TERM INSURANCE

TERM INSURANCE

When it comes to our family’s happiness, we’re always looking to go the extra mile to ensure that no matter what, all their dreams come true. Life insurance is yet another way to ensure peace of mind for ourselves, and absolute security for our loved ones, even when we’re not around. To secure your family’s future and ensure they are financially independent, consider Term Plans.

 

What is a Term Insurance Plan?

A term plan is the most basic form of life insurance. It offers a high cover amount at a nominal premium that is, you, as the ‘insured’ or ‘life assured’ pay a small amount as ‘premium’ for a certain period or ‘tenure’ and, in case something unfortunate occurs, your family or ‘nominee’ is given a large lump sum amount called the ‘sum assured’ or ‘cover’, so there is no compromise on lifestyle or any worry about finances. You can also choose to have your loved ones receive the pay-out in the form of monthly pay-outs.

The term of the policy is fixed, and in the eventuality of death during this tenure, your beneficiaries will receive a pre-determined amount.

Why term insurance?

When you consider term insurance, think of it as an investment for the future, especially for the forthcoming needs of your family. They will be kept safe and sheltered under the wings of the term insurance plan.

 
 

Here’s a peek at the benefits of owning a term insurance plan:

 
 
01. Affordability

Just as with other things in life, affordability plays a key role in term insurance as well. Keeping this in mind, term insurance plans are designed to be reasonably priced – a combination of affordability with simplicity. Under these term insurance plans, a life cover for a certain sum termed as ‘sum assured’ is offered for a specified period called ‘policy term’. If the insured person dies during the term of the policy, the sum assured is paid to the nominee. To claim the money, the nominee must pay a small amount as a death claim. If the insured survives the term of the policy, there is no benefit payable. Additionally, the premium payments aren’t as high compared to other life insurance policies.

A term insurance plan is a form of life insurance that aims at protecting the future of your family. It is a stepping stone in the path of safeguarding your family’s future so that they can live without financial insecurities.

 
 
02. Easy to buy

Advancements in technology and the possibility of customising the policy as per your requirements has made buying term insurance plans easier than ever. You can search for and pick the term insurance plan you want, and it’s yours almost instantly! Unlike other life insurance policies, it’s very easy to buy term insurance plans. Since their basic framework doesn’t involve the investment of money, you only need to pay attention to certain aspects such as your financial goals, the sum assured you want to attain, your debts, your standard of living, etc. For assistance, you can use the Aegon Life online calculator as well.

Further, instead of stepping out of your home, you can now purchase term insurance plans online with a few clicks, as per your convenience. This is a hassle-free and quick process, and you can also make use of the step-by-step guide in this document. Online purchases are handled directly by the insurers, which eliminates mediators. This allows you to avail discounts too!

 
 
03. Claim pay-outs can be staggered

Most term insurance plans offer a lump sum amount in the event of the death of the insured. As the insured, if you feel that your family members might misuse the lump sum amount, you have the option to stagger the pay-outs. You can receive half the amount as a lump sum and the remainder monthly. This is beneficial as the partial amount can be used for emergencies and the monthly income can be used for monthly expenses; plus, there are other options to be explored as well. This decision can be made at the time of buying a term insurance plan. Hence, as the insured, think of the future of your family and plan accordingly.

 
 
04. Flexibility in paying premiums

When you choose a term insurance plan, you have the option to pay premiums on a monthly, quarterly, semi-annual, or annual basis. In addition to regular payment of premiums, there are also term insurance plans that offer single pay, or limited pay premium option. For the person who is paying the premium, such flexibilities offer convenience plus the ability to pay premium amounts that are in keeping with their budget.

 
 
05. Adjustments to the term insurance policy

The best part of owning a term insurance policy is that it adjusts according to the stage of your life. Let’s explain this with an example. Say, a bachelor purchases a term insurance plan; his cover will be about Rs 25 lakh. However, for a married person the cover will need to be Rs 50 lakh or more, and even higher for those who are married with children. Term insurance plans allow you to make amendments to your policy any time during their duration.

 
 
06. Additional covers with the basic plan

You can add riders to your basic term insurance plan for another layer of protection. Few key riders available with term insurance plan include accidental death rider, disability rider, critical illness rider, income benefit rider, waiver of premium rider, etc. All these riders have their own positive attributes that add value to your policy. A single rider is great but a combination of riders will make your policy an all-inclusive, well-rounded one. Ultimately, it’s your loved ones that will benefit.

 
 
07. Coverage till the age of 75

When you choose a term insurance plan with Aegon Life, you get coverage until the age of 75.

