Term insurance is one of the most important and simplest types of life insurance. It offers your family financial protection and safety in case of your unfortunate demise. It is the most crucial financial instrument that you must have.
You pay the insurer a specific amount of premium to ensure the financial cover (known as sum assured) that goes to your family (or nominee) if you pass away during the policy term.
₹ 1.5Cr life cover
Amit Rajeis an experienced marketer who has worked in various Fintechs and leading Financial companies in India. With focused experience in Digital, Amit has pioneered multiple digital commerce in India. Now, close to two decades later, he is the vice president and head of the D2C business department. He masters the skill of strategic management, also being certified in it from IIMA. He has challenged his challenges and contributed his efforts in this journey of digital transformation.
Prasad Pimplehas a decade-long experience in the Life insurance sector and as EVP, Kotak Life heads Digital Business. He is responsible for developing user-friendly product journeys, creating consumer awareness and helping consumers in identifying need for life insurance solutions. He has 20+ years of experience in creating and building business verticals across Insurance, Telecom and Banking sectors
Last updated on Sep 08,2024
Table of ContentsTerm insurance is one of the many types of life insurance that offers you coverage for a certain number of years or months, which can also be called a term. This type of life insurance provides your family much-needed financial security in case of an unfortunate event in exchange for a certain premium amount. In case the life insured's unfortunate death occurs during the policy term, the insurer provides the death benefit payout to the nominee, also called a life cover, which helps manage their expenses.
A term insurance policy is a very popular choice for people seeking all-around coverage at affordable premiums. These plans can be very useful if the financial security & the protection of your loved ones are your utmost consideration.
Whether you are a first-time buyer or looking to reassess your existing coverage, you need the necessary insights to effectively utilize a term insurance calculator in your insurance planning journey. To utilize an insurance calculator for term insurance, simply follow these straightforward steps:
Use a reliable calculator from Kotak Life Insurance to start with the calculation.
Once you have selected a calculator, enter your basic information, such as age, gender, and annual income. This data assists the calculator in estimating your insurance needs and premiums.
Choose the desired coverage amount and term to determine the appropriate level of term insurance. The coverage amount represents the sum your family will receive in the event of your untimely passing, while the term refers to the duration of the policy.
After entering your information and selecting the coverage amount and term, the calculator will provide an estimate of the policy premium. This premium should be an indication of how much a term insurance can cost you. This is just an indication and not the final premium.
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Term insurance is a very important part of financial planning. It provides people with peace of mind & protection from unexpected events like death. Let us have a look at the benefits of term insurance.
One of the primary advantages of term insurance is its affordability. Term insurance policies are typically less expensive compared to other types of life insurance. By focusing solely on providing coverage for a specific term, these life insurance policies offer peace of mind and stay light on pockets.
Term insurance offers exceptional flexibility in terms of policy duration and coverage amounts. You can choose the term length that aligns with their needs. Plus, you get the option to adjust the coverage amount over time, ensuring that the policy remains relevant as your financial circumstances evolve.
Term insurance provides a straightforward and transparent solution to protect your loved ones and provide them with financial stability and security in case of an unforeseen tragedy. Being a pure risk product, you don’t have to pay heavy premiums since the life cover is fixed for the premium you pay.
Term insurance serves as an additional life coverage option to complement existing life insurance policies. For individuals who already have permanent life insurance coverage, purchasing an additional term insurance policy can help bridge any gaps in coverage during critical life stages.
It can be used as a tool to create a stable income source, pay off estate taxes, or settle outstanding debts, ensuring that the financial burden does not fall on the shoulders of the surviving family members. By carefully strategizing the duration and coverage amount of a term insurance policy, individuals can secure a financial legacy for their loved ones.
Many term insurance policies come with the option to add critical illness riders. These riders provide coverage against life-threatening diseases such as cancer, heart attack, and stroke. In the event of a critical illness diagnosis, the policyholder receives a lump sum amount to cover medical expenses, ensuring that the family’s finances are not depleted by high treatment costs.
Term insurance policies can also include riders that provide benefits in case of accidental disability. If the policyholder becomes permanently disabled due to an accident, these riders offer financial support, helping to cover living expenses and medical costs during recovery.
In the event of the policyholder's untimely demise, term insurance provides a lump sum payment to the beneficiaries. This financial security can help the family maintain their standard of living, cover day-to-day expenses, pay off debts, and secure the future of dependents.
Premiums paid towards term insurance policies are eligible for tax deductions under Section 80C of the Income Tax Act. Additionally, the death benefit received by the beneficiaries is exempt from taxes under Section 10(10D), providing a dual tax advantage.
The primary benefit of term insurance is the death benefit. If the policyholder passes away during the term of the policy, the designated beneficiaries receive a lump sum amount. This death benefit can be crucial in helping the family cope with financial challenges and ensuring their long-term financial well-being.
Although traditional term insurance does not offer survival benefits, some plans provide a return of premium option. In these plans, if the policyholder survives the policy term, they receive back all the premiums paid, adding a savings element to the pure risk coverage.
Certain term insurance plans can be extended to offer coverage up to 99 or 100 years of age, effectively functioning aswhole life insurance. This ensures lifelong protection and peace of mind, knowing that your beneficiaries will receive the death benefit regardless of when you are not around anymore.
Term insurance policies can be enhanced with various riders and add-ons to suit individual needs. Common riders include accidental death benefit, waiver of premium, and income benefit rider. These additional features provide extra layers of security and financial protection, ensuring comprehensive coverage for all eventualities.
