Term Insurance

Term insurance is the most basic life insurance plan that provides financial protection for a specific time at a fixed cost. The Policyholder needs to pay a certain premium to buy the policy. If he/she dies during the policy term, a death benefit is paid to their nominees in the form of a lump sum. While purchasing term insurance, you can choose the term (period) of the policy, as determined by the insurance provider, based on your age and other vital factors. Several term insurance plans are available in the market as the needs of various insurance purchasers vary.

Why Should You Buy Term Insurance?

Following are the top 3 reasons why you must buy term insurance:

Provides Financial Assistance to Your Dependents

Your family is financially dependent on you. In case of your unfortunate demise, they will need financial support to go on with their life. A term life insurance policy ensures that your loved ones continue to receive the necessary financial assistance to cover their education, medical expenses and marriage plans.

Protection of the Assets

A term life insurance policy is also helpful in safeguarding your family's future interests if you are under debt. In case of your death, the life insurance payout can be used to pay off any debts you have and provide money for your loved ones future needs. Your family will not have to worry about financial stability and will focus on recovering from the personal loss caused due to your death.

Mitigate the Life Risks

Certain risks are associated with our lifestyle, like accidents or illnesses. Term life insurance policy can offer protection against these risks. This key feature can provide peace of mind to you and your loved ones.

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What Are the Types of Term Plans in India?

Insurance companies offer online and offline policies with their own set of features and benefits. Some of the most popular types of term plans include:

This is the most common form of term life insurance. It offers a fixed death benefit when the policyholder dies during the policy term.

Level term insurance is one of the most popular types of insurance where the insured has to pay the same premium throughout the tenure of the plan. It also guarantees a fixed payout in case of the demise of the insured. Thus, it is called a level insurance because the premiums and coverage remains at the same level throughout the term without any alterations.

Group term insurance plan is intended for families, organizations, companies, and clubs. These policies provide the same insurance benefits as an individual term.Each policy is generally modified after a thorough discussion with the insurance company according to the requirements of the particular group so that large number of people can avail the maximum coverage.

It is a term plan that reimburses the premium paid for coverage if the insured individual survives the entire policy period. As the policyholder receives money back from their term insurance policy at the end of the period,therefore these term plans are becoming increasingly popular.

A decreasing term plan is a type of policy that offers a sum assured death benefit that decreases over time. This type of policy is ideal for those who want lower coverage as their needs decrease. Such a term plan is available at a lower premium rate. It protects the insured's family and provides tax-free coverage at an affordable premium price.

This term policy offers the option to convert the policy into a permanent life insurance policy. This type of policy can be ideal for those who want the flexibility to change their coverage as their needs changes over the period of time. For example, if you have obtained a term insurance plan for 25 years, but after 5 years, you want to convert it to an endowment policy or any other, you can do it easily.

Two people together can buy a joint life term insurance plan. These can be husband and wife, parent and child too. It offers death benefits to the other in the event of one policyholder’s death. This type of policy is ideal for those who want coverage for their spouse or child. However, in case of the death of one, the policy will expire.

It provides protection that increases over time. The death benefit rises at a fixed rate each year, making it a good option for those who want protection to keep pace with inflation.

Whole life insurance, also known as traditional term plan or permanent life insurance, goes on for as long as you live. It combines a death benefit with a savings component. The policyholder pays premiums for a specific time and provides coverage forentire life, and the policy does not expire. If the policyholder remains alive for 100 years, the endowment coverage is provided to them as a maturity benefit.

Endowment policies are a type of permanent life insurance policy that provides death benefits and an opportunity to save money. The policyholder pays premiums for a specific number of years (usually 10-20 years), and the policy matures at the end of that period. At maturity, the policyholder receives the death benefit and the policy's cash value.

Woman term insurance is a type of term life insurance policy designed specifically for women. It offers the same death benefit as a basic term insurance policy but typically costs less.

SMC Insurance is committed to providing you with the best experience while buying insurance. We understand that each customer has different needs and requirements. That is why we offer a wide range of insurance products from leading insurance providers in India. You can be sure of getting the best deal on your premium when you buy insurance through SMC.