 
 
08. Tax benefits

You can avail tax benefits under section 80C of the Income Tax Act, 1961, for the premium paid and sum assured of your term insurance plan.

 
 
09. Protection against liabilities

During our lifetime, we indulge in procuring assets for ourselves – we buy a car, house, etc. Over and above this, there are many liabilities that we take on in the form of debts, credit, etc. Typically, these liabilities are not a small amount that can be paid off in a few months; repayment may take several years. In case a mishap occurs to you – accident, disability, or demise – the term insurance plan comes to you and your family’s rescue. It replaces your financial role in the family, so that your family isn’t burdened with huge responsibilities.

 
 
10. A blessing for young families

Term insurance plans can be a godsend for young couples who must cope with various costs such as mortgages, car loan, care of new-borns, etc., while also keeping in mind their retirement expenses. In such cases, an affordable term insurance plan can safeguard a young family. Likewise, older families nearing retirement can live out their golden years peacefully without depending on anyone financially.

 

Key features of a term insurance plan

The concept of term insurance is to provide coverage for a family in times of duress, especially when the income generator is absent. The primary intention is to keep the family stable and happy, and ensure they can meet basic expenses and fulfil their dreams. Furthermore, as the head of the household, you can lead a peaceful life knowing your family’s future is secure, even in your absence.

 

Here are some more key features that make term insurance plans stand out:

Flexible terms

Typically, the term of a policy is anywhere between 5 and 25 years, but there are also term insurance plans available for your whole life. This extended duration lets you select a period best suited for you. If you need assistance, this document has an entire section on what term will work best for you. Along with reading that section, keep in mind the needs of your family and the future, and pick a period that’s most suitable. Experts say the best plan would be a long-term term insurance plan as the premium amount gets locked-in; for the remainder of the term you can continue to pay the same premium.

 
 
Choice of a plan

When it comes to a term insurance policy, a lot of options are available. From picking a term insurance policy that only supports a single life – that of the sole earner – to a joint life policy that provides coverage for both husband and wife, the choice is yours. Every individual or family will have their own specific needs, their own ways of living. Consider all the possible factors before picking a term insurance plan.

 
 
Age of entry

Typically, the term of a policy is anywhere between 5 and 25 years, but there are also term insurance plans available for your whole life. This extended duration lets you select a period best suited for you. If you need assistance, this document has an entire section on what term will work best for you. Along with reading that section, keep in mind the needs of your family and the future, and pick a period that’s most suitable. Experts say the best plan would be a long-term term insurance plan as the premium amount gets locked-in; for the remainder of the term you can continue to pay the same premium.

 
 
Maturity age

A good term insurance plan is one that covers the insured for most of their life, typically until the age of 75.

 
 
Changes in premium

A prominent feature of term insurance is that based on several aspects – earning, disbursals, tenancy, mortality, etc. – you can decrease or increase the premium amount up to a pre-specified level.

 
 
Renewable in nature

Whether you initially opted for a 20-year policy or a 50-year policy, you can renew your term insurance policy at any time. This lets you continue to enjoy the benefits of the initial term insurance plan you opted for, including the same rate and premium! In the long run this proves to be a good deal.

 
 
Tax benefits

A component that instantly entices consumers toward term insurance is the benefit they can avail of in terms of tax savings. Although the premiums paid and the sum assured for a term insurance policy are exempt from tax under section 80C of the Income Tax Act, 1961; experts advise that this shouldn’t be the sole reason for investing in term insurance. A detailed section about the same is included in this document for your reference.

 
 
Death benefit

In case of the demise of the insured, the specified sum assured is allocated to the nominated person. Since there are various term insurance plans, this benefit can be a decreased amount, increased amount, or static, depending on the chosen plan. Additionally, this sum assured can be availed of in different ways – as a lump sum, a partial lump sum amount plus a fixed amount on a monthly or annual basis, quarterly basis, yearly basis, or annuities extended over several years.

 
 
Survival benefits

If you are looking for maturity or survival benefits, ignore term insurance plans and look at TROP (Term Return of Premium) plans instead. Term insurance plans do not come with maturity or survival benefits.

 
 
Additional rider benefit

An often-overlooked aspect, riders are a great addition to your basic term insurance plan. There is a section in this document on term insurance riders. As an additional feature, riders shouldn’t be overlooked because they give you additional coverage for a much lower amount. Term insurance riders cover accidental death, disability, critical illness, income benefit, waiver of premium, etc. Each is unique. For example, if your family has a history of critical illness, including the relevant rider in your term insurance plan is a good idea. You never know if a critical illness will affect you or not, so it’s always better to be safe than sorry!

