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What is a Term Insurance policy?
Term insurance is a type of life insurance that provides coverage over a fixed period. If the insured person dies during the time period of the policy, his nominees will receive a death benefit.
The premium paid in the policy is less compared to other types as it has no cash value. Term insurance is considered a safe and secure investment as it provides financial stability to the insurer’s family after the death of the policyholder.
The future is unpredictable for all of us. Today’s saving can be tomorrow’s earnings. In the absence of the breadwinner, many families would require financial support, and that’s exactly what these term insurances lend. It’s the main reason investment experts suggest term insurance policy very often.
Need for term insurance
Why should you buy term insurance online?
- The premium amount is less than the offline insurance purchase.
- The concept of the middleman is avoided in online insurance purchase.
- The additional costs added to the premium amount marking the offline investments are left out in the online platform.
- With Quick buy feature, you can make the term insurance purchase in less than a minute.
- The next second you make the payment; you will receive notification about owning new insurance.
The online system has a reminder system, that reminds on the renewal, and expiry of the policy.
- Online platforms can compare the policies available in the market and get the best of the market.
- The unbiased results provided by Fincover can make you buy the best policy in the market.
Types of term insurance policy
Level term plan
It is the simplest of term insurance. According to this policy, the exact assured amount is given to the beneficiary after the death of the policyholder.
Term Return of Premium (TROP)
The policy is beneficial if the policyholder survives even after the end of the policy term. People outliving the insured period will receive maturity benefits.
Increasing term insurance policy
In this plan, the amount assured will increase every year. This is made to match the inflation over the tenure. The coverage amount depends on the policyholder’s health condition while applying for the policy. The premium rate may or may not change with respect to time.
Convertible term insurance policy
Convertible policy allows the insured person to convert his term policy into a permanent one. For example, you can convert your plan into an endowment plan. Some term insurance policies have built-in conversion options, while some have it as an add-on.
Decreasing term insurance policy
Decreasing term insurance is renewable term life insurance with the sum assured amount decreasing over the time of policy at a predetermined rate. These are essentially used as mortgage redemption plans. In case of death during the loan tenure, this sum assured in the decreasing term insurance plan can be used to pay off the balance due in the loan.
Documents required to buy a term insurance
- Passport size photo
- Identity proofs like Aadhaar card, driving license, PAN Card etc
- Income tax returns filed over the last 3 years or salary slips for the last 3 months
- Form 16 for salaried professional
- Form 16A for self-employed or freelancers
Term insurance exclusions
- Suicide within one year of policy purchase, according to some policies
- Death due to drug/liquor consumption
- Death due to criminal activity
- Complications that arise during pregnancy and childbirth
- Disease or condition that runs over a long period
- War or any nuclear activity
Features & Benefits of term insurance
According to the Income-tax Act 1961, the premium paid towards term insurance plans is eligible for a tax deduction.
There are several payment methods available to buy policies. People can pay according to their convenient Time period- monthly, quarterly, half-yearly, annually. In general, people pay monthly premiums as the amount is easier to pay. Payments can be made through NEFT, Payment Wallets or through the auto-debit feature.
On a maximum count, many insurance companies offer coverage up to 75 years, as it is considered the average age of a person. At the same time, there are certain firms in the market, giving a coverage term of up to 100 years.
People are given a choice to cancel the insurance policy within the grace period. There are many people who have made the wrong decisions; firms give a grace period to revert their decision. The policy can be cancelled within 15-30 days by returning the original documents.
People can purchase insurance policies either offline or online. People can head out to the branch offices of the insurance providers offering term insurance, which is the offline way. The alternate way is that individuals can also buy any kind of insurance policies at any time on Fintech websites like Fincover.
Premiums made are comparatively less when compared to the assured amount. It can be as low as hundreds and thousands, whereas the assured money can be in the range of lakhs and crores. It will vary according to the policy plan you choose.
PROFICORN FINSERV
Advantages
There are several reasons why you should apply
IVA Insurance is an IRDA Approved Direct Broker (Life & General).
We are here to assist you 24/7.
Our unbiased approach ensures you get the best options.
With over 55 insurance companies and hundreds of health policies, Fincover cuts through the clutter and helps you choose the one that is best for you.
How to buy term insurance online?
- Login to “Proficorn Finserv”
- Click on the Insurance -> Life insurance -> Term insurance
- Enter your primary details asked in the page
- Get to see a range of term insurance policies available in the market
- Choose the best policy after analyzing the premium and sum assured
- Select the payment method and finish the payment process
- Take a printout copy of the insurance after purchasing
Please note : The content on this website is subject to change without notice. We do our best to ensure that the information is accurate and up-to-date (2024). We recommend that you always check the respective entity’s official page to get the latest data
FAQ (Frequently Asked Question)
Term insurance is a type of life insurance policy that provides coverage for a specified term or period. If the insured person passes away during this term, the policy pays a death benefit to the beneficiaries.
Unlike whole life insurance, which provides coverage for the insured’s entire lifetime and includes an investment component, term insurance is purely a protection plan that offers coverage for a specific period without any cash value component.
Key benefits of term insurance include affordability, high coverage at a low premium, financial protection for your family, and flexibility to choose the coverage term based on your needs.
Term insurance is ideal for individuals who want to ensure their family’s financial security in case of their untimely demise. It is especially recommended for breadwinners, young professionals, and individuals with dependents.
The premium for term insurance is determined based on factors such as the insured’s age, health, lifestyle, policy term, and the coverage amount.
Many term insurance policies offer the option to renew or convert the policy to a permanent life insurance policy at the end of the term, though this may vary by provider.
If you outlive the term of your policy, the coverage ends and no benefits are paid out. However, you may have the option to renew or convert the policy.