What is Term Insurance? Definition & Meaning of Term Plan | HDFC Life

term plans offer pure life coverage. this means there is no savings/earnings component. They are basic plans that make life insurance more affordable than other options. the policyholder may opt for longer life coverage at a lower premium compared to a similar endowment plan.

some of the key features that make term plans indispensable include

1. longer lasting cover

Because term life insurance plans are more affordable, it is possible for a person to opt for higher life coverage for the same premium as an endowment plan. for example A 30-year-old can get a term plan with Rs 1 crore coverage for a term of 30 years by paying a premium.

Reading: What is a term insurance plan

The Rs 1 crore endowment plan is most likely off limits for most 30 year olds. however, taking a term plan for similar coverage is relatively more feasible.

2. riders

The policyholder can add riders to the term plan, which enhances the usefulness of the policy. so by opting for a critical illness clause or a critical illness plan, for example, he is entitled to receive the sum insured upon being diagnosed with critical illness. this is in addition to the death benefit of an equal amount in the event of death during the term of the policy. there are other clauses to choose from, such as: loss of employment coverage, disability coverage, exemption from premium coverage, among others. The policy holder must select additional clauses based on his specific needs so that the life coverage is more adequate and meaningful.

3. improved cover

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Certain insurance companies offer the flexibility to upgrade life coverage during critical stages of a policyholder’s life. for example, the policyholder may be allowed to increase life coverage by 50% at the time of marriage and 25% at the time of the birth of a parent. This allows you to start with modest coverage and then upgrade as your responsibilities and ability to pay a higher premium increase.

4. innovative features

While insurance companies have been quick to innovate in general, they have been more innovative when it comes to term plans. for example, companies have been quick and proactive in lowering premium rates, even offering additional discounts to certain categories, such as non-smokers, for example. Buying term plans is now quite convenient thanks to the internet. It is possible for a healthy person, as defined by the insurer, to purchase a term plan online without taking a medical exam.

5. tax advantages

Buying term insurance can also bring with it a host of tax benefits. under section 10 (10d) of the income tax law*, the insured sum received by an insured after the expiration of the plan is tax-free; this also applies when the insured renounces his policy or loses his life. In addition, bonuses received with this amount are also exempt from tax, under the terms of article 10 (10d).

6. multiple payment options

When you purchase a policy, you must pay a fixed amount to your chosen insurance provider to receive benefits. You can choose monthly, quarterly or yearly payments, depending on your convenience. what this ensures is the death benefit to the beneficiary, in the event of the death of the insured. It could be delivered as a lump sum payment or in a staggered manner, which is equal to the insured sum.

7. premium waiver

As the term suggests, premium waiver refers to a benefit where any future premium is waived, in the event of special circumstances. for example, this applies in cases where the policyholder is the victim of a permanent disability due to an accident. this is applicable only if all previous premiums have been paid.

who should buy term insurance plans?

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term insurance plans are for everyone. They provide life coverage at affordable premiums for everyone, whether you’re a business person or a salaried employee. they are an excellent protection against the uncertainties of life at any age. For those in their 20s, it’s a wise move to start with a plan that offers high coverage for a low premium, while for those in their 30s with growing families and growing responsibilities, it’s a good hedge against financial uncertainties. Also for those in their 40s and 50s, term insurance can provide adequate coverage for responsibilities such as children’s education and weddings, while allowing them to plan for retirement.

term plan calculator

why buy hdfc life click 2 protect life?

If you look, there are several insurance companies that offer a variety of plans, but it’s always a good idea to choose a brand that is trustworthy and offers credibility. That’s exactly where HDFC Life Click 2 Protect Life comes in. Whether policyholders choose to be covered throughout their lives, or seek to rely on a safety net in their retirement years after age 60, it’s absolutely up to you!

there are 3 plan options available:

  • protection of life:

  • life & rebalancing ci:

  • income plus:

    And if you thought that was it, wait until you find out more. hdfc life click 2 protect life has a claims settlement rate of 98.01%**, and an additional sum is paid in the event of accidental death. there are other benefits, including premium waiver, in case of critical illness.

    opting for additional clauses is also a good option to provide an additional layer of protection. these additional income benefits are applicable in case of permanent total disability after an accident or even in case of critical illness.

    See also: How Long Do You Have to Have Life Insurance Before You Die? – Life Ant