Term Insurance

What is Term Insurance?

Term insurance is a pure risk protection life insurance plan that ensures the financial security of dependent family members in the event of the breadwinner’s untimely death. Essentially, it provides financial protection to your family for a specified “term” or period. If the breadwinner passes away during this period, the family receives a sum assured, which can help them manage financial needs in their absence. Think of a term plan as your promise to your family to ensure their dreams and goals continue to thrive, even if you’re no longer there.

Features of a Term Insurance Plan

Term insurance is designed with simplicity, flexibility, and peace of mind in mind. Here’s what makes it stand out:

Simplicity: It’s straightforward—pay a premium, and in return, you get a life cover of a significant amount, which helps your dependents in your absence.

Flexibility: You can choose the term length, coverage amount, and even how your family receives the sum assured. Whether it’s a lump sum or regular payouts, it’s all about what works best for you.

Affordability: Term life insurance is one of the most affordable ways to secure a substantial sum assured for your loved ones. Since it is purely a risk protection cover without an investment component, it ensures that the premium paid does not become a huge financial burden.

Riders/Add-ons: Customize your policy with additional benefits for more comprehensive coverage, such as critical illness cover or accidental death benefit, tailoring the policy to your unique needs.

Benefits of Buying Term Insurance

Investing in a term insurance policy goes beyond securing a safety net; it ensures peace of mind for you and your family. Here are some compelling reasons why a term plan is a smart choice:

High Sum Assured: It provides your dependents with a high sum assured, ensuring the family’s financial stability and support when they need it most. This can help cover daily expenses, debts, and future costs like children’s education in your absence.

Peace of Mind: Knowing your loved ones are financially protected allows you to live without worries, focusing on the present while securing their future.

Tax Benefits: Enjoy tax benefits on the premiums you pay and the benefits your family receives, making term life insurance a wise financial choice for securing your family’s future.

Financial Protection: A term plan’s high sum assured provides robust financial protection to your family.

How Does a Term Plan Work?

To understand how a term plan works, consider the story of Arun, a 32-year-old IT professional from Bengaluru. Newly married and planning for a family, Arun recognized the importance of securing their financial future early on. He wanted to ensure that in the event of any unforeseen circumstances, his family would not have to compromise on their lifestyle or future goals, such as his future child’s education or paying off a home loan.

Arun opted for a term insurance plan with a 30-year policy term and a sum assured that was adequate to cover his family’s future expenses, including his home loan and his child’s education. The premium was affordable, fitting comfortably into his monthly budget without disturbing his current lifestyle or savings plans.

How the Term Plan Works:

Financial Security for Family: In the unfortunate event of Arun’s untimely passing during the policy term, his family would receive the sum assured, providing them with financial stability and the means to continue pursuing their dreams without financial burden.

Peace of Mind: Knowing that his family would be financially secure in his absence allowed Arun to focus on his career and family life without the constant worry of “what if.”

Tax Savings: The premiums paid towards the term insurance offered Arun tax benefits, reducing his taxable income and providing additional savings each year. The sum assured as a death benefit that the beneficiary would receive would also be tax-exempt.

Arun’s story is a testament to the power of proactive planning with term insurance, ensuring that life’s uncertainties do not derail the dreams and financial goals of our loved ones.

Term Insurance Plan: Inclusions and Exclusions

Here’s a table outlining what is typically included and excluded in a term insurance plan:

Inclusions	Exclusions
Death Benefit: If the policyholder dies during the term, the nominee receives the sum assured.	Suicide: Claims if the death occurs due to suicide within the first year of policy commencement.
Accidental Death Benefit (Optional Rider): An additional sum assured in case of death due to an accident.	Death Due to Intoxication or Substance Abuse: Deaths arising from substance abuse or intoxication are typically excluded.
Critical Illness Benefit (Optional Rider): A lump sum amount is paid upon the diagnosis of specified critical illnesses.	Criminal Activities: Deaths occurring while engaging in illegal activities or due to involvement in criminal acts are excluded.
Terminal Illness Benefit: Early payout if the policyholder is diagnosed with a terminal illness, helping to cover medical expenses and other needs.	Dangerous Activities: Deaths resulting from participation in high-risk activities like skydiving, racing, etc., without proper disclosure and acceptance in the policy.
Tax Benefits: Premiums paid and benefits received are eligible for tax benefits under existing tax laws. Payouts of term insurance paid to the beneficiary are tax-exempt.	Pre-existing Conditions: Conditions not disclosed at the time of purchasing the policy may lead to the exclusion of claims related to those conditions.