When choosing the right term insurance, the policyholder must understand the factors that come into play when determining the premium andeligibility for term insurance.Understanding these factors is crucial for individuals seeking to purchase a term insurance policy that suits their needs.
Assess your financial obligations, including outstanding debts, future expenses, and income replacement needs, to determine the appropriate coverage amount. Ensure that the death benefit is sufficient to provide your beneficiaries with a comfortable financial cushion.
Consider your financial goals, age, and specific commitments when choosing the term length. The policy should ideally cover the duration during which your family is financially dependent on you or when your obligations are most significant.
Evaluate your budget and ensure that the premium payments fit comfortably within your financial means. Although term insurance is generally affordable, it is crucial to select a policy that you can sustainably pay for over the entire term.
Ensure that you check the claim settlement ratio ^ of the term insurance you choose. This is the ratio of claims settled vs. claims requested. For example, a 97% claim settlement ratio ^ indicates that out of 100 claims raised, 97 were settled. The claim settlement ratio^ of Kotak Life Insurance is 98.25%
Kotak Life Insurance is a trusted and one of the fastest-developing names in the Indianlife insuranceindustry.
Here are some additional features that make Kotak Life the perfect option to choose from:
If you are looking for top-notch customer service and easily manageable plans, you are thinking Kotak Life.
While term insurance is a straightforward concept, there are various types of term plans available in the market, each tailored to meet different needs and preferences. Understanding these variations will help you choose a term insurance plan that aligns with your financial goals and protects your family's well-being. So, here are four term insurance types available while opting for a pure life cover policy:
The basic term insurance offers pure life coverage, ensuring that your beneficiary receives the death benefit in the unfortunate event of your untimely demise. There are no maturity benefits provided if you survive the policy term.
An increasing term plan is a dynamic policy where the sum assured amount progressively grows over the years. The death benefit may have a maximum cap on the sum assured's increasing amount. This policy, like the basic term policy, does not provide any maturity benefits but does offer life coverage.
In decreasing term plans, the death benefit gradually decreases as the policy term approaches its expiration. These plans typically have lower premiums as they are primarily designed to cover specific debts or loans.
With a TROP plan, you are eligible to receive a refund of all the premiums paid throughout the policy term after the plan expires. In addition to providing life coverage, this policy also offers a maturity benefit by returning all your premiums if you survive the policy term.
Term insurance with critical illness cover includes a rider that provides a lump sum payout if the policyholder is diagnosed with a specified critical illness such as cancer, heart attack, or stroke. This additional coverage helps manage the high costs associated with treatment and recovery, offering financial relief during a challenging time.
This type of term insurance includes an accidental death rider, which provides an additional payout if the policyholder dies due to an accident. The accidental death benefit is typically a multiple of the basic sum assured, offering extra financial protection for the policyholder’s family in the event of an accidental death.
Term insurance with limited pay allows policyholders to pay premiums for a shorter duration while enjoying coverage for the full policy term. For instance, you might pay premiums for 10 years, but the coverage continues for 20 or 30 years. This option is beneficial for those who want to limit their premium payment period while ensuring long-term protection.
Group term life insurance plans are typically offered by employers or associations to their employees or members. These plans provide life coverage at lower premiums due to the group nature of the policy. Group term insurance is a cost-effective way to offer financial security to a large number of people under a single plan.
Pure protection term plans focus solely on providing life coverage without any additional benefits or savings components. These plans are designed to offer maximum coverage at the lowest possible premium, making them ideal for individuals seeking comprehensive protection without any investment element.
Some term insurance policies now come with wellness benefits that incentivize healthy living. These benefits may include discounts on premiums for maintaining a healthy lifestyle, regular health check-ups, and participation in wellness programs. Such policies encourage policyholders to stay healthy, which can lead to lower healthcare costs and longer life expectancy.
Term insurance policies with health benefits offer coverage for medical expenses related to hospitalization, surgery, and other health-related costs. These policies often come with riders that provide a lump sum payout or reimbursement for medical expenses incurred due to illness or injury, ensuring comprehensive financial protection.
When it comes to securing the financial future of your loved ones, a term plan is a reliable and affordable life insurance option. Unlike othertypes of life insurance policies,term insurance cover offers pure protection and a higher coverage amount at a lower premium. Delve into the significant features of a term plan that make it an attractive choice for many individuals.
While the low premiums already make these plans lucrative, different payment methods add to the benefits and satisfy and suit a wider range of policy buyers. Depending on their convenience, they can either pay the premiums yearly, half-yearly, quarterly, monthly or as a single payment.
The premium, or the amount paid to the insurance company, is usually lower compared to otherlife insuranceproducts due to the absence of investment components. Moreover, opting for a term plan at a younger age often results in lower premiums.
Term insurance provides significant protection against liabilities such as home loans, personal loans, and other debts. In the event of the policyholder’s untimely demise, the death benefit can be used to settle outstanding debts, preventing financial burden on the surviving family members.
In addition to Section 80C, premiums paid for riders that cover health-related expenses, such as critical illness riders, are eligible for tax deductions underSection 80D. This provides further tax savings and makes term insurance a tax-efficient investment.
Some term insurance plans offer the return of premium (ROP) feature, where the policyholder receives back all the premiums paid if they survive the policy term. This option combines the benefits of pure risk coverage with a savings component, ensuring that the policyholder gets a return on their investment.