 
 

TERM INSURANCE PLANS BY AEGON LIFE

At Aegon, we understand your needs. We recognise that every family is different and so we have created three different term insurance plans to cater to your needs. Explore our term plans to know what they hold for you.

 

01. iTERM INSURANCE PLAN

iTerm Insurance plan is an online plan. It enables you to secure your family until 100 years of age. It also allows you to increase your life cover as per the life stage you are in and the expanding needs of your family. You get the flexibility to pay the premium either as lump sum or as regular premiums. The plan also offers 25% of the sum assured on the diagnosis of any terminal illness and all future premiums, thereafter, are waived off. You can opt for additional coverage against accidental death, critical illness, women-specific critical illness and disability. For example - if you are 35 years old, non-smoker and want to insure yourself against a cover amount of Rs. 1,00,00,000, you will need to pay a monthly premium of only Rs. 1566 till you are 100 years of age.

 
 
 

02. iTERM PLUS INSURANCE PLAN

iTerm Plus Insurance Plan provides you with a cushion against adversities such as death, illnesses and disability due to accidents. This plan provides coverage until 80 years of age with an option to increase your life cover at various life milestones. While you don't get any money on making it through with this plan, it offers comprehensive and adequate protection to your loved ones, in your absence. There are four different plan options under this:

 
 
Life Plan Benefit

You can opt for this plan if you want an additional benefit against accidental death along with life coverage. You get the flexibility to choose the pay-out amounts for both these covers. For example - you are 38 years old, non-smoker and want to cover yourself for a death benefit of Rs. 25,00,000 till 70 years of age. This plan will allow you an additional accidental death benefit of Rs. 10,00,000 at a monthly premium of only Rs. 507.

Life Plus Benefit

This is a comprehensive plan that will take care of your family if anything were to happen to you. You can insure yourself against loss of life, accidental death, terminal illness and permanent disability with this policy. In case of permanent disability due to an accident, the policy will continue to provide life cover till the end of the term, and all future payments will be waived off. In the example given above, you need to pay a monthly premium of only Rs. 515 if you go ahead with this plan. If you get diagnosed with a terminal illness, you get the benefit to receive the entire amount of Rs. 25,00,000 upon detection.

 
Life & Health Benefit

You can opt for this plan if you want an additional benefit against accidental death along with life coverage. You get the flexibility to choose the pay-out amounts for both these covers. For example - you are 38 years old, non-smoker and want to cover yourself for a death benefit of Rs. 25,00,000 till 70 years of age. This plan will allow you an additional accidental death benefit of Rs. 10,00,000 at a monthly premium of only Rs. 507.

Life & Health Plus Plan

This is a comprehensive plan that will take care of your family if anything were to happen to you. You can insure yourself against loss of life, accidental death, terminal illness and permanent disability with this policy. In case of permanent disability due to an accident, the policy will continue to provide life cover till the end of the term, and all future payments will be waived off. In the example given above, you need to pay a monthly premium of only Rs. 515 if you go ahead with this plan. If you get diagnosed with a terminal illness, you get the benefit to receive the entire amount of Rs. 25,00,000 upon detection.

 
 
 

03. iRETURN INSURANCE PLAN

This online plan lets you access your policy details anytime. It covers you against death and terminal illness. You also get an option of additional covers against accidents, critical illness and disability. The distinguishing feature of this plan is that it returns all the premiums paid if you survive the tenure of this plan.

 
 

04. TERM INSURANCE PLAN

If you want your family to maintain the same lifestyle in your absence, this plan is for you.

 
 

05. EASY PROTECT INSURANCE PLAN

If you are looking for a plan that will enable your family to sustain the same lifestyle even in your absence, this plan is for you.

 
 

06. iTERM FOREVER INSURANCE PLAN

A Non-Linked Non-Participating Whole of Life Term Insurance Plan.

 

WHAT TO CONSIDER BEFORE YOU CHOOSE A TERM PLAN

To choose a term best suited for you, consider factors such as

 
The reputation of the insurer including a thorough examination of the claim settlement ratio
 
The amount of cover you need
 
Your comfort with the terms and conditions of premium payment such as amount and frequency
 
01. COVER AMOUNT

If some of your colleagues have opted for Rs. 1 Crore cover, should you opt for the same amount too? Though there isn’t any specific formula to figure out what should be the right value of your cover, many analysts offer some basic guidelines to be used as a rule of thumb

AGE BRACKETCOVER
25 TO 35 YEARS15-18 times the current annual income, after considering the debts/outstanding loans
35 TO 45 YEARS10-15 times the current annual income, after considering the debts/outstanding loans
45 TO 55 YEARS5-8 times the current annual income, after considering the debts/outstanding loans

While this is only a generic method, you can also find some detailed methodologies to figure out the right value of your cover.