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What Are the Types of Term Plans in India

Insurance companies offer online and offline policies with their own set of features and benefits. Some of the most popular types of term plans include:

Higher Coverage at Affordable Premiums

Is the best benefit of term insurance that attracts people to it. It is a simple, affordable, and straightforward product that offers protection for a specific period.

All-round protection

Apart from protection against risks associated with lifestyle, a term life insurance policy can also be used to cover debts and other financial obligations.

Coverage up to 99 years

The coverage offered by a term life insurance policy remains valid until the insured person reaches 99 years of age. This ensures that your loved ones will be taken care of even after you are gone.

Buy Early, Save More

The younger you are when you buy a term life insurance policy, the lesser your premiums will be. This is because the insurance company understands that you are likely to live longer and, hence, the chances of a payout are lower.

Lump-Sum Payment on Death

The biggest benefit of term insurance is that it pays a lump-sum amount on death of the insurer. The substantial payout proves to be useful when your family has to plan a life in your absence.

Monthly Income Option in Term Insurance

Your family can receive a monthly income if you die while the policy is in effect. This can be helpful for your loved ones as they can use the income to cover expenses such as rent or mortgage payments.

Save Maximum Tax on Term Insurance

Since term insurance is a pure life insurance product, the premiums you pay are tax-deductible under section 80C of the Income Tax Act. This can help you save money on your taxes.

Attractive Premium Rates for Non-Tobacco Users

Most term insurance policies offer attractive premium rates for non-tobacco users. So, if you don't smoke, you can save even more money on your premiums.

Key Features of a Term Insurance Policy

Term insurance comes with some standard features offered by most insurance providers in India. Let us understandthem:

Grace Period

Term insurance policies come with a grace period, which is a set amount of time after your policy has expired, during which you can still renew the policy without providing evidence of good health.

Suicide Clause

Many term insurance policies also come with a suicide clause, which means that your beneficiaries will not be paid if you commit suicide within a year while the policy is in effect.

Lapsed Policy Revival

This provision allows you to revive your lapsed policy and get back on track with your coverage. The policy can be revived within 5 years from the date of last unpaid premium under the certain insurance companies' terms and conditions.

Death Benefit

In the event of the policyholder's death, the beneficiary will receive a payout that can be used to cover any expenses. There is no restriction on the use of this money.

No Medical Examination Required

Most term insurance policies do not require a medical examination, making it a quick and easy way to get coverage.

Flexible Premiums

Most term plans offer flexible premiums, which allow you to adjust your payments depending on your budget.

Renewable Facility

Most term policies are renewable, which means that you can renew the policy at the end of the term without going through a medical examination.

Maturity Benefits

Some term policies offer a maturity benefit. A payout that you receive when the policy ends and you are still alive. This payout can cover expenses such as retirement costs or other needs.

Payout Option

You can choose whether you want the payout from your term policy to go to your beneficiaries in the event of your death, it could be a lump sum, fixed monthly installment, or an annual paid-up policy.


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To review the best plans, we at SMC have a team of highly experienced and qualified insurance experts. Our team works hard to help you save your money by providing you with the best insurance deals.

Term Insurance Riders and Their Benefits

There are many different riders available, and each one provides a different level of coverage. Some common term insurance riders include the following:

Critical Illness Rider

This rider provides coverage if you are diagnosed with a critical illness. This can help you pay for medical expenses and other costs associated with your illness.

Waiver of Premium Rider

This rider helps you to continue your policy coverage without paying a premium amount if you become disabled and cannot earn your living for a certain period.

Accidental Death Rider

This rider provides coverage in the event of the policyholder's accidental death. This helps the dependent family to pay for funeral expenses and other costs associated, such as hospital bills etc.

Permanent Disability Rider

This rider provides coverage in the event you become permanently disabled. This can help you pay for medical expenses and other costs associated with your disability.

Income Benefit Rider

This rider provides a monthly income benefit to you and your family if you cannot work due to an illness or injury.


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Factors that Affect Term Insurance Premium

It is advisable to gather complete information before buying a term plan as several factors will affect the cost of your insurance. Let us review them.

Age Factor

The older you are, the more expensive your term insurance policy will be. This is because the risk of death increases as you get older.

Life Stage Factor

If you are in poor health, your term insurance policy will be more expensive as the risk of death is higher.