Many term insurance plans offer coverage up to a high maturity age, such as 75 or even 100 years. This ensures long-term financial protection and peace of mind, knowing that your loved ones will be financially secure regardless of when you pass away.
Term insurance plans with critical illness cover provide a lump sum payout if the policyholder is diagnosed with a specified critical illness. This payout can be used to cover medical expenses, loss of income, and other financial needs during the recovery period, ensuring comprehensive financial support during a health crisis.
Policies with the return of premium on maturity feature offer the policyholder a refund of all premiums paid if they survive the policy term. This feature provides a financial cushion and adds a savings element to the pure protection offered by term insurance.
Accidental death and disability cover riders provide additional benefits in case of accidental death or disability. The accidental death rider offers an extra payout, while the disability rider provides financial support in the event of permanent or temporary disability, helping cover medical expenses and loss of income.
Life is uncertain and cannot be predicted at any point. You never know when an unfortunate incident may occur and leave your loved ones without any financial security. You should prepare your family for a such a scenario and a term insurance plan can help you do so.
While it is natural to focus on investments that provide immediate returns, neglecting theimportance of a term insurance plancan leave one's family vulnerable to financial uncertainties. You can ensure your loved ones are shielded from the financial burdens after you by taking a term plan.
A best term insurance plan is the one that can help you take care of all your commitments in one life cover. Therefore, aim at having a life cover of at least 10 times your annual income. It can be more, but not less than that.
A term life insurance plan is a vital financial tool that offers comprehensive protection and ensures the financial well-being of your family. Its affordability, flexibility, and tax benefits make it an attractive choice for individuals seeking financial security.
Any individual who has financial dependents should avail of a term insurance policy. This would generally include parents, single women or men who have senior parents, professionals with debts or loans, persons that are nearing retirement, etc.
When you buy a term insurance plan, you also get tax benefits underSection 80CandSection 10(10D)of the Income Tax Act, 1961, thus reducing your taxable income. Here is a detailed version of who should buy a term plan:
As parents, your spouse, children, and your parents are dependent on you. With the help of the sum assured payout, you can ensure the safe future of your children and also provide aid to your parents. You can be stress-free about the financial condition of your loved ones after getting a term life insurance plan..
You may have availed of a certain education loan to go abroad and study. But if something were to happen to you, your parents shouldn’t bear the brunt of the debt. The sum assured of the term plan can be used to clear off your study loan.
If you are going to retire soon and have dependents or debts, term insurance is the perfect way to safeguard your interests. The death benefit would be enough to pay off any debts and also provide financial assistance to the dependent members.
Individuals who are looking for some tax savings that give beneficial returns can opt for term insurance. Investing in a term plan is the perfect way to get tax benefits and earn a life cover. Premiums paid for term insurance policies are deductible under Section 80C of the Income Tax Act of 1961.
Women these days support their families not just emotionally but also financially. They can safeguard the future of their family with a term plan to ensure their family and the dreams of little ones are secured even in their absence.
Young individuals, especially those just starting their careers, can lock in lower premium rates by purchasing term insurance early. With fewer health issues and lower risk profiles, young policyholders can benefit from affordable premiums while securing long-term financial protection for their future families and dependents.
Self-employed individuals often lack the benefit of employer-provided life insurance. For them, a term insurance policy is essential to provide financial stability to their families in case of an unexpected demise. It ensures that their family is not left burdened with business debts and other financial obligations.
NRIs, who have families or financial interests in India, should consider term insurance to protect their loved ones back home. Term insurance can provide a financial safety net that ensures their family’s financial needs are met, regardless of their geographical location.
Senior citizens can also benefit from term insurance, particularly those who still have dependents or wish to leave behind a financial legacy. While premiums may be higher, term insurance can help cover final expenses, outstanding debts, and provide financial support to surviving family members.
My experience with Kotak e-Term Plan from filling the proposal form to policy issuance has been smoother. Uploading document is generally challenging, but it was quite easier with Kotak Life. Their portal is responsive and intuitive. Keep up the good work!
Buying a term plan was long due for me. I found Kotak Life, logged in on their website and I got a call from their agent. I checked my eligibility through their portal, got a quote for the premium and I was in. My family’s financial security was now in my hands. Now my life is stress-free.
Buying a term plan online sounded like a challenge as I am not used to buying critical insurance plans online. I came across Kotak Life when someone at work recommended to buy their Kotak e-Term plan. The plan is very simple, offered me plan options and I knew exactly that this was the right plan for me.
I have a good financial portfolio but there was one thing missing, a term plan. I wanted to buy term plan was to ensure my spouse’s financial future and keep her ready for any financial liabilities in my absence. After considering different plans, I finalized Kotak e-Term plan since it aligned perfectly with what I was looking for.
Be it my family’s financial future or my little one’s happiness, Kotak e-Term plan helped me secure all of it in one insurance plan. They have affordable premiums, good life cover and some rider options that helped me manage many things at once. I strongly recommend you to buy a Kotak e-Term plan asap.
- Apurva Amod Gadikar
I was looking for a term plan when I came across Kotak e-Term plan and used their portal to calculate premium. They have a simple portal where you enter the information and get a quote. Beyond that, I just enjoyed the fact that their journey is easy to follow and their call centre team assists if you are stuck somewhere.
Kotak e-Term plan was one of the recommended term plan while I was researching about the same. The service by the call centre agents was good. Also, their online portal is perfect. The Kotak e-Term plan helped me to become stress-free about any financial liability that might fall on my family, after me.