 
 
02. TERM INSURANCE PREMIUM

Based on your age and lifestyle, you would need to pay small premium amounts to build this life insurance cover. For example - If you are 32 years old and a non-smoker, you would have to pay a monthly premium of only Rs. 388 for a death benefit of Rs. 50,00,000. For a cover of Rs. 1 crore, this amount would increase to Rs. 809 per month. The premium for a term plan also differs from insurer to insurer. As time passes, the premium for the same sum assured also rises. You also need to look at how often you want to pay the premium, be it monthly, yearly or other.

Want to get a quote for a policy for yourself? Click here to use the Aegon Life Insurance Calculator

 
 
03. ELIGIBILITY CRITERIA

The eligibility criteria for term plan ranges depending on the insurance company. However, the standard minimum age of entry is 18 years while the maximum age limit to apply for a tem plan is 65 years.

 
 
04. PAYOUT OPTIONS

As the insured, you can decide the pay-out of the sum assured to your nominee depending on the type of option you choose at the time of purchase. You can opt for a lump sum or a monthly income pay-out, based on your preferences.

 

WHAT MAKES TERM PLANS SIGNIFICANT?

As a pure protection plan, term plans are not considered as investment, as the premiums are used to cover the risk. This means it cannot be viewed as an investment. Compared to other life insurance options, term plans are much more economical. Thus, as the life assured you can opt for higher life coverage at lower premiums as compared to an identical endowment plan.

 

How to choose a term insurance plan that suits your needs

Meet Mr. Sandeep Kumar. He is a 32-year old architect working with a large construction company. His job requires him to travel extensively. Back at home, Sandeep’s family consists of his wife Nitya and two kids. Sandeep has provided well for his family; a comfortable house and a large car. However, Sandeep is aware that life can become uncertain. An untoward incident and his well-constructed world could shatter anytime.

Now, he is servicing a home loan and a personal loan. But if anything was to happen to him, the financial responsibilities would fall on his family. To prevent hard times from falling on his family, Sandeep put forth in motion, a well-thought-of plan of action.

He chose a term insurance plan. As we know, a term insurance plan is a type of life insurance that provides coverage for a specific period. In case the insured person dies during the policy tenure, a death benefit is paid out to the nominee. Ideally, it is best to take a term insurance policy as early as possible (i.e. early twenties). So, let’s see how you can choose a policy that suits you at different stages of life.

 

Mid-20s

Imagine the following scenario

You just graduated from college and got recruited by a major company directly through campus placements. You have finally achieved financial independence and the whole world has opened to you. You have many goals and aspirations and life insurance may be the last thing on your mind at this stage in life.

Most people consider life insurance to be for middle-aged people with families and responsibilities. This couldn’t be farther from the truth. This is perhaps the best time to start planning.

Taking out a life insurance policy in your twenties has many benefits. For one, you benefit from lower premiums. Moreover, in the long term, it can help you save a lot of money. This is because, many insurance companies charge higher rates (sometimes double) as people grow older.

You can also avoid putting additional pressure on your family members. For example, you may be servicing your student loan with your regular monthly salary. But in case something happened to you, your parents (or your relatives who have co-signed your educational loan) would become responsible for the huge debt. A term insurance policy that covers your outstanding loans would help you protect your family from unwanted financial burdens.

And then there’s the question of-What if? Remember when you stepped out onto the road without taking an umbrella and it rained? Your brand-new shoes were completely soaked and you asked yourself: what if I had carried my umbrella? Similarly, with the future so uncertain, you can avoid the question of ‘what if’ with a term insurance policy.

Age 30-40

Thirties: an age when everyone expects you to become more mature and responsible

At this stage, you are at a stable job. The pay is good and your future looks bright. Your boss is even hinting at a promotion. On the personal front too, things are picking up.

You may have started a family or you may be planning to do so soon. You regularly pay the monthly loan payments on the house and you are even thinking of buying a new car. In other words, you have become more mature and responsible!

But with everything going on, there is always a risk: the risk of demise. In case anything was to happen to you, it could impact your family in a big way.

No amount of money can address the personal loss of a loved one. But with a term insurance policy, you can at least take care of financial aspects. For example, your family might be used to a certain lifestyle. And the best part of starting early is that it is extremely cheap. To put in monetary terms, by paying as little as 2% of your annual income, you could get a cover of 20% of your annual income! Think about that for a second.