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Our Term Insurance Plans

ABSLI offers a range of term insurance plans designed to meet different needs. Here are two of our featured plans:

1. ABSLI Income Suraksha Plan
   A flexible term plan designed to help you live worry-free.
   • Plan Options: 2 options
   • Life Cover: Up to 70 years
   • Premium Payment Term: Option to choose Limited or Regular Payment
   • Increasing Income Protection Option
   • Sum Assured: ₹60 Lakhs
   • Premium: ₹24.38k/year for 10 years
2. ABSLI Salaried Term Plan
   A term plan tailored for salaried individuals.
   • Plan Options: 4 options
   • Life Cover: Up to 70 years
   • Death Benefit Payout: Choose between lump sum or monthly
   • Inbuilt Terminal Illness Benefit
   • Sum Assured: ₹1 crore
   • Premium: ₹800/month

Term Insurance Riders

Riders are additional benefits that enhance your term insurance plan, offering extra protection tailored to your needs. Here are some popular riders offered by ABSLI:

• Accidental Death Benefit Rider: Provides an additional sum assured in case of death due to an accident, offering extra security for your family.
• Critical Illness Rider: Offers a lump sum amount if diagnosed with one of the specified critical illnesses, helping to manage high medical costs.
• Waiver of Premium Rider: Ensures the waiver of all future premiums in case of critical illness or disability, keeping the policy active without further financial burden.
• Income Benefit Rider: Provides regular income to the family in addition to the sum assured for a specified period, ensuring financial stability.

Types of Term Insurance Plans

Term insurance plans are available in various forms to fit the unique needs and goals of each individual. At ABSLI, we offer a range of term insurance plans, each designed for your security and flexibility. Let’s explore the types:

• Level Term Insurance:
  The most straightforward type, where the sum assured remains constant throughout the policy term. It’s perfect for those seeking simple and stable protection without fluctuations in coverage.
• Increasing Term Insurance:
  Ideal for those anticipating growth in financial responsibilities over time. The sum assured increases at a predetermined rate during the policy term, helping to counter inflation and rising living costs, ensuring your coverage keeps up with your changing needs.
• Decreasing Term Insurance:
  Tailored for individuals with decreasing financial liabilities over time, like a home loan or mortgage. The sum assured decreases at a predetermined rate, aligning with the decreasing loan balance, making it a cost-effective option for loan protection.
• Return of Premium (TROP) Plan:
  If you’re looking for a safety net that comes back to you, TROP is the answer. If you outlive the policy term, all the premiums paid (excluding taxes and rider premiums, if any) are returned, combining protection with savings.

How to Choose the Best Term Insurance Plan?

Selecting the best term insurance plan requires careful consideration of your unique financial situation and future goals. Here’s how to make an informed choice:

1. Assess Your Coverage Needs:
   Consider your financial obligations, future goals, and the lifestyle you wish to secure for your family. This will help you determine the sum assured needed.
2. Consider Policy Term:
   Align the policy term with your retirement age or until your financial liabilities are expected to diminish, ensuring you’re covered when it’s most needed.
3. Check for Flexibility:
   Opt for a term plan that offers flexibility in terms of premium payment options, coverage adjustments, and add-on riders.
4. Consult with Experts:
   When in doubt, speak with financial advisors or insurance experts to get personalized advice tailored to your needs.

At ABSLI, we’re committed to guiding you through this journey, offering plans that are designed with your peace of mind at the forefront. Our goal is to help you choose a term insurance plan that not only meets your current needs but also adapts to your evolving life stages, ensuring your loved ones are protected, no matter what the future holds.