Family History

If you have a family history of certain illness, the insurance provider will ask for a higher premium.

Smoking Factor

Smokers generally pay more for term life insurance than non-smokers, as they are considered to be at a higher risk of health.

Type of Occupation

If you have a hazardous occupation, such as being a firefighter or miner, your term insurance policy will be more expensive than if you have a desk job.

Location Factor

Your geographical location will affect the cost of your policy. For example, if you are in a flood or storm-prone area, your term insurance will come at an increased premium.

How to Reach the Right Term Plan

When purchasing a term policy, there are three stages to consider:

The first thing that every term insurance buyer should consider is the amount of coverage required to meet the family's future needs.

To discover more about this, you can use term insurance calculators accessible online.It helps to determine how much to invest each month as a premium, so the family's future needs are satisfied when you are not around.The most popular term policy calculation is sum around 15 times the insured person's annual salary, which may be calculated manually using the thumb rule of term policy calculation.According to this procedure, a person's life or term insurance should be 15 times their yearly wage.

So, if Mr.A's yearly income is Rs. 12 lakh, he will need term insurance worth 1.8 crore rupees.However, the second step is also included in this equation, which requires one to identify the necessary coverage from term life insurance for covering their other financial obligations, such as the policyholder's children higher education.

For example, Mr.A's total financial obligations are Rs.50 Lakh, and he wants a life or term insurance policy that provides him with coverage of Rs.2.3 Crore(rounded to the nearest lakh).

The simplest type of life insurance is a term insurance. Term insurance premiums are less expensive than other forms of life insurance. Nonetheless, to choose the proper term life insurance plan, one must look at 'term insurance comparisons.

Look for the right riders to add to your basic term plan. For example, several term insurance providers offer riders to cover major illnesses and incidents. With SMC Insurance, you can pick and choose the riders that meet your requirements precisely. It is beneficial to include a suitable rider for improved risk coverage and better protection for your family available at low rates.

An online term plan provides a lot of coverage to its policyholder.However, as a buyer, you are solely responsible for choosing the most cost- effective and appropriate term insurance plan without missing anything essential.

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Guide to Buy from the Best Term Insurance Provider

When picking the best term insurance policy, consider the following criteria before choosing your insurance provider:

Claim Settlement Ratio

The insurance provider's track record of term insurance claim settlement gives a transparent image of the firm to prospective policy purchasers. Every year, the Insurance Regulatory and Development Authority (IRDA) of India publishes a claim settlement ratio. A good claim settlement ratio year after year indicates that the insurer has been quick and successful in its claim resolution procedure.

Company Reliability

A firm's stability is critical in all business areas, especially in the life insurance field, where customers may or may not trust you. It is critical to verify a company's reputation before deciding on a particular term plan.

Premium Waiver Rider upon Diagnosis of Terminal Illness

Some insurance providers give this provision. If the policyholder becomes terminally ill, his or her future premiums for the term policy will be waived off.

Solvency Ratio

The solvency ratio measures a company's financial stability after calculating the amount of cash it has available to pay claims. According to IRDAI, each life insurance firm should maintain a solvency ratio of at least 1:5.

Enhanced Cover

Some insurance companies provide a premium term plan with an option to enhance the sum insured. Under this, policyholders may apply for better coverage in the events such as marriage, childbirth or while taking a home loan.

Claim Settlement Ratio + Term Insurance Death Claim Ratio

The claim settlement ratio is the percentage of death claims that an insurance company pays. This statistic is important to policyholders because it indicates how likely they will be able to receive a payout if they make a claim. The term insurance death claim ratio measures the same thing, but only for policies that cover death.Both statistics are important to consider when shopping for life insurance.

Waiting Period

Every insurance company stipulates a waiting period after the insured buys the policy and before filing the first claim. .This period can be from a few days to 2 years.


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  • Pro Tip: This policy can vary from company to company. So, it's important to compare the settlement ratios of several insurers before making a decision.

Term Insurance Exclusions and Conditions

When shopping for term life insurance, it's important to understand the exclusions and conditions of the policies. For example, a suicidal death is not covered under term insurance.

Let us analyze it in detail.

