Term Insurance

Most-Asked Questions Answered!

What is Term Insurance?

Term insurance is a pure-risk cover. While the policy is active, it offers coverage to the nominee in the case of demise of the life insured. To know more,

• Get a lump sum amount 

• Get a monthly regular income

• Get a combination of lump sum and monthly regular income

For their nominee, the life insured can select one of the following pay-out methods:

How is the cover amount paid to the nominee?

A term insurance plan offers the following benefits:

High life cover at a low price
Financial protection
● Option to add on riders
● Flexibility to choose policy term
● Flexible premium payment modes
Tax benefits

Why should I buy term insurance?

There are two tax benefits available:

1.  As per Section 80C* - tax benefits can be claimed on premiums paid towards a term insurance policy up to a limit of Rs 1,50,000.

2.  As per Section 10(10D)* - the death benefit received by the nominee(s) upon the death of the life insured is tax-free.

What are the tax benefits of term insurance?

The term insurance coverage amount should cover the following:

● Immediate loans and liabilities.
● Long term goals like children's education, etc.
Regular expenses like monthly bills of groceries, maid, etc.

How much term insurance is required?

Any individual with even one dependent on his/her income must buy a term plan.

Who should buy a term plan?

Term plan is expected to replace the income when the earning member is not around. Hence, the duration of a term plan should be typically up to the retirement age.

 In case the term plan is intended to cover a loan/liability, the duration should match the term of such loan/liability.

What should be the duration of a term insurance plan?

Ankit is a 35 years old healthy non-smoker male.

Let us understand this with the help of an example:

How does a term insurance plan work?

He buys the Future Generali Care Plus with:
● Policy Term = 25 years
● Premium Payment Term = 25 years
● He has two plan options to choose from.

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Life Cover with Base Sum Assured of Rs. 1 Crore

If he chooses Option 1:

Extra Life Cover (Life Cover with Accidental Death Benefit) with Base Sum Assured of Rs. 1 crore and Accidental Death Sum Assured of Rs. 1 Crore.

If he chooses Option 2:

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Speak to our trusted financial experts and get your queries resolved.

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