Facts About Term Life Insurance

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Term life insurance plan provides life cover to an individual. In simple terms, a lump sum amount (Sum Assured) is paid to the family members on demise of life insured. For the life cover, the life insured has to pay relatively low premium. The life cover is for certain policy term after which life cover ceases.

Anyone aged above 18 years can buy term life insurance plan. The maximum policy term is usually 35 years. The average maximum age till which life is insured is 65 years.

What is term life insurance?

Term life insurance is a pure risk cover. It provides individual with life cover i.e. if something happens to the life insured the chosen Sum Assured is paid to the nominees.

What are the types of term life insurance?

Term insurance are of two types- pure risk cover which provides death benefit only and return of premium term insurance which provides death cover as well as returns base premiums at the end of policy term.

Are there any returns in term life insurance?

Only specific return of premium policies have maturity benefit which is equal to the all the base premiums paid throughout the policy term.

Does term insurance premium change over the policy term?

Term insurance policy premiums remain same throughout the policy term.

Can NRI buy term life insurance?

NRI can buy term insurance plans. All insurers do not offer term insurance for NRI’s. One should confirm whether the plan is available for NRI’s or not.

Does term insurance cover deaths outside India?

Term life insurance covers death outside India. If you are visiting abroad or plan to settle there, you can notify the same to insurer. Term insurance will not cover deaths in politically unstable countries and unsafe countries.

What types of deaths are not covered in term life insurance?

Suicide in the first policy year is the major exclusion. Other exclusions include self inflicted injuries, participation in adventurous sports etc. Terrorism coverage is included in the new term insurance policies.

Can individual claim in case of two policies?

If you have specified to the latest insurer that you already have a term insurance, there should be no issue in claiming from both the insurers. The concerned person can make claims from both insurers by providing the documents required by insurer to authenticate claim.