In the wake of the unprecedented challenges brought about by the COVID-19 pandemic, individuals across the globe are reevaluating their priorities and redefining what truly matters. As families grapple with uncertainties, the need for financial security has never been more critical. In India, one financial instrument has emerged as a cornerstone in the realm of life insurance, offering a pure and essential solution - the Pure Term Insurance Plan.
In this article we will explore the significance of Pure Term Insurance Plans, shedding light on how these plans serve as a reliable shield against economic uncertainties. Let’s explore the features, advantages, and considerations that make Pure Term Insurance Plans a cornerstone of responsible financial planning in India.
What is a Pure Term Insurance Plan?
A Pure Term Insurance Plan, often referred to simply as term insurance, is a straightforward and cost-effective form of life insurance. Unlike other types of life insurance policies that combine insurance coverage with investment components, pure-term insurance focuses solely on providing a death benefit to the nominee or beneficiary in case of the policyholder's demise during the policy term.
Features and Benefits of Pure Term Insurance Plan
Here are the key features and benefits of pure term insurance plans in India
- Death Benefit: The primary purpose of a pure term insurance plan is to provide a lump-sum amount to the nominee or beneficiary in the event of the policyholder's death during the term of the policy. This ensures financial security for the family in the absence of the breadwinner.
- No Maturity Benefit: Unlike other life insurance plans, pure term insurance does not offer any maturity or survival benefits if the policyholder outlives the policy term. This makes term insurance purely protection-oriented.
- Affordability: Pure term insurance plans are generally more affordable compared to other life insurance products because they don't include investment or savings components. The premiums paid contribute only to the risk cover, making it a cost-effective option.
- Customization: Policyholders can often customize their pure term insurance plans based on their specific needs. They can choose the sum assured, policy term, premium payment term and other features according to their financial goals and responsibilities.
- Tax Benefits: Premiums paid for pure term insurance plans are eligible for tax benefits under Section 80C of the Income Tax Act. Additionally, the death benefit received by the nominee is generally tax-free under Section 10(10D).
Best Pure Term Insurance Plan Price List in India
|AEGON Life Insurance
|Aegon Life iTerm Comfort Plan
|Bajaj Allianz Life Insurance
|Bajaj Allianz e Touch Plan
|ICICI Prudential Life Insurance
|ICICI Prudential iProtect Smart Plan
|HDFC Life Insurance
|HDFC Life Click 2 Protect Super Plan
|Kotak Mahindra Life Insurance
|Kotak e-Term Insurance Plan
|PNB MetLife Insurance
|PNB MetLife Mera Term Plan Plus
|TATA AIA Life Insurance
|TATA AIA Sampoorna Raksha Supreme Plan
|Max Life Insurance
|Max Life Smart Secure Plus Plan
*The above-mentioned values are for reference purposes only * Please refer to our website for exact values.
How to Buy Pure Term Insurance Plan Online
The best way to buy a pure term insurance plan online is through the PolicyBachat website where you can get a pure-term insurance policy in 4 simple steps. The below steps are to be followed for a pure term insurance plan.
Step 1: Go to the PolicyBachat website and click on the “Term” tab.
Step 2: Next enter the below details clearly and correctly
- Gender of the applicant
- Tobacco consumption; Yes or No
- Annual income from the options given in the calculator
- Occupation type; Salaried or Self Employed
- Age of the applicant; to be entered as Date of Birth
- Name of the applicant and Email ID of the applicant.
Step 3: In this step, you can enter your requirements such as:-
- Sum assured required under the term insurance policy
- Tenure: maximum age the coverage is required
- Premium Payment Type: Regular or Lump Sum or Limited Pay
- Premium Payment Frequency: Monthly, Quarterly, Half-yearly, or Yearly
- Payout Type: Lump sum or Income or Combination of both
- Add-ons such as Critical Illness Cover, Waiver of Premium, and Accidental Disability Cover can be selected and the premium would change accordingly.
Step 4: The final step is where you need to make payment to the insurance company and it only takes a few minutes to finish this process. The premiums displayed may be changed subject to medical underwriting. Once the premium payment is made, the customer receives confirmation regarding the same and the next step would be the telemedical or physical medical verification where the customer needs to undergo medical tests or declare his health condition on the telephone to the insurance company before the policy purchase.
How to Choose the Right Term Insurance Plan
Choosing the right term insurance plan is a crucial decision that involves considering various factors to ensure that the policy meets your needs and provides financial security to your loved ones. Here are some steps to help you choose the right term insurance plan:
- Assess Your Coverage Needs: Evaluate your financial responsibilities, such as loans, dependents, and future expenses. Consider your current and future income, outstanding debts, and your family's lifestyle.
- Determine the Coverage Amount: Choose a coverage amount that adequately addresses your family's financial needs in case of your demise. Opt for coverage 10-15 times your annual income.
- Policy Duration: Decide the policy term based on your financial goals and the time your dependents will need financial support. Some policies offer the option of selecting coverage up to a certain age, while others have fixed terms.
- Type of Plan: Understand the different types of term insurance plans, such as level term, increasing term, and decreasing term. Choose the type that aligns with your financial objectives and preferences.
- Riders and Add-Ons: Evaluate the available riders offered by the insurance company. Common riders include accidental death benefits rider, critical illness rider, and waiver of premium rider. Choose riders that enhance the policy's coverage.
- Claim Settlement Ratio: Check the claim settlement ratios of life insurance companies. A higher ratio indicates that the insurer settles a higher percentage of claims.
- Compare Premium Amount: Compare premiums from different life insurance companies. Consider your budget and ensure that the premium is affordable throughout the policy term.
- Understand Policy Exclusions: Thoroughly read and understand the policy document, especially the exclusions. Be aware of situations or events not covered by the policy.
- Review the Policy Features and Benefits: Consider features such as flexibility in premium payments, the option to convert the policy, and any other features that align with your preferences.
How Pure Term Insurance Differs from Other Life Insurance Plans
|Pure Term Insurance
|Other Life Insurance Plans
|Pure protection against death during the term
|Combines protection with savings or investment features
|Specific term such as 10, 20, 30 years.
|Lifetime coverage or specific term
|Higher with an investment component
|Does not accumulate
|May accumulate over time
|No investment component
|May include an investment or savings element
|No maturity benefit
|It offers a maturity benefit if the insured survives the policy term
|You can customize it as per your requirement
|You can customize it as per your requirement
|Premiums primarily for coverage
|Premiums are divided between coverage and savings/investment
Ramana’s Family's Financial Security
Mr Ramana, a 35-year-old IT professional, was the sole breadwinner in his family. Recognizing the importance of financial planning, he opted for a pure term insurance plan with a sum assured of Rs. 1 crore for a policy term of 25 years.
Unfortunately, Mr. Ramana passed away due to a sudden illness at the age of 40. The pure term insurance plan ensured a lump sum payout of Rs.1 crore to his family, providing immediate financial support.
The total sum assured allowed the Ramana family to pay off outstanding debts, including a mortgage and educational loans. The family was able to maintain their lifestyle, cover day-to-day expenses, and plan for their children's future education.
The pure term insurance plan stands out as a cost-effective financial tool that serves the fundamental purpose of providing financial security to the insured’s loved ones in the event of their untimely demise. By planning and getting the right coverage, you're making sure that your loved ones will have the support they need no matter what. Compare term insurance quotes online now at PolicyBachat to get the best policy at an affordable price.