AGE 40-45

If you have hit your 40th year milestone without taking a life insurance policy, don’t despair. It is not too late to take out a term policy. If you are the sole breadwinner, it can be tough for your family to meet their monthly expenses in your absence. Paying day-to-day bills and taking care of regular expenses can become difficult. However, by taking out a term insurance policy, you can ensure your family maintains their current lifestyle.

And if you have already taken a life insurance policy, this might be a good time to review it.

As you get older, lifestyle and expenses also increase. This means your life insurance policy may no longer offer you the required coverage (ideally, your term policy should offer coverage equal to 5-10 times your annual salary).

A life insurance policy can be used to pay:
  1. Debts (home loans, car loans, personal loans)
  2. Children’s higher education
  3. Unpaid medical bills
  4. Living expenses of your family

Given the growing needs, such as family size, current income and outstanding debts, you might want to review your insurance coverage.

AGE 50-60

Fifty is a big milestone in anyone’s life. And if haven’t purchased life insurance now, you might even wonder why you need one at this stage.

This sounds like a fine argument but, this is the age a term insurance policy becomes essential. For instance, if you are the sole provider, you may want to pass on financial benefits to your spouse or your children after you pass away.

To get a good term policy at this age, you may need to do a few things:
  1. Identify the time span for which you would require an insurance policy
  2. Identify any pre-existing conditions you have that could affect your policy approval

Many companies have an age limit for the term insurance policies they offer. This can be around 55-60 years. If you have exceeded the age limit, you may not be able to obtain a term policy. However, it might be good to remember that the Aegon Life iTerm Life Insurance Plan allows entry even at the age of 65. Additionally, it provides cover up to 100 years.

With regards to health conditions, different insurers have different criteria to weigh health conditions. This means if you do have any pre-existing conditions like diabetes or a heart illness, you can look at different insurance providers to identify which company offers the best deal for pre-existing issues. This way, you can minimize expenses on your term policy.

Closing thoughts

‘Roti, kapda aur makaan’- For a long time, these were the three essentials for a human being. But today, it is not the case anymore. Term insurance is a must for everyone regardless of age and gender. If you don’t have a term policy just yet, now is the time to get one.

 

STEPWISE GUIDE TO BUY TERM INSURANCE PLANS ONLINE

Understand how you can buy term insurance online and ensure a solid future for your loved ones:

 
 
Step 1: Check the sum assured

Figure out how much money your family would need as a safety net in case your source of income was no longer available to them. The policy amount should be at least 15-20 times your current annual income.

 
 
Step 2: Add your personal details

You will be required to enter your name, date of birth, your gender, your smoking/non-smoking status, your city of residence, your annual income, your phone number and your email. At a later stage, you may also be asked to fill in details about your education and work.

This information allows the insurer to assess various factors before disclosing the premium amount. You will most likely be given the option to see a free quote of the premium you would need to pay.

 
 
Step 3: Select the riders of your choice

Riders are additional benefits you can get at a nominal extra cost to ensure your family in secured under various situations and not just demise. While you might be tempted to choose the policy with the lowest premium, make sure you are covering your bases in terms of different unplanned scenarios. A little extra money could provide you with accident cover, which would cover the situation of your meeting with a road accident. Additionally, if your family has a history of critical illnesses, make sure you get a term insurance plan that covers them as health insurances often don’t cover the high medical costs of terminal illnesses such as cancer.

 
 
Step 4: Read all premium payment terms

Depending on the policy term you choose, you can also choose how frequently you want to pay the premium- Monthly (12 times a year), Half yearly (2 times a year), Yearly (once a year) or in one go i.e. as a lump sum.

 
 
 
Step 5: Go through pay-out termse

Aegon Life Insurance plans offer two different pay-out options. One, where your family receives a lump sum amount upon your death and the other, where your family receives a part of the amount as lump sum and the rest is received as a regular monthly income. This might be a difficult choice to make but think about how your family will need to use the money. You would be required to choose what percentage of the amount is given to your nominees as lump sum and how much is given as monthly pay outs. When choosing an insurance plan, make sure it offers this flexibility based on your family’s needs. In case you choose the option where your family receives the money as a regular monthly income, make sure it is not taxable.

 
 
Step 6: Remember to add nominee details

You would be required to fill in the name, age, gender and residential statuses of all your nominees, including your relationship with them.

 
 
 
Step 7: Add your medical and lifestyle details

Certain insurance providers might also require you to get a medical check-up done at specific centres, which will then send across the report directly to the insurance company. Alternatively, more modern insurers like Aegon have a simple procedure to enter health-related information online, as shown below.

You may also be asked to fill in information about past health issues so that your insurer can understand whether you have ever been Diagnosed, Tested, Treated OR Experienced of any conditions related to your body.