- Apurva Amod Gadikar
Kotak e-Term plan was a term plan I came across in an ad while surfing social media. I could not find a better term plan. It is affordable and they have good service centre agents who help you with everything kindly and patiently. Buy a term plan if you want to live a stress-free life, save taxes and ensure your family’s finance is in good hands.
A term plan is one of the insurance policies everyone should have, as per me. I bought Kotak e-Term plan and paying premiums for a year or more. The best part is it offered me flexible premium payment options that aligned with my financial commitments. Plus, they have different plan options that makes it easier for choosing the right cover as per your needs.
- Jayant Mohanrao Gaikwad
When it comes to securing the financial future of your loved ones, term insurance is an invaluable tool. It provides a cost-effective way to protect your family from unforeseen circumstances. However, with numerous insurance providers and policy options available in the market, selecting the best term insurance plan can be a daunting task.
There are several factors that you need to check and compare before opting for a term insurance policy from a particular insurer. Here are some that you need to consider before buying a policy:
The first step in choosing the best term insurance plan is to evaluate your insurance requirements. Consider factors such as your age, income, financial liabilities, future goals, and the number of dependents.
To find the best term insurance plan, it is crucial to compare a variety of plans and offers. Look for reputable plans that have a track record of prompt claim settlement and other benefits.
Term insurance plans offer coverage for a specific duration, known as the policy tenure. Basis different factors like your age, financial responsibilities, and long-term financial goals, choose a policy tenure that adequately covers your dependents' needs, such as education expenses or mortgage payments.
The sum assured is the amount that your nominees will receive in the event of your demise. It should be sufficient to cover your family's financial obligations, including outstanding debts, future expenses, and income replacement.
Term insurance plans come with different premium payment options, such as single, quarterly, annual, semi-annual, or monthly premiums. Consider your cash flow and affordability while selecting the premium payment frequency.
Carefully read and understand the terms and conditions of the term insurance plan before making a purchase. Pay attention to factors such as policy exclusions, waiting periods, and claim settlement procedures.
The claim settlement ratio ^ of an insurance company reflects the percentage of claims successfully resolved by the insurer out of the total number of claims received. Currently, Kotak Life Insurance boasts an impressive claim settlement ratio^ of 98.25% for FY 2022-23.
Term insurance plans often offer additional riders or add-ons that can enhance coverage. Common riders include critical illness cover, accidental death benefit, waiver of premium, and disability cover. Evaluate these riders and consider adding them to your term insurance plan for added protection.
The solvency ratio * is a critical factor to consider when selecting a term insurance plan. It reflects an insurance company's ability to meet its financial obligations, and indicates its financial strength and stability. For the year 2022-23, Kotak Life Insurance had a solvency ratio * of 2.83%.
Evaluate the insurer’s service quality, including customer support, claim process efficiency, and ease of access to policy information. Opt for insurers that offer robust online services, such as premium payment, policy renewal, and claim filing, to make managing your policy convenient and hassle-free.
Some term insurance plans offer multiple payout options, such as lump-sum payment, monthly income, or a combination of both. Choose a payout option that best suits your family’s financial needs and preferences. For instance, a monthly income option can help manage daily expenses, while a lump-sum payment can be used to settle debts or make large investments.
Term insurance is one of the best ways to safeguard the financial future of your family. It is one of the most simplest & affordable ways to make sure that your family is financially secure in an unfortunate event of death.
The primary purpose of term insurance is to provide financial protection to your family. In the unfortunate event of your death, the policy ensures that your family does not face financial hardships. The death benefit can be used to cover daily living expenses, children's education, and other essential costs, helping your loved ones maintain their standard of living and achieve their long-term goals. Term insurance offers peace of mind, knowing that your family will be financially secure even in your absence.
Term insurance can also play a crucial role in protecting your assets. If you have significant financial liabilities such as a home loan, car loan, or personal loans, the death benefit from a term insurance policy can be used to pay off these debts. This ensures that your family is not burdened with debt repayments and can retain ownership of valuable assets like your home or car. By safeguarding your assets, term insurance helps preserve your family's financial stability and legacy.
Modern lifestyles come with a range of new risks and uncertainties, such as critical illnesses, accidents, and changing economic conditions. Term insurance policies often offer riders and add-ons that provide coverage for these risks. For instance, critical illness riders offer a lump sum payout if you are diagnosed with a serious illness, helping cover medical expenses and loss of income. Accidental death and disability riders provide additional benefits in case of accidental injuries. These supplementary coverages ensure comprehensive protection, allowing you to cope with unexpected challenges without depleting your savings.
With the uncertainties we face today, like the deadly COVID-19 pandemic, having aterm plan for a familyis even more crucial. It helps your family handle the financial difficulties that may arise if they were to lose their main source of income.
Additionally, it can assist in paying off any debts, such as car loans or home mortgages making your family free from liabilities after you.
In today's digital age, the convenience and accessibility of online platforms have revolutionized the way we shop for various products and services, including insurance. Buying term insurance plans online has become increasingly popular due to its simplicity and efficiency.
The first step in buying a term insurance plan online is to determine the sum assured, which is the amount your beneficiaries will receive in the event of your death. To calculate the appropriate sum assured, consider factors such as:
Using online calculators available on insurance company website can help you arrive at a precise figure for the sum assured.
