insurance, term life can be purchased with widely varying death benefits, normally the Insurance company grants Sum Insured equivalent to 20 times the yearly income of the Insured.
One downside of term life policies is that once a coverage amount is set, it cannot be increased or decreased. This is not a problem in theory if you can accurately estimate the right level of coverage for the full length of the policy's term, but in practice your financial situation will change many times over the course of 10-30 years. If you want a flexible coverage amount and annual premium, consider universal life or variable universal life.

V.          Increasing Premiums
Most term life insurance (non-level term life) comes with premiums that increase every year. This results from the rising risk of death as the policyholder ages. Fundamentally, all life insurance faces the grim reality of escalating mortality charges. The difference is, permanent life insurance averages out later premiums with former ones, enabling the owners to fund their policies with uniform annual payments. If level premiums are important for you, consider purchasing level term life or a permanent life insurance policy. If you only need temporary coverage, a level-premium policy is to your disadvantage.

VI.          Medical Exam for Qualification
Except for guaranteed life, virtually all forms of life insurance force potential policyholders to undergo a medical examination before issuing a policy. The exam is performed by a paramedical hired by the insurance company. The paramedical can come to your home or office to administer the health exam, which typically consists of taking physical measurements life height and weight, taking a blood and urine sample for analysis, and asking medical history questions to ascertain hereditary conditions that might put you at greater risk of death. Based on the test results the insured is given a rating class (Preferred Plus, Preferred, Standard Plus, Standard) which skews premiums higher or lower.

VII.          Tax-Free Inheritance
A great benefit of all insurance types is the ability to pass on wealth tax-free and avoid estate taxes. Unlike other investments vehicles, life insurance is uniquely designed as a wealth transfer instrument. Beneficiaries don't have to pay taxes on any funds coming to them via a life insurance death benefit.

7.     CAN I CHANGE my nominee after the issuance of the Policy? Yes, you can change your nominee anytime during the policy period. However the nominee should be a blood relative or spouse.
8.     IS there a provision of refund of Policy? There is a free look period of 30 days that the insurance company offers in which you can choose to cancel the policy and full refund of the premium will be given.
9.     Can I change the duration of life cover after the policy is issued to me?: The duration of life cover cannot be changed once the policy is issued.
10.  Will my premium amount change during the tenure of the policy?: Once the policy is issued to you, the premium amount stays the same throughout the entire tenure of the policy. This also depends on the tax regulation declared by the Government of India.
11.  What if I want to surrender my policy during the policy tenure?: If you wish to surrender your policy during the policy tenure, you remain at a loss! Remember that this is a term insurance plan. You won’t gain any benefits if you surrender your policy.
12.  What mandatory documents are required to buy Online Term Plan?
a.     Proof of income/ employment
b.     Proof of age
c.      Proof of education
d.     Proof of address - residence and correspondence
e.     Proof of identity
f.       Photograph
g.      PAN Card copy

13.  Aadhar Card copy
7.     Aadhar Card copy