 
 
Step 8: Share proof of your identity

You would be required to share some combination of: age proof, address proof and Identity proof + your bank details.

 
 
Step 9: Read final decision and issue of policy

Based on the documents uploaded and the medical exam, the insurance provider will decide whether they will issue the policy or not. Based on that decision, they will send the policy documents to you.

 
 

CALCULATING YOUR TERM INSURANCE PREMIUM

Life insurance premium is calculated through a process known as underwriting. The process employs the use of many statistical and mathematical calculations around the details of the person to be insured. Some of the major factors considered while calculating premium are -

 

AGE

 
 

Young people are at a lower risk of getting life-threatening diseases. A younger person will also end up paying more number of premiums (since the tenure/term of their policy would be longer) than an older person who is likely to make a claim much sooner.

 

Gender

 
 

There have been numerous studies that say women tend to live longer than men. Hence, women have a higher probability of paying more number of premiums and thus their premium amounts are comparatively lower.

 

Medical history of the family

 
 

This is an important factor in calculating the premium. A person whose family has a history of ailments such as heart attack or cancer, has increased chances of contracting these illnesses, which is why more instances of such diseases increase premiums.

 

Smoking and drinking habits

 
 

This is one of the foremost considerations for every employer because there are a lot of health-related concerns that these habits are known to cause.

 

Profession

 
 

If you have a job in industries such as transport, shipping, mining oil, gas, etc. your life is perceived to be at higher risk of accidents. Thus, the premium for you in this case would be higher as compared to a professional with a desk job.

 

Duration/policy term

 
 

If the policy term is longer, you’ll end up paying a higher premium as the insurance company will have to cover your life for longer – meaning higher risk. Thus, a small term will have a lower premium as compared to a longer term.

 

Personal health

 
 

If you have any known illnesses or common diseases like obesity, the underwriters would scale you on a higher risk. Obesity, for example, is well known to elevate the chances of blood pressure and heart problems, even stroke. Therefore, in this case, your premium would be a little higher than that of a person who is relatively fit.

 

ONLINE TERM INSURANCE PREMIUM CALCULATORS

To know the exact amount of premium that would be applicable to your term plan, you can use our term insurance premium calculator. This calculator is highly sophisticated and involves state of the art algorithms to give you exact results. However, premium calculators do require some basic input from users to be able to provide premium estimates. Click here to check the term life insurance premium calculator by Aegon Life.

 

Term insurance riders: must-have add-ons

 

What are term insurance riders?

A rider is an add-on or a paid feature to your base term plan. Every rider aims to upgrade the scope of your basic policy coverage. But what benefits do riders bring? Are they worth the additional money? Do they truly provide complementary coverage? If you are staring at a list of riders and wondering whether to consider them, let’s look at some essential add-on benefits that can enhance your term plan and help you decide.

01. Accidental death rider

Indian roads witnessed more than 1.46 lakh accidents during the year 2017. This is a number that cannot be ignored. When you are on the road, you might take the best precautions possible but there is not much you can do if the other driver makes a mistake. That’s why many people include an accidental death benefit rider in their term policy.

This means that if an insured person passes away due to an accident, the accidental death rider pays a sum above and beyond the basic sum assured to the nominee.

 
 
02. Disability rider

A disability rider is a valuable add-on that provides financial protection if a disability incurs. Devastating accidents can sometimes lead to partial or permanent disability. This can take a huge toll on emotional and financial resources. In the face of an unfortunate incident, continuing a regular day job could seem impossible thus affecting your income.

Your family’s way of life need not weaken if you cannot work due to disability. For this reason, a disability rider is valuable. This rider offers a certain amount as a percentage of the sum assured for a period of 5-10 years. The disability rider can act as an alternative source of income in the face of total or partial disability caused by an accident.

 
 
03. Critical illness benefit rider

Finding out that a cancer test has returned positive can come as a great shock. And further realising you don’t have proper insurance coverage can be a double blow. Critical illness like heart attack, cancer and kidney failure are not only life threatening, they can also be extremely expensive. At such times, having a critical illness rider can offer financial help to meet crucial expenses.

If you have a critical illness rider, you are provided with a lump sum amount. This is subject to the condition that a critical illness is pre-specified and covered by the policy. It is important to note that some policies reduce your overall coverage based on the amount you are paid. That’s why, it is important to analyse your policy document carefully and find out benefits you can get with this rider.

 
 
04. Income benefit rider

As the name suggests, an income benefit rider ensures your family receives a steady flow of income even in your absence. The income received supplements the sum assured provided to your beneficiaries/nominees. For example, by opting for the income benefit rider, your family would receive an additional 10% of the sum assured for a certain number of years. The basic purpose of the rider is to generate income for your family. The time for this rider can range anywhere from 5-10 years.