Conditions for a Term Plan Claim

Claim Conditions

When making a claim, several conditions must be met. These conditions ensure that policyholders are treated fairly and insurance companies are not taken advantage of conflict.For example, to make a death claim, the policyholder must have died within the coverage period. This ensures that the policy was in effect at the time of death.

Claim Documentation

The insurance company will need certain documentation to process a life insurance claim. This documentation ensures that the policyholder is entitled to a payout and that the claim is legitimate.

Some of the most common documents required include the policy itself, the death certificate, and the proof of ownership. The insurance company may also request proof of the beneficiary's identity.

By understanding what documents the insurance company will need, policyholders can ensure that they have everything ready when it comes time to file a claim. It can help to reduce the amount of stress associated with claim processing.

Exclusions of a Term Plan in India

The following events are not considered for a term insurance claim:

Suicidal Death

If the policyholder commits suicide within a year from buying policy, the insurance providers often reject the claim. Even after 1 year company verify the suicidal cases under the susceptibility clauses.

Murder

If the policyholder dies under suspicious circumstances such as a homicide or a murder, especially when the beneficiary is the prime suspect, the claim is often suspended.

Reckless Driving

If the policyholder meets an accident while driving recklessly, the insurance company will reject the claim.

Death Due to Erratic Lifestyle

If a policyholder dies due to bad lifestyle choices such as smoking, excessive drinking or drugs, no claim is provided. This includes HIV deaths, STD deaths, and other unhealthy lifestyle choices.

Death Due to Natural Calamities

Policyholder's death occurring due to an Act of God such as a flood, tsunami, earthquake etc., is not valid for an insurance claim.

Riots or Illegal Activities

Death that occurred while the policyholder was involved in unlawful activities is not entertained for claims.

Right Time to Buy Term Insurance Plan?

The best time to acquire an online term policy is as soon as possible. The earlier you buy, the more savings you will have as it helps you to get a better deal and pay lower premiums. If someone has neglected to invest in a term policy at an early stage of life, they must take action immediately. It's better to be safe than sorry.

Required Term Insurance Cover

Several criteria influence the number of terms insurance policies one should buy. To make life easier for insurance purchasers, we've outlined some of the variables below:

Current Income and Expenses

The individuals' current expenses and revenue determine how much life insurance premium and coverage they can put toward an online term insurance plan.

Current and Future Liabilities and Assets

While deciding the term insurance policy's sum assured amount, it's critical to consider the loan payments, such as home loans and personal loans, and EMIs selected by term insurance buyers.A term plan's liabilities and monthly assets can include investments such as fixed deposits, ELSS, ULIPs, gold, capital market, and other items. It's critical if not consider future EMI and investments and adjust the term plan's coverage amount accordingly.

Future Financial Goal for Family and Self

Keep in mind that your long-term and short-term financial goals must always be set ahead of time. The insurance buyer should figure out how much premium they can afford to pay towards the policy and how much coverage they require to protect their loved ones and family's financial stability over the long term.

Make Use of the Human Life Value Calculator

Various insurance companies provide human life value calculators as term insurance options. It aids policy buyers in estimating the amount of money they will need for a term insurance plan based on their desired duration.

The life value calculator takes into account the value of moneyin the future, when computing the sum assured amount. Simply enter certain information such as your current age, expenditures, present annual income, and projected future inflation rate to obtain the amount assured that you should choose.


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Term Premium Payment Options

Premiums for term insurance are an important element in your decision to purchase the plan. You should always select a plan based on the premium payment option most suited to you.

Here are a few points to consider:

Regular Premium Payment

You must pay premiums regularly throughout the whole policy period. You may choose the option of paying premium yearly/ half-yearly/ or on monthly basis.

Limited Pay

The policyholder can make recurring payments for a specific length of time, such as three months. In this case, the premium payment period is shorter than the policy term.

Single Pay

You need to pay the complete premium amount at once when you enroll for the policy.

If you're looking for the best term insurance plans, it's important to compare the different policies available. Some factors to consider include the premiums, the cover amount, and the exclusions and inclusions

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Term Insurance Premium Calculator

The term insurance premium calculator allows you to modify the amount as needed, based on your assumptions/ predictions about how much fund your family would require if you die. The following are some of the main advantages of using a term insurance premium calculator:

01

The term insurance plan calculator cuts downtime since you won't have to submit any of the hard copies to obtain term insurance premium quotations. Decide the type of term insurance policy that suits your needs, and purchase a term plan online with ease.

