Nowadays, term insurance is not limited to classic endowment insurance policies. The rise of the insurance market over the last decade has brought in several companies, offering a wide range of choices and possibilities with various plan features. They may consist of a simple life insurance policy, a money-back policy plan for your family obligations, and a pension plan with monthly income sources.
What exactly is term insurance?
An affordable life insurance product, the term plan guarantees a lump sum payment to the insured’s beneficiaries in the event of a disaster causing the passing away of the insured during a specified time. One gets to enjoy the term insurance tax benefits during the policy period.
No compensation is offered if the insured survives the whole term of the policy, except in the case of premium return policies, where the insured receives the total of all premiums paid.
How to buy term insurance online?
To buy a term insurance policy online, follow the steps outlined below:
- Enter your details:
Visit the insurer’s official website and submit the needed information, such as gender, date of birth, smoking and drinking habits, contact information, and monthly income.
2. Enter the policy duration and sum assured:
If you are youthful, choose a longer policy term; if you are middle-aged, choose a shorter one. The premium amount may also be lower at a younger age. As a result, getting a term plan at a young age is advised.
- Select the mode of insurance payment:
- On your demise, your nominee receives a lump sum payment.
- You can choose this option if you have outstanding debts, such as a home loan.
- A portion of your total is guaranteed by a lump sum payment followed by monthly payments to the nominee for a predetermined period.
- This is critical for achieving life goals such as further education and a child’s marriage.
- The recurring monthly payment for a set period.
- Increasing monthly income for a set period.
You can improve your family’s financial security by putting a small amount into additional perks or riders. These other benefits supplied by the insurer to your term insurance policy improve your insurance coverage. If you have a family history of acute diseases such as renal problems or heart attacks, you can pay an extra fee to add a critical illness rider to your plan.
For example, suppose you purchase a term policy with an accidental demise rider. It may pay Rs. 50 lakhs in the event of your passing away, with an extra Rs. 25 lakhs provided if the demise was caused by accident.
4. Complete the KYC form:
You must provide your name, phone number, and address. You may have to upload your ID proof, such as an Aadhar card or PAN card. Income proof, such as tax returns; address proof, utility bills or a driver’s licence; and age proof, such as a passport and recent photographs, are all acceptable.
5. Fill up your medical information:
Enter information such as weight, height, cigarette or alcohol consumption details, medical issues, if any, occupational hazards based on your job type, hospitalisation history, and other relevant details.
6. Health examinations:
If you apply at a certain age or require a high level of insurance, the insurer may request that you undertake health tests. For instance, if you are an applicant who has attained the age of 50, you may have to go through a comprehensive health test.
It is essential to understand policy exclusions, such as demise because of natural calamities, narcotics abuse, or terrorist activities. After agreeing to the terms and conditions, you shall be redirected to the payment gateway.
7. Make an online payment:
You can pay through credit or with debit cards or net banking. A soft copy of your plan would be shared with you by email if your proposal is approved. The hard copy shall be sent by post to you later. Keeping a track of the same can also help you attain term insurance tax benefits in the future.
Note: As of FY 2022-23, there are 2 tax regimes in India – new and old. You can choose any one regime for a financial year after consulting an expert. You could opt for a regime change during the next financial year.
For the relatives of a deceased individual, passing away is an unexpected event. The demise of a policyholder adds to the troublesome nature of a financial crisis. Comparing plans and obtaining the appropriate plan or using an online term plan calculator can help you make smarter choices.
‘Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms, and conditions, please read the sales brochure/policy wording carefully before concluding a sale. ‘