Once you have calculated the sum assured, the next step is to choose the benefits and additional riders that suit your needs. Common riders include:
After selecting the necessary benefits and riders, request a quote from multiple insurers. Online comparison tools can help you compare premium rates, coverage features, and policy benefits from different insurance providers.
Once you have chosen the best term insurance plan that fits your requirements, proceed with the application process:
Buying insurance policies online, particularly term plans, has become increasingly popular due to its convenience, affordability, and a plethora of other benefits.
One of the most significant advantages of purchasing a term plan online is the convenience it offers. You can browse through various plans, features, and premiums at your own pace and from the comfort of your home.
Buying a term plan online eliminates any ambiguity or miscommunication that may arise when dealing with agents. Online insurance platforms provide comprehensive details about the policy terms, conditions, coverage, and exclusions.
When you buy a term plan online, you often eliminate the need for intermediaries, such as agents or brokers. This cuts down on administrative costs and commissions that are typically included in offline policies.
You can evaluate various factors such as coverage, premium, claim settlement ratio ^ , solvency ratio * , customer reviews, and ratings all in one place. This makes it easier to find a term plan that best suits your requirements and budget.
Kotak Life Insurance provides a remarkable 98.25% claim settlement ratio ^ and a solvency ratio * of 2.83.
Offline insurance policies typically involve a lengthy documentation and verification process, which can lead to delays in policy issuance. Once you complete the online application and the necessary verification checks are done, the policy documents are generated instantly or within a short period.
Another significant advantage of buying a term plan online is the round-the-clock availability of information and services. You can access insurance websites or mobile apps at any time, allowing you to research, purchase, or manage your policy at your convenience.
Online insurance platforms offer a variety of add-ons and riders that you can customize according to your needs. These may include critical illness cover, accidental death benefit, waiver of premium, and more. The ability to easily add these riders ensures that you can tailor your policy to provide comprehensive coverage.
Term plans available online often come with comprehensive features designed to meet diverse needs. You can find policies that offer flexible premium payment options, high sum assured, return of premium, and multiple payout options. The wide range of features ensures that you can select a policy that aligns perfectly with your financial goals and requirements.
Aterm insurance rider, or a term life insurance rider, is the extra feature you can add to your main life insurance policy. It provides additional coverage for a certain period of time called the "term," for which in exchange you need to pay an additional premium.
It keeps your life insurance coverage valid even if you are unable to pay your premiums. This policy has the effect of waiving all future premiums in the event of permanent disability, but the policy benefits continue for the duration of the policy.
Under this rider, you pay an additional premium to be covered if you are diagnosed with any of the critical illnesses listed in the policy document. This benefit functions similarly to an income replacement plan, can be used to cover both medical and domestic expenses.
You pay an additional sum for this benefit to cover your family in the event of accidental death. When you choose accidental death benefit coverage, the insurer Will pay the nominee an additional death benefit sum assured which is over and above your basic death sum assured.
The right time to buy term insurance is right now. As you get older, your risks of developing lifestyle diseases rise, as do your insurance expenses. When you get a term plan at a young age, you get an insurance policy with a low premium. As a result, it may be prudent to purchase term life insurance when you are young.
The primary purpose of term insurance is to provide financial support to your dependents if something were to happen to you. Therefore, the right time to buy term insurance is typically when you have dependents or financial responsibilities.
Generally, the younger and healthier you are when you purchase a policy, the lower your premiums will be. Insurance companies consider age and health as risk factors, and the likelihood of developing health issues increases with age. By purchasing term insurance at a younger age, you can lock in lower premiums for the duration of the policy term.
If you have substantial debts such as a mortgage, car loans, or student loans, it is wise to consider buying term insurance. In the event of your passing, these debts can become a burden on your family. Term insurance ensures that your loved ones are not burdened with financial liabilities and can continue to meet their financial obligations.
Certain life milestones often trigger the need for term insurance. For example, getting married, starting a family or buying a house are significant event that increase your finacial responsibilities. These milestones often indicate a change in your life circumstances, and it's crucial to reassess your life insurance needs accordingly.
Term insurance can also be used as a tool for long-termfinancial planning.If you have a specific financial goal, such as ensuring your child's education or leaving a legacy, purchasing a term insurance policy can help you achieve those goals.
When it comes to securing the financial future of our loved ones, term life insurance provides valuable protection. However, understanding the various payout options available is crucial in making an informed decision. For your term insurance coverage, you can choose one of the following payout options:
If you choose this option, your nominee will get the entire amount owed to them in a single payment. If the total sum assured is ₹2 Crore, for example, your nominee will receive the entire amount once their claim is accepted.
In this option, the nominee will receive a portion of the sum assured as a lump sum, and the remaining sum will be distributed in monthly/annual instalments.
Another payout option available in term life insurance is a one-time lump-sum payment with increasing monthly payouts. In this arrangement, the beneficiaries receive a portion of the death benefit as a lump sum, along with regular monthly payments that increase over time. This option helps address inflation and rising living expenses by providing a higher payout amount in the later years.
A term plan offers a fixed coverage amount, known as the term insurance cover or term plan cover, for a specific period of time. Determining the right amount of coverage can be a daunting task.
The first step in determining the appropriate term insurance cover is to evaluate your financial obligations. Consider your outstanding loans, such as a home loan or a car loan, and calculate the total amount that needs to be repaid.
Apart from immediate financial obligations and income replacement, it is important to consider future expenses. This includes your children's education, marriage, or any other major life events. Calculate the estimated costs of these expenses and include them in your term insurance coverage.