 
 
05. Waiver of premium rider

When you become a term insurance policy holder, you want to ensure all your payments are made on time. But what if you cannot continue with regular payments due to a disability?

Generally, the insurance company cancels the term policy. For someone who has made the premium payments regularly on time, this can come as a serious blow. However, there is a way to avoid this situation. In case of a disability, a ‘waiver of premium rider’ ensures all your future premiums get waived off. It is a low-cost option to keep your policy active even if you are unable to make your payments.

 

“Do you Need Riders?”

Now that you know how term insurance riders work, does it make sense for you to buy them? Indeed. Enabling paid features can undeniably enhance your ordinary, standard term plan.

If you think a specific rider/s match your needs and are vital for the future, do not hesitate to opt for it. You can know more by comparing and reading on the various riders in your policy to assess your requirement. Riders are critical in preventing a troublesome financial situation.

Think About It!

A term insurance policy is vitally beneficial to a policyholder’s family in case of an eventuality. A thorough understand of the list of riders available with your insurance company can help you identify one most suitable for you and your family. In the end, it is all about more security for your loved ones in an uncertain world.

 
 

TERM INSURANCE PLANS ARE MORE THAN TAX SAVING INSTRUMENTS

A well-known benefit of term insurance plans is availing tax benefits. According to Section 80C of the Income Tax Act of 1961, the sum assured and the premium payments are exempted from tax. In a financial year, a deduction of Rs. 1.5 lakhs can be claimed for the premiums that you paid for your spouse, children and yourself.

However, when you’re buying an insurance plan, tax benefit shouldn’t be the only aspect that you favour.

 

WHY?

If you do not understand the financial needs of your family- both for the present and the future- and look at term insurance with a narrow view, you might not choose the right plan or cover. Buying an insurance policy in the eleventh hour just to avail tax benefits, without taking into consideration your insurance needs will force you to not only misconstrue your insurance needs but also disregard getting a risk cover.

Here’s a look at all the reasons you need term insurance:

 
Competitive pricing

As protection is available for a predetermined amount of time, term plans are more reasonably priced then other life insurance plans. In term plans, if you outlive the policy, you do not get a pay-out, whereas for other life insurance covers, you get paid. Hence, the premiums are lower for term life policies and it comes with a variety of choices.

 
 
Simplicity

Term insurance plans are simple and easy to understand which makes it straightforward for people to compare and select a plan that appeals to them. In short, three primary decisions need to be made – preferred company, coverage amount and tenure of the policy. As opposed to complex plans which combine savings and insurance or investment and insurance, term plans are straight forward. All you need to do is pick a policy, pay the premium and get coverage for the term you have chosen.

 
 
Flexibility

You can pick between an assortment of policies with a range of features. A policy can have coverage of one year with an annual renewable term or you can have a short-term plan for five years. Policies are available in 10, 15, 20, 30, etc. year terms depending on the company. Furthermore, term policies are convertible and renewable. The former permits you to change your term life policy into another life insurance policy during the term, if it makes sense and the latter ensure that you can renew your policy when it ends with ease. This can be an invaluable option if you medically do not qualify for life insurance or develop health problems.

 
 
Low premiums

Term insurance plans have lower premiums than their counterparts. For example, a 30-year-old person can buy a 20-year policy for a sum assured of Rs. 10 lakhs by paying a premium of Rs. 3000 annually. Plus, policies offered by Aegon Life are value for money which is both comprehensive and cost-effective. While the premium is low, the coverage is high. This is one of the biggest advantages of term plans.

 
 
Longer coverage

Aegon’s term life plan covers individuals till the age of 80, whereas most other plans only provide coverage until the age of 70.

 
 
 
Flexible death benefits

Term life policies allow flexibility in choosing the mode of pay-out of the death benefit. The options are a lump sum payment, a specific fixed monthly income or a combination of the both the options.

 
 
Secures your family’s future

If you are the breadwinner of your family, then term insurance is perfect for you. In the unlikely event that something happens to you, a term insurance policy will compensate the sum assured to your loved ones. Thus, in your absence, your near and dear ones can live stress-free!

 
 
 
Safeguard against liabilities

Buying a house, a car, etc. are only some of the liabilities we take on in our lives. Most often, liabilities are paid off over a period of time and if anything is to happen to you during that time, your family has to shoulder the responsibility of replaying the amount. Term insurance will prove fruitful in such a scenario as term insurance is designed for your dependents to cope with financial difficulties.

