Starting Early Means Lower Premiums
Before We Hit 30s , we are healthy. The lifestyle diseases like diabetes haven’t started taking a toll on you. Substances like alcohol, smoke, and pesticides in our food haven’t crossed the unhealthy levels.

This means two things:

• The younger you are while buying term insurance, the lower will be your term insurance premium. To put things in perspective, a 30-year-old non-smoker could buy a term insurance cover of Rs. 1 crore for as low as Rs. 552 per month. The same amount of term insurance cover could cost three times more (Rs. 1,400 per month) for a 40-year-old non-smoker.
• While applying for term insurance, one has to undergo a medical check-up. An insurance company could decline to cover you with a term policy because of a lifestyle-related disease. The chances of this rejection are definitely higher as you approach your 40s.

So, healthy and young = cheaper term insurance premium!

3.) Lock Your Premiums Now

When you buy a health insurance policy, your premium increases every year. But with term insurance, you lock the premium amount.

So, buying a term insurance earlier in life implies that you will pay a lower premium for the rest of policy term. It works like this:

Ideally, a term insurance policy should cover you until the age you will have loans and liabilities. Your family may be dependent on you until you are 65. You may have some loans to pay-up till the age of 50. So a person buying term insurance at the age 30 will need a term cover for at least 35 years.

Anything for shorter duration, will not help your family when they might actually need it.

Don’t wait until you celebrate your 40th birthday to buy a term insurance plan.

4.) Tax-Saving

We all are always on the lookout for a number of options to invest and save on income tax.

So, good news! Premium paid towards purchasing term plan can be part of investments under 80C deductions.

Money saved in tax is more money in hand for other important things in life. 🙂

5.) Term plan by your employer is not your best plan

It’s good to work with an employer who care about your family’s future. But to rely only on the term plan offered by your employer, is not the best plan.

At the age of 35, you hit the peak of your career. To switch jobs and explore better career opportunities is always part of our growth.

But, let me tell you that the term plan offered by your employer may not be portable, and will end as soon as you move on.

Rely no one but your best judgement. Buy a term insurance plan when they are the most affordable for you and offer the best risk cover to your family!

Turning 30 is a major phase in any one’s life. While we may wish that anything uncertain would not happen to us, life throws a lot of surprises. These surprises may be bitter. But to make them less bitter, it is important that you buy a term insurance plan and secure your peace of mind.

Why it’s better to purchase a Term Plan from Insurance Intermediary/Brokers
You get to discuss your insurance needs directly with an insurance agent, they can guide you and help you with financial planning.

An agent can be extremely useful in case there is an unexpected crisis. Having a direct contact with an agent is a great way to move through the red tape. A good agent will help you and get you the money you need from your insurance company.

Some insurance agents are licensed to sell multiple products. They can be your one stop shop for your insurance needs. They may also may be able to help you out with a discount if you buy multiple insurance products from them. While companies may also do the same, it is important to remember that if you need a custom plan you often have to rely on a call center rep who is paid hourly and trying to get through the day. They may not be the most helpful person in your time of need.

Types of Death Covered /Not Covered in Term Plan

Types of Deaths Covered and Not Covered by Term Insurance

Natural Death: The natural death or caused by health-related issues is covered by term life insurance plans. In case the policyholder dies due to any type of critical illness or medical condition, the beneficiary of the policy will get the sum assured as the death benefit.

Accidental Demise: Term plans also provide coverage in case of death of the insured due to an accident. Moreover, many term life plans come with an additional accidental death benefit rider under which extra sum assured is paid to the beneficiary of the policy along with the basic sum assured, in case of accidental demise of the insured person.

However, there are certain exceptions to this. The death of the insurance holder under the influence of alcohol or any type of drug while driving or due to involvement in any type of criminal activities leads to claim rejection. Moreover, life insurance plans also exclude the death of an individual due to involvement in adventure sports like skydiving, parachuting, rafting, bungee jumping, etc.

Death by Suicide: In case the insured commits suicide during the initial 12 months from the date of policy commencement, the beneficiary is eligible to receive 80% of the premium paid if the policy is a non-linked one. In case of linked plans, if the policyholder commits suicide during the initial 12 months from the date of policy commencement, the beneficiary of the policy receives 100% of the total premium paid. However, if the policyholder commits suicide after the completion of 1 year of the policy, the benefits of the policy will be nullified and the policy will be terminated. There are certain life insurance companies that may or may not provide coverage for the suicide death. Moreover, it is very important for insurance buyers go through the terms and conditions of the policy and know the inclusions and exclusions of the policy before purchase it.

Self-Inflicted injuries: In case the death of the insured happens due to self-inflicted injuries or a hazardous activity, the claim made by the beneficiary will be rejected by the insurance company.

HIV/AIDS: The insurance company will not accept the claim if the death of the insured occurs due to any type of sexually transmitted diseases like HIV or AIDS.

Intoxication: If the policyholder dies due to overdoes of drugs or alcohol, then the insurance company will not provide any death benefit to the beneficiary.

Homicide: In case the insured gets murdered by the beneficiary and the investigation reveals the involvement of the nominee in the crime, the insurance company will reject the claim. The claim request will be put on hold by the insurance company until the beneficiary gets the clearance.

Tsunami or Natural Calamity: In case the death of the policyholder happens due to the tsunami or any other natural calamity, the insurance company will not provide any coverage until and unless the insured has opted for any rider benefit for the same.

Claiming for more than two policies: If the beneficiary makes claims for two or more term insurance policies, then he/she should follow the steps as per the guidelines of Insurance Regulatory and Development Authority of India (IRDAI). In fact, the nominee should submit the details of existing term life insurance plan while purchasing a new one. The information about the policy should be provided in the proposals form. The nominee will have to present the insured’s death certificate to the insurance company. The new insurance company will verify the information with the existing insurer. After the verification is successfully completed, the beneficiary receives the claim.

The Bottom Line
Prior to purchasing a term life plan, it is very important for insurance buyers go through the policy documentation. Having proper knowledge of both inclusions and exclusions of the policy can help the policyholder avail the coverage and prevent any type of discrepancy during the claim processing.

Thanks,

Somnath Mitra
Insurance Expert