Inflation erodes the purchasing power of money over time. To counter the impact of inflation, it is recommended to consider inflation-adjusted term insurance coverage. Estimate the future value of your financial obligations and income replacement needs based on projected inflation rates.
If you already have other life insurance policies, such as a traditional life insurance plan or employee group insurance, evaluate the coverage amount provided by these policies. Deduct the existing coverage from the total term insurance cover required to determine the additional coverage you need.
With any insurance policy, there are certain documents required to avail yourself of term insurance coverage. Understanding and preparing the necessary documents in advance can streamline the application process and ensure a smooth experience.
A recent picture of the life insured
Proof of address- This can be any of the following: Aadhaar (front and back)/Driving License/Passport (front and back)
Income evidence- Keep in mind that your income proof should match your claimed annual income. Additionally, for salaried applicants: Last three months' pay stubs/form 16/last three years' ITR/last six months' bank statement where salary is credited Non-salaried applicants should: ITR for the previous three years with the income computation.
While term insurance offers simplicity and affordability, navigating through the terminology associated with term insurance can sometimes be confusing for policyholders.
In technical words, 'Sum Assured' refers to the amount that the insurer agrees to pay in the case of the insured person's death or the occurrence of any other covered event.
The sum assured is the amount paid to the nominee by the life insurance company if the covered individual dies within the policy's term. The policyholder selects the sum assured at the time of purchase.
The 'nominee' is the person (legal heir) named by the policyholder to whom the life insurance company would pay the sum assured and other benefits in the event of an untimely death. The nominee could be the life insured’s wife, child, parents, or others.
The 'policy tenure' refers to the length of time that the policy offers life insurance coverage. Depending on the type of life insurance plan and its terms and circumstances, the policy tenure might range from one year to 100 years or whole life. It is frequently referred to as a policy term or policy duration.
The maturity age of the life guaranteed is the age at which the policy ceases or terminates. This is similar to policy tenure, but it expresses how long the plan will be in effect in a different way. Essentially, the life insurance company declares the maximum age at which the life insured will receive life insurance coverage.
The premium is the amount you pay to keep your life insurance policy active and continue to receive coverage. If you are unable to pay the premium by the due date or even within the grace period, the insurance will be canceled.
There are several ways to pay the premium:
You can pay your life insurance premium whenever convenient.
Riders are paid-for extras that extend the scope of the base life insurance policy. Riders are purchased at the time of purchase or on the anniversary of the insurance. Riders of various varieties can be purchased in addition to the standard plan. However, the quantity and type of riders will vary by insurance.
Furthermore, the terms and conditions of each insurance may differ. Here is a list of some well-known riders provided by life insurance providers.
A policy lapses when the policyholder fails to pay the premiums within the grace period specified in the policy. When a policy lapses, the coverage terminates, and the death benefit is no longer payable.
The grace period is the specified period after a premium payment is due during which the policy remains in force, even if the premium has not been paid. If the premium is not paid within the grace period, the policy may lapse.
Term insurance policies typically do not have a surrender value. However, some insurers offer term policies with a return of premium (ROP) feature, where a portion or the entire premium paid is refunded if the life insured survives the term.
Underwriting is the process through which an insurance company assesses the risk associated with insuring an individual and determines the premium rate. It involves evaluating the applicant's health, lifestyle, occupation, and other relevant factors.
Convertible term insurance gives the policyholder the option to convert their term insurance policy into a permanent life insurance policy, such as whole life or universal life insurance, without the need for a medical examination. This provides flexibility and long-term coverage options.
A beneficiary is a person or entity designated by the policyholder to receive the death benefit in the event of the insured's passing. Beneficiaries can be individuals, such as family members or friends, or organizations, such as charities or trusts.
Term length refers to the duration of the insurance coverage provided by the policy. Options may be available depending on the insurance provider.
The insured is the person whose life is covered by the term insurance policy. In the event of their death during the term, the beneficiaries will receive the death benefit.
Term insurance provides financial security to your family in case of your untimely demise, ensuring their financial stability and fulfilling their future needs.
The age limit to buy a term insurance plan is typically from 18 to 65 years, depending on the insurance company's policy.
The right time to buy term insurance is as early as possible, ideally when you have dependents or financial responsibilities, to benefit from lower premiums and longer coverage.
Term insurance is a cost-effective way to provide substantial life coverage, protecting your loved ones financially and providing peace of mind.
Yes, natural death is generally covered in a term plan unless specified otherwise in the policy terms and conditions.
Yes, it is possible to have multiple term insurance policies to increase the overall coverage amount, as long as you disclose the existing policies to the insurance companies
Term insurance premiums are eligible for tax benefits under Section 80C of the Income Tax Act up to a certain limit. Consult a tax professional or refer to the tax regulations for specific details.
The premium for term insurance is calculated based on factors such as age, coverage amount, policy term, and the applicant's health and lifestyle. Insurance companies provide online premium calculators for accurate estimates.
Term insurance premiums can be paid online through various modes such as net banking, debit or credit cards, UPI, or digital wallets on the insurance company's website or mobile app.
In most cases, term insurance plans cover suicidal death after the policy has been in force for a specified period, usually one year from the policy start date. Policy terms may vary, so refer to the policy documents for specific details.
Yes, some insurance companies offer term insurance plans specifically designed for smokers, taking into account the increased health risks associated with smoking.
