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Need assistance in choosing the right insurance plan? Get a call from our Expert.

Need assistance in choosing the right insurance plan?Get a call from our Expert.

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What is Guaranteed Term Life Insurance?

Guaranteed term life insurance plans are term plans that do not ask for your medical condition, medical examination reports, lifestyle, or medical history. They are ideal for individuals in the middle or senior age bracket with existing or possible health issues.
 

Mr Narayan, a 45-year-old college professor, wanted to buy a life insurance policy for himself to ensure the financial independence of his family even in his absence. However, due to his history of medical ailments, he was not able to procure the benefits of term insurance, as routine term insurance policies required him to undergo medical check-ups and submit detailed medical records. 
 

When he shared his concerns with Mr Rajan, a close friend, he came to know about guaranteed* term life insurance plans. To his relief, he could get guaranteed term life insurance coverage for himself and put his worries to rest. 
 

Guaranteed term insurance plans are a boon for people with existing health issues. Let us find out in detail about this unique term life insurance product.

What is Guaranteed Term Life Insurance?



A guaranteed term life insurance plan is a category of whole life insurance plan. But unlike life insurance, guaranteed term life insurance does not require the insured to undergo medical examinations or answer health questions when buying the policy. 
 

If you are buying guaranteed term insurance, the insurance company will not ask for your medical and prescription records to decide your guaranteed term life insurance rates. 
 

A guaranteed term life insurance policy continues to provide you coverage till you pay the policy premiums regularly. Additionally, the premium rates for this policy do not change even if the insurer changes their fees during the policy tenure.

Who is Eligible for Guaranteed Term Insurance?

The most essential feature of a guaranteed term insurance policy is its flexible eligibility criteria. Since the medical history and present medical condition are not criteria for rejection for this policy, anyone can apply for it. People suffering from various health issues like heart ailments, diabetes, cancer, etc., can buy a guaranteed term life insurance plan.
 

With that said, it is advised to consult the insurance company of your choice to understand the exact eligibility criteria for guaranteed term insurance. Usually, people who fall in the age bracket of 50 to 80 years are eligible for it.

Pros and Cons of Guaranteed Level Term Life Insurance

Here is a list of the pros and cons of a guaranteed level term life insurance plan:
 

Pros:

  • Do not require a medical examination or past medical records.

  • No health questions are asked by the insurance provider.

  • Excellent choice for people who cannot buy regular term insurance plans due to their health issues.

  • Helps people with health issues get some amount of financial security for their family.
     

Cons:

  • The coverage amount is lower than regular term insurance plans.

  • They are usually more expensive than regular-term insurance plans due to the inherent risk.

  • There is an initial waiting period. The beneficiary will not receive the death benefit if the policyholder dies during the waiting period.

How Does Guaranteed Term Life Insurance Work?

Usually, a guaranteed term insurance plan has a waiting period of 2 to 3 years. It means if the policyholder dies during this waiting period, the plan beneficiaries do not get the death benefit. This clause is essential because the medical condition of the policyholder is not considered when rolling out this policy.  
 

However, insurance providers ensure that the policyholder's family is not left without any financial support at all in the event of the policyholder’s death during the waiting period. If such a situation arises, the insurance provider returns the entire premium amount paid by the policyholder during the waiting period to the nominee, along with some interest. 
 

You can apply for a guaranteed term insurance plan with an insurance provider and fill out the application form. With most insurers, you will have to pay a fixed monthly premium against this policy. Your nominee will receive the death benefit, subject to the policy terms they can use to meet their immediate financial responsibilities, like debts and medical bills.

Who Should Buy Guaranteed Renewable Term Life Insurance?

Since the death benefit of a guaranteed term life insurance plan is relatively low for a higher premium amount, it is not suitable for everyone. 
 

Here are some situations where a guaranteed term life insurance plan would be suitable for you:

  • If you have been recently diagnosed with a health condition, you can opt for a guaranteed term insurance plan, even in your younger years.

  • If you have a long-standing existing medical condition or past medical history which may make it difficult for you to get a regular term insurance plan. 

  • If you are in your middle age or later life stage and are prone to health issues in the coming years.

Wrapping Up

Guaranteed term life insurance plans are pure protection plans that do not require you to undergo any medical examination to get the insurance policy. Additionally, you need not submit medical records or answer health or lifestyle-related questions to get guaranteed term insurance. 
 

However, these plans have a waiting period, and the coverage amount is relatively lower than regular term insurance plans. Therefore, it is advisable to assess your medical condition and insurance needs before purchasing these plans.

 

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Tata AIA Life Insurance

A joint venture between Tata Sons Pvt. Ltd. and AIA Group Ltd. (AIA),  Tata AIA Life Insurance  is one of the leading life insurance providers in India. We post everything you need to know about life insurance, tax savings and a variety of lateral topics such as savings and investments in this space. You can access and read a host of different blogs, articles and pages at the Tata AIA Life Insurance Knowledge Center or get in touch with us with any queries or questions!

View all posts by Tata AIA Life Insurance

Frequently Asked Questions

What is the guaranteed premium term?

The term "guaranteed premium term" typically refers to the duration during which the premium payments for an insurance policy or financial product are guaranteed to remain constant. This term is commonly associated with certain types of life insurance policies, such as term life insurance.
 

For example, if you purchase a 20-year term life insurance policy with a guaranteed premium term, your premiums will stay constant for the entire 20-year period, regardless of changes in your health or other factors.
 

The guaranteed premium term is an important consideration when selecting a life insurance policy because it helps you budget for the cost of insurance over a specific period. After the guaranteed premium term expires, some policies may allow premiums to increase or be subject to change, so it's essential to understand the terms of the policy you're considering.

What is a guaranteed term life annuity?

A guaranteed annuity is a type of annuity that pays out for a certain period and then keeps providing payouts to the nominee after the annuitant dies.

How long does it take to get guaranteed term life insurance coverage?

Typically, the plan gets into effect within a few weeks of purchase. However, you have to wait out the waiting period of 2 to 3 years before you can become eligible for the death benefit under the plan.

Disclaimers

  •  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 the 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.

  • Guaranteed/Guarantee: *Guaranteed Returns/Payouts depend on Plan Option, Policy Term, Premium Payment Term and Age at entry