Human beings by nature are optimistic and we rarely think of negative outcomes in our thoughts about tomorrow. Death is a word that probably scares us. However, even if we were to live forever, the fact is that the other two Ds – Disability and Disease- may still be perils we wish to insure against!
We cant have it all, can we!
Term Insurance- The Purest Form of Insurance
A plain term insurance product life covers the insured person for a specific sum – agaisnt the risk of mortality /death – and for a specific tenure. If the policyholder dies during the term, the
life insurance company
will pay a death benefit to the beneficiaries. As simple as that.
Now these plans go a step further – A variant plan helps you protect yourself even better by covering not only mortality or death but also Disease and Disability and how you choose to receive money.
Amongst the key features are :
1) Low Premium : A term insurance plan can be subscribed to at a very low premium cost and is very affordable : A 1 Cr cover for a healthy 40 year old opting for a 15 year term may not even cost Rs 20,000 per annum!
Typically the premium is about 0.1%-0.3% of the sum assured- which is hardly any price to pay for the permanent security of your family!
2) Riders Including Critical Illness, Disability etc : One can add riders to protect against other specific contingencies including critical illnesses.If unfortunately, any person is diagnosed with a disease whose treatment may be on the expensive side or meet with an accident that may render one disabled, the
Term insurance plans
offer the payout.
In addition, there are variants on how payouts can be received – these can be customised as per your needs, whether it be a lump sum payout or divided monthly.
3) 80C and 80 D Tax Benefits: It is further beneficial as the premium you pay towards it is exempted from Income Tax as well. Tax benefits are available on premiums paid under Section 80C in all plan options and 80D in Life & Health or All-in-one plan options b. No Tax to be paid on claim amount under Section 10(10D).
4) Get your Money Back : Are you one of those who always want your money back? Return of Premium variants can attach this benefit to the plans to get full invested premium back on maturity of policy.
How Much and How Long
A basic thumbrule in insurance is that one should insure at least 10x -15x the annual income earned – The rationale being that even at 5% post tax returns, a simple family may be able to lets say earn Rs 10 lakh on a Rs 2 crore policy (which is 10x of 20 lakh, the salary an average Indian professional will earn in a metro), In addition, you should also add the value of your liabilities that need to be paid back – loans, mortgages, discounted value of large expenses due to marriage etc.
The ideal policy term you should select is your expected retirement age minus current age.
The Checklist : Is Term Insurance for you?
Step 1) Check how much life insurance you have
Step 2) Subtract your liabilities from above
Step 3) Subtract specific goal amounts from above like education, marriage etc
Step 4) Check if the remaining amount of life insurance is at least 10 times your annual salary!
If Step 4 results in a shortfall – YES- YOU NEED TERM INSURANCE.
The need is even more if you are prone to diseases, or are a single earner member of the family. There is no tomorrow in that case!
If your income stream is high risk or uncertain, and you have loans, evaluate the need for an adequate cover with our counselors immediately. Time wont wait so no use dilly dallying.
How PL Distribution Helps
PL Distribution is a Corporate Agent for ICICI Prudential, HDFC Life and Bajaj Allianz Life. Our tieup takes into account the following criteria before recommending an insurer :
- Scale and Size of Operations and Premia versus competition
- Range of Options Available and Riders in each category
- Claim Settlement Ratio
- Average Time to Claims Settlement
- Ease of access of insurance / No medicls or telemedicals
- Service Commitment to PL Distribution – Hub and Spoke
- Size of National Network
- Financial Strength and Solvency Ratios
- IRDA Penalty Track Record
As a second step, we then choose the best plans from these insurers which are not only reasonable and affordable but also are popular with clients – reflected by low surrender, high persistency and large volumes.
Our Favorite Plans
As per various industry rankings and surveys, 3 names you will always find as being amongst the best insurance plans include
- ICICI Pru I Protect Smart
- HDFC Click2Protect 3D Plus
- Bajaj Etouch Online
I Protect Smart is ICICI’s largest online selling plan while Click2Protect won the Best Term Plan 2019 Award by BT-MT 2019.
Key Feature Summary
| HDFC Life | ICICI Pru | Bajaj Allianz | |
| Cover Upto Age 85 | Yes | Yes | No |
| Option to Increase Cover | Yes | No | Yes |
| Early Claim on Terminal Illness | Yes | Yes | Yes |
| Waiver on ATPD (Disability Waiver) | Yes | Yes | Yes |
| Option for Return of Premium | Yes | Yes | No |
| Option for Whole Life Cover | Yes | Yes | No |
| Critical Illness Benefit | Yes | Yes | No |
Salient Features Plan wise
Note: ICICI and HDFC Plans come with a Return of Premium Variant as well apart from many rider options
ICICI I Protect
_Option to provide health cover against 34 critical illnesses. It gives claim payout on first diagnosis of any of the covered 34 Critical Illnesses. No Hospital Bills required.
_Guaranteed renewal and constant premiums, unlike health plans where premia increase with age
_Life Cover extended upto 85 years of age: Whole life option available
_Accidental death benefit till 80 years of age
_Guaranteed amount paid upto total CI benefit irrespective of the actual expenses
_4 variants to make payouts flexible
Illustrative Table of Premium for Healthy Person- I Protect
| Age | Life Cover (₹) | Policy Term | Annual Premium (₹) |
| 30 years | 50 Lakh | 45 years | 7,088 |
| 30 years | 1 Crore | 45 years | 12,970 |
| 35 years | 50 Lakh | 40 years | 8,590 |
| 35 years | 1 Crore | 40 years | 15,758 |
HDFC Click2Protect
_Customize your plan with a choice of 9 plan options for flexible receipt of proceeds
_All future premiums are waived on Accidental Total Permanent Disability( available under all options ) and on diagnosis of Critical Illness (Available with 3D Life and 3D Life Long Protection options)
_Protect yourself for whole of life with lifelong protection option
_Flexibility to choose your policy and premium payment terms
_Life Stage Protection feature offers to increase insurance cover on certain key milestones without medicals
_Attractive premium rates for non-tobacco users
BALIC ETOUCH ONLINE
A Pure Term Insurance Plan
Premium starts at Rs 1,003 / month
Riders include Life cover, Accidental cover, Critical illness cover, Waiver of premium
This Term plan provides life cover combined with benefits on Accidental Death, Accidental Total Permanent Disability and Critical Illnesses and benefit of Waiver of Premium, depending on the variant opted by you.
The nominee will have the option to take the Life Benefit only or the Accidental Death benefit only or both either in lump sum or in monthly instalments.
Get in touch
We invite you to understand more about these term plans by emailing us at insurance@plindia.com. Our Insurance teams will assist you in understanding your needs and then recommending the right combination of features from amongst the three life insurers we work closely with.
In addition, you may ask us for any other literature you may wish to review or for meetings with personnel from the insurers by mailing us at the email id above.