Term insurance is generally more cost-effective and provides pure life coverage, while traditional life insurance combines insurance with savings or investment components. The choice depends on your specific needs and financial goals.
A critical illness rider is an additional benefit that can be added to a term insurance plan. It provides a lump sum payout if the life insured is diagnosed with a specified critical illness covered under the rider.
Payment options in a term insurance plan typically include annual, semi-annual, quarterly, or monthly premium payment modes, depending on the insurance company's offerings.
Buying a term insurance plan online is convenient, offers a wider range of options, and may have lower premiums. However, the choice between online and offline depends on your preference and comfort level.
The insurance company determines the term insurance premium based on various factors such as age, coverage amount, policy term, medical history, occupation, and lifestyle habits.
Term insurance primarily provides financial protection in the event of the life insured’s death and does not offer wealth creation features. Consider other investment or insurance options for wealth creation.
To process a term insurance claim, the nominee or legal beneficiary needs to inform the insurance company, submit the required documents, such as the death certificate, policy documents, and claim form, and cooperate with the insurer during the claim settlement process.
In the event of the life insured’s death during the policy term, the term insurance policy pays the death benefit (sum assured) to the nominee or legal beneficiary mentioned in the policy.
Once the policy term ends, the coverage provided by the term plan ceases, and there are no further benefits payable unless the policy includes a return of premium or survival benefit feature.
If the life insured survives the policy term, there are no maturity or survival benefits payable under a traditional term insurance plan unless it includes a return of premium or survival benefit feature.
In a pure-term insurance plan, there is typically no maturity or survival benefit payable at the end of the policy term unless the policy includes a return of premium or survival benefit feature.
If the appointed nominee dies during the policy term, the policyholder should update the nomination by providing a new nominee to ensure that the death benefit is paid to the appropriate beneficiary.
Yes, a term plan claim can be rejected if the insurance company finds that the policyholder provided incorrect information, concealed important facts, or the cause of death is excluded from the policy coverage. Providing accurate information is crucial to avoid claim rejection.
The insured's gender can affect the premium amount in a term insurance policy since women generally have lower mortality rates compared to men. Insurance companies factor in gender-based mortality tables while determining premiums.
In a traditional term insurance plan without a return of premium feature, if the life insured does not die during the policy term, there is no maturity benefit or money refunded at the end of the term insurance policy.
Taking riders with term insurance depends on your specific needs and requirements. Riders can provide additional coverage for critical illnesses, accidental death, disability, etc., but they come at an extra cost.
The premium for riders varies based on factors such as the type of rider, coverage amount, the age of the insured, and the term of the rider. Insurance companies provide specific details about rider premiums.
Purchasing a rider provides additional coverage beyond the basic term insurance plan, addressing specific risks or needs. It offers financial protection in case of critical illnesses, disabilities, or accidents, enhancing the overall coverage.
If you become a Non-Resident Indian (NRI) after purchasing a term plan, you generally remain covered under the policy. However, it is essential to inform the insurance company about your change in residency status for smooth policy servicing.
The choice between limited pay and regular pay-term insurance plans depends on your financial capacity and preferences. Limited pay plans require higher premium payments for a shorter duration, while regular pay plans spread the premium payments over the policy term.
Yes, a term plan can be used to cover financial liabilities such as loans, mortgages, or other debts. The sum assured can be utilized by the nominee to repay the outstanding liabilities in the event of the life insured’s death.
Buying a rider with term insurance is not mandatory but recommended. It depends on your individual needs and preferences. Riders provide additional coverage and benefits beyond the basic term insurance policy.
Term insurance provides coverage for a specific term or duration, typically without any savings or investment component. Life insurance, on the other hand, combines insurance coverage with a savings or investment component, offering both protection and wealth accumulation features.
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Submit Rating Read about Tax benefits and Plan DisclaimerTax Benefits and Disclaimers
You may avail of tax benefits under Section 80C and Section 10(10D) of Income Tax Act, 1961 subject to conditions as specified in those sections. Tax benefits are subject to change as per tax laws. Customer is advised to take an independent view from tax consultant.
Claim Settlement and Solvency ratio * disclaimer:
^ Figures arrived are basis the company’s latest annual audited figures for Individual Policy Claims for 2023-24
Get 2 Crore Life Cover @₹30/day * Disclaimer:
≈The above illustration is for an 18-year-old healthy male, non-smoker who has opted for the Life Option with a 40-year policy term with regular premium payment mode, Level Recurring Payout Option and Sum Assured on Death of Rs.2 Crore. The per day premium is Rs.30 [Rs. 10,800 Annualized Premium / 365 days = Rs. 29.59].
Get 1 Crore Life Cover @₹15/day * Disclaimer:
≈The above illustration is for an 18-year-old healthy male, non-smoker who has opted for the Life Option with a 40-year policy term with regular premium payment mode, Level Recurring Payout Option and Sum Assured on Death of Rs.1 Crore. The per day premium is Rs.15 [Rs. 5,400 Annualized Premium / 365 days = Rs. 14.79].
Get 1.5 Crore Life Cover @₹22day * Disclaimer:
≈The above illustration is for an 18-year-old healthy male, non-smoker who has opted for the Life Option with a 40-year policy term with regular premium payment mode, Level Recurring Payout Option and Sum Assured on Death of Rs.1.5 Crore. The per day premium is Rs.22 [Rs. 8,100 Annualized Premium / 365 days = Rs. 22.19].