02

The term insurance plan calculator compares several term insurance premium quotations supplied by numerous Indian insurance firms. Comparing term insurance plans will help you find the best plan for your needs. It makes you sure that the plan has enough coverage to protect your loved ones if something happens to you. Another thing to consider is the cost of the plan that fits into your budget.

03

Buying term insurance online with the help of a premium calculator is now a popular choice as you can avail several discounts and offers on term insurance premiums.

Related Terms to Term Insurance

Depending upon the type of term insurance contract you select, the death benefit may stay constant throughout the plan's duration or may go down or up. Different options for death benefit payout are available, including a lump sum payment. A lump-sum payment with an annuity that might be monthly, quarterly, or yearly, as well as simple annuities that are spread over the agreed number of years.

An insurance company's claim settlement ratio is the proportion of claims closed against the total number of claims filed. The greater a company's claim settlement ratio, the more reliable it is.

It's a pure term insurance policy in which the beneficiary receives just the death benefit if the insured dies before the policy ends.

The insurance premium is the amount paid by the policyholder to the insurance firm on a yearly, half-yearly, quarterly, or monthly basis. The premium paid by the policyholder determines the term insurance coverage of the policy.

How SMC Helps in Comparing and Buying the Best Term Insurance Plan Online

Apart from the obvious reason that term insurance is one of the most affordable forms of life insurance and provides a large sum insured for the nominees of the policyholder, here are a few more reasons to buy a term policy online through SMC Insurance.

Affordability

Customers can purchase an online term policy straight from SMC's website. Online purchasing of the plan eliminates paperwork and processing costs, which are automatically lower as everything is completed online. Thus, buying an online term policy is more lucrative than purchasing an offline term insurance coverage.

Comparison

One of the advantages of buying a term insurance policy online from an aggregator platform such as SMC is that it enables consumers to compare and buy a plan based on their requirements and suitability. It saves the time and hassle to go through multiple insurance websites and surf through the premiums and benefits.

Reliability

The process of purchasing a policy online is more trustworthy. It allows consumers to be more updatedon latest information. By simply visiting the SMC website, policy purchasers may learn about the plan's features, terms, and conditions in greater depth.

Easy Access

The online term insurance policy at SMC is available to the public in a similar way as traditional term insurance policies. The ability to access and understand the terms of the insurance is conveniently available at a single interface. Policyholders can also check and follow the status of their policy from time to time through a single platform without getting in touch with number of mediocre agents.


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Term Insurance FAQs

Insurance would be much easier for you after browsing the list below.

Yes, buying riders with term insurance is a smart idea because it adds the extra benefits and cover to term insurance plan. You can select the type of rider depending upon your risk, needs and taste. You should supplement your life coverage with a suitable rider to obtain complete protection after assessing the many hazards that might impact your life.

Although selecting a rider is dependent on factors such as risk, needs, and preferences, “the waiver of premium” rider is one of the finest alternatives. If insurance premiums are not paid due to sickness or exceptional situations, the rider protects policyholders from policy lapses.

The majority of the riders are reasonably cheap. A rider is around 5% to 10% of the total premium you pay for your basic coverage. The amount of all the riders in your base term plan cannot exceed 30% of your base premium, but there is no limit to how many riders you may include in your plan.

Extra Coverage , Cost and time effective , Complete customization , Tax - saving purposes ,More than one benefits from a single policy

Yes. If the policyholder makes declarations such as newly formed smoking habits, a change in the nature of their job or a newly acquired critical disease, the insurance companies may increase the premium cost.

NRIs with valid citizenship of India are eligible to buy term plans with the same benefits given to the Indian residents.

Yes. The proceeds and benefits are given to the nominees as mentioned in the policy, even if the policyholder’s death takes place outside India.

Yes, you can. An individual can take term plans from multiple companies based on the features and benefits they offer. It is completely legal. However, the individual must be ready to bear multiple premiums to be paid against multiple policies.