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If you plan to buy term insurance, the following set of questions will help you understand what you need to check before purchasing it. We understand that not everyone belongs to the insurance industry. We consider it our duty as insurance providers to help you evaluate and ask everything of importance before buying insurance.
A term insurance policy or a term plan is a life insurance product that pays the policyholder a fixed sum for a fixed period, called a recorded “term”. Your family will get an assured sum or life cover in case of your unfortunate death within the policy tenure, basis the term plan you select.
Yes, you can buy term insurance online. Various insurance providers, such as TATA AIA term insurance, have separate online and offline procedures to help you buy term plans. If you would like to understand the Tata AIA Life Insurance term policy or buy a term plan online, you can always let us know in the comments. We’ll be happy to help!
As it is a life insurance product, a term plan covers you against expenses arising out of accidents, health emergencies, and the untimely demise of your family’s providers, among other things. You might also get a critical illness and disability cover, depending on who your provider is and how much your premium is. Different policies unlock specific features at different periods. You may have to wait for 5 years to unlock the benefits of a critical illness cover. Please read your policy documents to understand the list of inclusions fully.
Any lifestyle-related changes which have not been pre-disclosed but might have caused a health emergency are often discarded. For instance, if a policyholder takes up smoking or drinking or develops a lifelong disease, which was not communicated to the insurer, he/she risks a claim rejection. Moreover, term plans do not provide for theft and property damage. The objective is to safeguard a person’s family against sudden financial losses due to a person’s absence. If the policy buyer’s death was caused by terrorist attacks or natural disasters, categorized under “Act-of-God” events, the claim could be rejected. However, you can get a separate policy to cover you against natural disasters and fire hazards. Most insurance providers can provide more information about this.
If you have migrated to a foreign country, you must inform your policy provider. Most insurance providers will not make a change for countries like Norway or Switzerland. If the country you have moved to is associated with terrorism and life threats, your policy could get revoked. However, for a short trip, each insurer may have separate rules. Many believe that sudden demise while on a trip should be covered under travel insurance. However, some will still cover it.
Yes, NRIs who can present residence proofs and income tax* filings of the previous three years, along with their PAN card, will be able to apply for term plans.
Insurance is subject to the insurer’s will. Sometimes, they mention clearly in the papers that if certain conditions do not remain the same, your premium can be increased. If you develop a critical illness or disability or you indulge in smoking and drinking, your insurance provider will mostly have to increase your premium to compensate for such high-risk factors. However, the revaluation is reasonable in most cases.
In such cases, you can always speak with your term provider and get your term extended. However, the insurer may increase your premium given the health risks that come with advanced age. Moreover, you will have the option to get a lesser coverage as you might have cleared most of your debts.
Since different term plans offer different features, it is typical to choose multiple life insurance. You may opt for a monthly savings plan with one insurer and a whole lump sum plan with another. However, you would have to inform your policy providers in such cases. They will guide you on how to go about claim settlements when multiple providers are involved.
As per Section 80C and 80D of the Income Tax Act, 1961, your insurance policies can get you certain tax relaxations. Every year you pay a premium, you will get a tax relaxation of up to ₹ 1,50,000. However, when you make the final withdrawal, you will have to pay taxes, as is the case when using your life cover as collateral for its surrender value. As per Section 10 (10D), you will be liable to pay taxes on withdrawals.
We hope the article has helped, and you will now be able to choose the right term insurance. If you wish to buy term insurance in India, let us know in the comments. We have some recommendations that might fit you just right! Stay safe, and have a good day ahead.
* Income Tax benefits would be available as per the prevailing income tax laws, subject to fulfilment of conditions stipulated therein. Income Tax laws are subject to change from time to time. Tata AIA Life Insurance Company Ltd. does not assume responsibility on tax implications mentioned anywhere in this document. Please consult your own tax consultant to know the tax benefits available to you
Insurance cover is available under the product.
The products are underwritten by Tata AIA Life Insurance Company Ltd.
The plans are not a guaranteed issuance plan and it will be subject to Company’s underwriting and acceptance.
For more details on risk factors, terms and conditions please read sales brochure carefully before concluding a sale.
This blog is for information and illustrative purposes only and does not purport to any financial or investment services and do not offer or form part of any offer or recommendation. The information is not, and should not be regarded as investment advice or as a recommendation regarding any particular security or course of action.
Please know the associated risks and the applicable charges, from your Insurance agent or the Intermediary or policy document issued by the insurance company.
Every effort is made to ensure that all information contained in this blog is accurate at the date of publication, however, the Tata AIA Life shall not have any liability for any damages of any kind (including but not limited to errors and omissions) whatsoever relating to this material.