 
 
Boon for young families

As term insurance only covers a specific period and doesn’t build cash value, it’s typically not as expensive as other life insurance plans and best suited for young families. Financial stress is common among young families as they bear multiple costs like caring for young children, mortgages, automobile loan, retirement expenses, etc. Hence, without burning a hole in one’s pocket, term insurance provides peace of mind.

 

Term insurance is an affordable and simple way to safeguard your family’s financial health.

 

WHAT SHOULD BE THE TENURE OF A TERM PLAN?

Understand how you can buy term insurance online and ensure a solid future for your loved ones:

01. Make a note of your financial commitments

Start by making a list of the financial commitments that you have – the cost of your children’s education to their marriage, your loans, etc. To make ends meet, establish a time frame. Say you are 40 years old and your home loan will be paid off in the next 10 years; then you need to plan for other expenses such as children’s higher education and marriage. The amount the term insurance pays your family should be more than your expenses.

 
02. The future of your dependents lies in your hands

If your dependents have a few years before they are financially independent, you can set that time as the length of your term.

 
03. Term insurance beyond your work life

It makes sense to match your term policy end date with your retirement date. Typically, by the time you reach retirement, you would have earned all the money that you need for a lifetime and more. This in conjunction with savings, assuming you have savings, will provide for a cushy retirement. When your retirement begins, your term insurance can end and your savings should keep you and your family afloat. An aspect to ponder over is - who will pay the premium once you retire? Once you retire there is no income generated and if you do not have pension or savings, you will not be able to pay the premium. It’s wise to keep this in mind and then decide on the course you want to take.

 
04. Liabilities

If you currently have any liabilities or plan to make a big purchase in the future which will result is mortgage payments, your policy should take this time frame into consideration. Ex: if it will take 15 years to pay your home loan then your policy’s term must be at least 15 years.

 
05. Length of support

The sum assured is envisioned to assist your family financially in your absence. It is in your hands to decide if the amount should last them for the years to come or only until they are able to get back on their feet. There are plans which even support your family till their retirement. Ultimately, the choice is yours.

 
04. Avoid thinking short-term and think long-term

Instead of trying to be scrimp and scrape and opting for a shorter plan with smaller premiums, where on renewal the premium price increases depending on your age and health, liberality is the key. Keep your family’s future in mind and opt for a suitable plan.

 

WHY AEGON LIFE FOR TERM INSURANCE PLANS?

When it comes to choosing the right term insurance plan for your family, you conduct research to pick the right option. After all, you need to be sure whose hands you’re leaving their future in.

Here’s a look at the rich history and credibility that Aegon Life brings:

01. Trust on Brand

Established more than 170 years ago, Aegon – world’s leading financial services, today operates in over 20 countries. Launched in 2008 with pan-India operations, Aegon Life Insurance Company Limited in India partnered with the reputed Bennett Coleman & Company Limited, i.e., The Times Group to offer insurance plans. Aegon Life Insurance leverages digital platforms to bring transparent solutions with a direct to customer approach. Aegon offers a wide range of insurance products such as term life insurance plan, pension plans, unit-linked insurance plans (ULIPs), health insurance plans, child education plans, and more.

 
02. E-Business Leader

We have garnered awards in various fields, making us a well-known, reputed and recognisable brand. In 2013, Aegon Life won the ‘Best Product & Distribution Award’ at the Indian Life Insurance Award 2013 presented by EDGE Advisory Services. In 2013, 2014, 2015 and 2016, we consistently won the ‘E-Business Leader Award’ at the Indian Insurance Awards. In 2016, Aegon Life received the ‘Best Service Quality Program’ award by the Service Quality Awards.

 
03. Claims Honoured

We at Aegon Life offer easy claim settlements. We consistently pay out all genuine claims with our standard claim process. In 2016-2017, our claim settlement ratio was 97.11%.

We understand the need of having financial security during troubled times. Our primary objective is to ensure smooth claim settlement for you and your family, from the beginning until the last step.

 
04. On that account

Arguably one of the best decisions you will make is opting for a term plan, but it is perplexing as well. The key to electing the right policy is planning, planning and more planning, plus cherry-picking a policy which meets your requirements and budget!

A comprehensive term Plan with cover for 36 Critical Illnesses.
If you want your family to maintain the same lifestyle in your absence, this plan is for you
If you are looking for a plan that will enable your family to sustain the same lifestyle even in your absence, this plan is for you.
A Non-Linked Non-Participating Whole of Life Term Insurance Plan
A term insurance plan that provides life cover, and pays back your premiums if all goes well.
A life insurance plan that gives your family financial protection at among one of the lowest rates