Find the Best Affordable Term Insurance Plan in India

Term insurance is a vital component of financial planning, offering protection against unforeseen circumstances, particularly the loss of income due to the untimely demise of the insured. With the rising awareness of financial security in India, more individuals are incorporating term insurance as a part of their financial strategy. However, the challenge often lies in finding a cheap term insurance plan that meets their needs. This article will guide you through understanding term insurance, factors to consider when choosing a plan, and tips for finding the best term insurance plan in india.

What is Term Insurance?

Term insurance is a pure life insurance product that provides coverage for a specific period, known as the 'term.' It ensures financial protection for the policyholder’s beneficiaries in case of the policyholder's death during this term. If the policyholder survives the term, the policy expires with no payout. This simplicity and focus on risk coverage make term insurance an appealing option for many individuals looking to secure their loved ones financially.

a) How does it work?

Term insurance plans provide financial protection in the event of the policyholder's death during the policy term. Here are the major cogs in the wheel that makes it work:

> Coverage Duration: Term insurance policies are available for fixed durations, typically ranging from 5 to 30 years. This allows individuals to choose a term that aligns with their financial needs and responsibilities, such as raising children or paying off a mortgage.

> Premium Payments: Policyholders pay regular premiums (monthly, quarterly, or annually) for the coverage. Premiums are generally lower compared to other life insurance products because term insurance only pays out in the event of death. 

Unlike whole life or endowment plans, term insurance does not offer any maturity benefit if the policyholder survives the policy term.

b) Types of Term Plans

Term insurance plans come in various shapes and forms. Each type serves different financial goals and needs, so it’s essential to assess personal circumstances when choosing a plan.

1. Level Term Insurance: Provides a fixed sum assured throughout the policy term. Premiums remain constant, making it easy to budget.

2. Increasing Term Insurance: Sum assured increases at regular intervals (e.g., every 5 years). Designed to keep pace with inflation and changing financial needs.

3. Decreasing Term Insurance: Sum assured decreases over the policy term, often used for mortgage protection. Premiums are typically lower than level term plans.

4. Return of Premium (ROP) Term Insurance: If the policyholder survives the term, premiums paid are refunded. Higher premiums compared to standard term insurance.

5. Group Insurance: Often offered by employers, this provides coverage for a group of individuals (like employees). Group policies typically feature lower premiums and may extend coverage to family members.

6. Joint Term Insurance: This covers two individuals, usually spouses, and pays out upon the death of either insured. It’s particularly useful for couples who share financial responsibilities.

c) Application process & Eligibility

Term insurance plans offer several key benefits that make them an attractive option for individuals seeking financial security for their loved ones. Here are some of the primary advantages:

i) Eligibility

To qualify for term insurance, applicants must ensure following requirements:

Age: Typically between 18 to 65 years, although term insurance max age range can vary by insurer.

Health: Disclosure of any pre-existing medical conditions is required. A medical examination may be required based on age, sum assured, and the insurer's policies.

ii) Apply with OneAssure

Applying for term insurance with OneAssure is simple. Follow these 4 steps:

> Call us: Book a free consultation via website or phone number (+91 6364334343).

> Compare plans: Select the best term insurance option that suits you.

> Fill KYC: Provide KYC details and additional reports for any pre-existing conditions.

> Make Payment: Receive a secure payment link via your phone or email. 

Your policy will be issued instantly upon successful transaction.

iii) Documents required

When applying for term insurance in India, you’ll need several essential documents to complete the process. These include:

> Pan Card No.

> Aadhar Card

> Recent Photograph

> Canceled Cheque with Name Printed

> Bank Statements

> Salary Slip of Latest 3 Months

> Covid Vaccination

Factors affecting Term Plan Premiums

Term insurance operates on the principle of risk management. Policyholders pay premiums for coverage during the term, but if they outlive the policy, they do not receive any payout or return on the premiums. This aspect reinforces the idea that term insurance is not an investment; rather, it is a financial safety net. 

Determining low term insurance premium rates can be involves several key factors:

> Age of the Insured: Younger individuals generally pay lower premiums because they are considered less risky. Older applicants may have limited options for longer-term policies, and insurers may charge higher premiums for longer coverage periods.

> Health Status: A healthy lifestyle and medical history can lead to lower premiums. Insurers may require medical examinations and health declarations.  Factors such as smoking, alcohol consumption, and fitness levels can impact premiums. Non-smokers and those with healthier lifestyles often receive discounts.

> Market Competition: The level of competition among insurers can influence premium rates. More competition typically leads to lower premiums. Companies with higher claim settlement ratios may charge slightly higher premiums but offer better reliability.

