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3 Lesser-Known Facts About Term Insurance in India

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A term insurance plan is a kind of financial protection policy. It is primarily an agreement between the insured and the insurance provider that promises to pay a certain amount to the nominees/beneficiaries in the event of the insured's death during a specified period. The amount that the nominees receive is based on the sum assured in the policy.

To avail the benefits of the coverage, the insured needs to pay premiums regularly (such as, annually, half-yearly or monthly). The policyholder can also opt for add-on covers in the form of riders, available at an additional cost.

Due to the various benefits offered, term life insurance in India has become quite popular over the past few decades. Nevertheless, before purchasing a term plan from a reputed insurance provider, you must learn about some hidden facts about this product. So, here are 3 lesser-known facts about term insurance in India.

1. Offers Coverage Up to the Age of 85

Whether you are in your early 30s or late 50s, you can apply for a term insurance plan and avail the benefits of the policy till you turn 85. But keep in mind that if you apply for it very late, you might have to pay higher premiums to get the same benefits. That is simply because the value of your life goes down the more you age. Nevertheless, the plan will still be able to insure you. If you wish to pay lower premiums, consider buying a term plan as early as you can.

2. Rejection of a Claim Can't Happen from a False Disclosure

While buying term life insurance in India, you must not keep information about yourself or your health conditions from the insurer. For instance, many people do not inform the insurance company of their smoking habits since that might attract a higher premium amount. However, this will cost you a lot in the future. When it's time to settle the claim of a term plan, the insurer will thoroughly investigate your medical history, age and certain other factors. If the provider learns that you have withheld any crucial information from them, your claim might be rejected.

3. Sum Assured Is up to 20 Times Your Income

The eligible amount of the sum assured of a term insurance plan is decided based on your monthly expenses and annual income. While doing that, you should also consider the impact of inflation. Usually, the ideal amount of sum assured is regarded as 15-20 times your income. Therefore, the maximum amount of sum assured available is generally up to 20 times the annual income of the insured.

Time to secure the future of yourself and your family with wise financial planning as you step into 2023. This is where term life insurance in India can be helpful. You can apply for it to offer financial protection and independence to your loved ones when you are no longer there to provide for them. Based on the future needs of your financial dependents, consider choosing a suitable term policy.