Choosing a Higher Sum Assured for Your Family’s Protection

When safeguarding your family’s future, opting for a higher sum assured in your term insurance plan can make a significant difference. A higher sum assured ensures that your loved ones have enough financial support to maintain their lifestyle, pay off any debts, and fulfill future goals without compromise, even in your absence. Here’s why and how you should consider choosing a higher sum assured:

• Adequate Coverage:
  Factor in inflation and the rising cost of living to ensure the sum assured today will be sufficient for your family’s future needs. A higher sum assured helps to cushion against these economic changes.
• Debt Repayment:
  If you have loans or mortgages, a higher sum assured can ensure that your family can repay these debts without financial strain.
• Education and Lifestyle:
  It can cover your children’s education expenses and support your family’s lifestyle, ensuring they can continue to live comfortably.
• Long-Term Security:
  Offers peace of mind knowing that your family is financially secure for the long term, covering various life stages and needs.

To determine the right sum assured, consider using online calculators provided by insurers like ABSLI, or consult with financial advisors for a tailored assessment based on your income, liabilities, and family’s future aspirations.

Documents Needed to Buy Term Insurance

Purchasing term insurance is straightforward, but having the right documents ready can make it even smoother. Here’s a list of common documents you may need:

• Identity Proof:
  A government-issued photo ID such as an Aadhaar card, PAN card, passport, or driving license to verify your identity.
• Address Proof:
  Documents like recent utility bills, Aadhaar card, or passport that confirm your current residence.
• Income Proof:
  To assess the premium and sum assured you’re eligible for, you’ll need to provide recent salary slips, income tax returns, or Form 16.
• Age Proof:
  Birth certificate, PAN card, passport, or any other document that certifies your date of birth.
• Medical Reports:
  Depending on your age, sum assured, and health declarations, you might be asked to undergo medical tests. Relevant medical reports may be required if you have pre-existing conditions.
• Bank Proof:
  Bank statements or a canceled cheque for setting up the premium payment process and validating your bank account details.
• Photographs:
  Passport-size photographs for your application form.

At ABSLI, we strive to make your experience as seamless as possible. Our team is here to guide you through each step, ensuring you understand the process and requirements. We’re committed to providing you with a term insurance plan that matches your needs, offering comprehensive protection for your family’s future. Remember, the right preparation and documents can expedite the process, bringing you one step closer to securing your family’s financial well-being.

How to File a Claim for Term Insurance?

Filing a claim for term insurance is designed to be as smooth and hassle-free as possible, especially during the challenging times of dealing with a loved one’s passing. Here’s a step-by-step guide to help you through the process:

1. Intimation of Claim:
   The first step is to inform the insurance company about the policyholder’s demise. This can usually be done by contacting the insurer’s customer service via phone, email, or visiting their nearest office. Provide the policy number, date, cause, and place of death.
2. Submission of Required Documents:
   The nominee or claimant will need to submit several documents, including:
   • A duly filled claim form or death claim intimation form.
   • Original or certified copy of the death certificate.
   • Policy document.
   • ID proof of the nominee.
   • Any other documents requested, such as medical records, hospital certificates if death was due to illness, or a police FIR and post-mortem report in case of accidental death.
3. Claim Processing:
   Upon receiving the claim intimation and necessary documents, the insurer will verify the details and assess the claim. They may ask for additional information or documents if required.
4. Claim Decision:
   Once the verification is complete, the insurer will make a decision on the claim. If the claim meets the policy terms and conditions, it will be approved. All insurance companies are required by law to settle or reject a claim within 30 days of receiving all necessary documents. If the claim requires further investigation, the insurer must complete the process within 90 days from the date of claim intimation.
5. Disbursement of Claim Amount:
   Upon claim approval, the insurer will disburse the death benefit to the nominee. The payment method (such as cheque or direct bank transfer) and the timeline will be communicated by the insurer.

Important Tips:

• Ensure that the nominee is aware of the policy details and knows where the policy documents are kept.
• Keep all relevant documents organized and accessible to avoid delays in the claim process.
• If facing difficulties or delays in the claim process, reach out to the insurer’s grievance redressal officers or consider seeking legal advice.

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