By considering these factors and comparing different policies, individuals can find a cheap term insurance plan that meets their needs without emptying their pockets.

Why Buy a Term Plan?

Term insurance plans offer several key benefits that make them an attractive option for individuals seeking financial security for their loved ones. They safeguard your family’s future, covering debts and daily expenses without any investment return concerns. Here are some of the primary advantages of buying term insurance:

a) Advantages of term life insurance

> Affordability: Term insurance is typically more affordable than other life insurance products, such as whole life or endowment policies, due to its pure risk cover nature.

> High Sum Assured: you can secure a substantial sum assured at a lower premium, making it a cost-effective way to ensure financial protection for your family.

> Flexibility: Term insurance plans often come with flexible term durations and premium payment options, allowing individuals to choose what best fits their financial situation.

> Tax Benefits: Premiums paid towards term insurance qualify for tax deductions under Section 80C of the Income Tax Act, and the sum received by the beneficiary is tax-free under Section 10(10D).

> Rider Options: Additional benefits that can be attached to a basic term plan, such as critical illness cover or accidental death benefits.

b) Common myths about term insurance

Despite the clear benefits of term insurance, several myths may prevent individuals from purchasing it. Dispelling these myths can help individuals make informed decisions about their financial protection needs.

Myth 1: Term Insurance is Only for Young People

While younger individuals often pay lower premiums, term insurance is suitable for anyone with dependents or financial obligations, regardless of age.

Myth 2: It is Only Available for Healthy Individuals

Some think that only those in excellent health can get term insurance. While health does affect premiums, many companies offer plans even for those with pre-existing conditions.

Myth 3: You Don’t Need Term Insurance if You Have Other Investments

While investments are crucial for wealth creation, they do not provide the same security as life insurance. Term insurance ensures that your dependents are financially protected.

For instance, a young family might opt for a 20-year term policy to cover the years when their financial obligations—such as mortgage payments and children's education—are highest. The lower premium costs compared to whole life insurance enable them to invest the difference, potentially yielding better long-term financial benefits.

Compare Policies to Find the Best Value

Term insurance plan comparison is an essential step to find a cheap term insurance plan. Before searching for a term insurance plan, evaluate your current financial obligations and future responsibilities. Consider factors like dependents, existing debts and future expenses. Once you have a clear picture, you can determine the appropriate sum assured and policy term. 

Here are few important factors that can help you pick out the ideal term policy for you and your family:

1. Coverage Amount

The sum assured should be adequate to cover your family’s financial needs in your absence. It is often recommended to opt for a coverage amount that is 10 to 15 times your annual income.

2. Policy Term

Choose a policy term that aligns with your financial goals and responsibilities. A longer policy term can offer security until your dependents are financially independent.

3. Premium Payment Options

Evaluate the premium payment frequency—monthly, quarterly, semi-annually, or annually. Some insurers may offer discounts for annual payments.

4. Additional Riders

Consider adding riders such as critical illness cover, accidental death benefit, or waiver of premium. These can enhance your policy but may also increase the premium.

5. Claim Settlement Ratio

Research the insurer's claim settlement ratio, which indicates the percentage of claims settled by the insurer. A higher ratio reflects better reliability.

6. Reputation of the Insurer

Choose an insurance company with a strong market reputation, good customer service, and transparent processes. Researching customer feedback and satisfaction ratings can guide you to insurers known for excellent service, which is vital when you need to file a claim.

7. Spot Hidden Fees

Some policies may have additional costs that aren't immediately clear. Comparing different options helps you uncover any hidden fees that could affect your overall expenses.

By prioritizing these factors, consumers can find insurance that fits their budget and provides essential protection.

Best Term Insurance Plan in India

The best affordable insurance plans in the market stand out through their provision of excellent coverage, competitive premiums, and top-notch customer services. Following insurance companies offer a multitude of low cost term plans customized to the needs of individuals, families and senior citizens:

Bottomline

Understanding the role of term insurance in a broader financial context is essential for effective planning, ensuring that both protection and savings objectives are met. Finding an affordable term insurance plan requires careful consideration of your financial needs and diligent research. 

With the right approach, you can secure a policy that provides adequate coverage without straining your budget. Remember to assess your requirements, compare different plans, and consult experts if needed. By taking these steps, you can ensure financial security for your loved ones, making term insurance a worthy investment in your financial future.

As you navigate this important decision, stay informed and proactive in your search for the right plan that aligns with your financial goals and family needs. Need more help with term insurance plan comparison and purchase? Reach out to us on +91 6364334343 and book a free consultation with OneAssure experts.