The Above premium figures are exclusive of Goods and Services Tax and cess. Goods and Services Tax and Cess thereon, shall be charged as per the prevalent tax laws over and above the said premiums. The channel selected is Online.
Kotak Gen2Gen Protect -UIN: 107N132V01, Form No: N132, Kotak Permanent Disability Benefit Rider - UIN: 107B002V03, Form No.: B002, Kotak Critical Illness Plus Benefit Rider - 107B020V01, Form No.: B020, Kotak Accidental Death Benefit Rider - UIN: 107B001V03, Form No: B001. A Non-Linked Non-Participating Individual Savings Life Insurance Plan. Please read sales brochure carefully before concluding a sale. For more details on riders please read the Rider Brochure. You may avail of tax benefits as per the Income Tax Act, 1961 subject to conditions as specified in those sections. Tax benefits are subject to change as per tax laws. You are advised to consult your Tax Advisor for details. Goods and Services Tax and Cess, as applicable shall be levied over and above premium amount shown here as per applicable tax laws.
Kotak e-Term:UIN:107N129V02, Form No: N104, Kotak Permanent Disability Benefit Rider UIN: 107B002V03, Form No: B002, Kotak Critical Illness Plus Benefit Rider UIN: 107B020V01, Form No: B020. This is a non-participating pure protection plan. For more details on risk factors, terms and conditions, please read sales brochure carefully before concluding a sale. For more details on riders please read the Rider Brochure.
Kotak Protect India- UIN: 107N130V01, Form No: N130. This is a non-participating, pure protection, life insurance plan. For more details on risk factors, terms and conditions, please read sales brochure carefully before concluding a sale.
Kotak Term Plan:UIN:107N005V06, Form No: N005, Kotak Accidental Death Benefit Rider UIN: 107B001V03, Form No: B001, Kotak Permanent Disability Benefit Rider UIN: 107B002V03, Form No: B002, Kotak Critical Illness Plus Benefit Rider UIN: 107B020V01, Form No: B020. This is a non-unit linked, non-participating, term plan. For more details on risk factors, terms and conditions, please read sales brochure carefully before concluding a sale. For more details on riders please read the Rider Brochure.
Kotak Saral Jeevan Bima:UIN:107N120V01, Form No: N120. This is a Non-Linked Non-participating Individual Pure Risk Premium Life Insurance Plan. For more details on risk factors, terms and conditions, please read sales brochure carefully before concluding a sale.
Kotak Health Maximiser -UIN: KOTHLIP24026V012324 is a Combi Product with both protection & health benefits. It is a jointly offered product of Kotak Mahindra Life Insurance Company Limited and Kotak Mahindra General Insurance Company Limited, where protection benefits are being offered by Kotak Mahindra Life Insurance Company Ltd. under Kotak Term Plan - UIN 107N005V06, Form No. N005 and health benefits are being offered by Kotak Mahindra General Insurance Company Ltd under Kotak Health Premier – UIN KOTHLIP23109V042223. The risks of this product are distinct and are accepted by respective companies. Please refer to the Policy Document for specific details on all terms, conditions and exclusions. For more options on plans, coverages, features, premium paying term, eligibility, etc. please get in touch with the Company Representative. Please know the associated risk and applicable charges from your insurance agent or the intermediary or the policy document of the insurer. **Data as on May 2023. #Tax laws are subject to amendments from time to time. The customer is advised to take an independent view from a tax consultant. Tax benefits are subject to conditions specified under Section 80C and Section 80D of the Income-tax Act, 1961. The tax benefit is applicable as per the Income Tax Act, of 1961
The Above premium figures are exclusive of Goods and Services Tax and cess. Goods and Services Tax and Cess thereon, shall be charged as per the prevalent tax laws over and above the said premiums.
*Get your premiums back through Special Exit Value, under your policy, if your policy term is:
40 years: Earlier of 25th policy year OR during the policy year, when you attain 60 years
> 40 years: Earlier of 30th policy year OR during the policy year, when you attain 60 years
5% Discount on Salary Infographic Disclaimer:
The 5% discount is only on the first year of the policy.
**Free Medical Checkup every 5th year starting from 5th policy year onwards
Tax benefit is applicable as per the Income Tax Act, 1961. Tax laws are subject to amendments from time to time. Customer is advised to take an independent view from tax consultant.
Extract of Section 41 of the Insurance Act, 1938 as amended from time to time states: (1) No person shall allow or offer to allow, either directly or indirectly, as an inducement to any person to take or renew or continue an insurance in respect of any kind of risk relating to lives or property in India, any rebate of the whole or part of the commission payable or any rebate of the premium shown on the policy, nor shall any person taking out or renewing or continuing a policy accept any rebate, except such rebate as may be allowed in accordance with the published prospectuses or tables of the insurer. (2) Any person making default in complying with the provisions of this section shall be liable for a penalty which may extend to ten lakhs rupees.
Fraud and Misstatement would be dealt with in accordance with provisions of Section 45 of the Insurance Act, 1938 as amended from time to time. Please visit our website for more details: Read more about section38_39_45_of_insurance_act_1938.
Regd. Office:
Kotak Mahindra Life Insurance Company Ltd. Reg No. 107 | CIN: U66030MH2000PLC1285038th Floor, Plot # C- 12, G- Block, BKC, Bandra (E), Mumbai – 400051 | Toll Free: 1800 209 8800 (8 am to 10 pm) | Website: https://www.kotaklife.com | Email: kli.in/WECARE Ref No: KLI/24-25/E-WEB/897
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