What is Term Life Insurance this is what i am going to explain you in simple terms. Its oldest and cheapest form of insurance and has many benefits along with it.

• By opting for a pure life cover known as term insurance
• By taking life cover along with saving component built in called as endowment insurance

What is Term Insurance

• Term insurance is a type of life insurance in which it covers a certain period of your life.
• If the insured dies the amount or death benefit will be given to the nominee.
• If the insured remains till the policy term, no amount is given.
• Th main purpose of term insurance is to provide the cover to your family on a very minimum premium(Fixed rate of payments)

Advantages of Term Insurance

• Simplicity (Much easier to understand than endowment plans)
• Competitive pricing(can be easily compared)
• Flexibility
  • Opt out any time, just stop paying your premium
  • You can add accident cover, disability benefit etc. (depends on insurance company plan)
• Tax Benefit
• Lowest Premiums
  • Provides financial security at lowest cost for your family

Limitations of Term Insurance

• Premium of the insurance increases if you take the policy in higher age
• You cannot take insurance after 65 or 70 depends on the company providing insurance
• It will not serve your purpose of saving money or wealth creation not possible
• No surrender benefit or loans are available under these policies
• You cannot renew them if for any reason you become uninsurable

Point to be noted before taking term insurance

• How good is the insurance company
• How much cover do you need
• Check CSR(Claim settlement ratio)
• Compare terms and conditions with various insurance companies
• It’s advisable to take two term insurance from two different companies – separate polices if one claim is rejected we can have another
• Do not miss the premiums(Some companies like LIC provides 30/15 Days grace period to deposit the premium other may not)
• If you are smoker the premium will be more.
• Consider inflation in mind
• Consider Add-ons

Documents Required for Term Insurance

• PAN card.
• Proof of age (passport/birth certificate/driving licence/PAN card etc.)
• Proof of address (utility bills/ration card/bank account statement/voter’s ID card/passport).
• Proof of identity (passport/voter’s ID card/Aadhaar card/driving licence/letter from a public servant or authority verifying identity).
• Proof of income (Income tax return/employer’s certificate/Income Tax assessment order).
• Recent passport sized photographs.

Exclusions for Term Insurance Plans

• Suicide
• Death due to war, terrorism drought: Natural calamities
• Death due to actions by the insured: Death by opting for extreme sports etc.
• Death due to intoxication or narcotics: consumption of drugs, alcohol etc

Claim Process

• Intimate the insurer regarding the claim
• Document submission: original insurance document, proof of the claim, death certificate, medical records etc. as required.
• Decision on the claim: Once the documentation has been submitted and verified, the insurer will take a decision on whether the claim will be honoured based on the documentation provided.