Objective

This term policy aims to provide regular income in case of unfortunate demise of the breadwinner of the family.

What does it do?

This term plan aims to replace regular income in case of unfortunate demise of the breadwinner of the family. Death benefit is paid as monthly installments for the remaining policy term or minimum of 5 years. At the time of purchasing the policy, the applicant has to decide the monthly income that would be required by the family. The benefit amount increases at 5 per cent every year to take care of rising cost of living. Apart from regular and single premium payment options, the policy also offers a limited premium payment option which allows to pay premiums for a limited term (for example 5 years) and enjoy the insurance cover throughout the policy term (for example 20 years). Surrender is allowed only under single pay and limited pay options and the surrender value will be calculated on the basis of specified formula.

Pros

The policy gives premium discount to high sum assured policies, non-tobacco users and females.
The policy can be surrendered in case of an emergency.
It provides coverage for higher age of up to 70 years.
Premiums paid towards this policy qualify for taxation benefits under Section 80C.

Cons

The policy doesn't offer any riders and half-yearly, quarterly or monthly premium payment modes are also missing.

Suited for

Monthly death benefit payout makes it more apt for a family who may not be able to manage a lump sum amount.

Our View

Loss of life cannot be indemnified but insurance protection can help a family tide over financial difficulty in case the earning member dies.
The premium payment mode can be useful to those unsure of regular income inflow after a few years, or those who fear faltering in paying regular premiums.
The premium payment tenure can also be customized to suit one's wallet. This is a traditional term plan where one needs an agent to assist in buying the policy.
The policyholder must have a separate health insurance cover as there are no riders in this policy.

Eligibility

Entry Age (years)

Minimum

18

Maximum

60

Maximum Maturity Age (years)

70

Policy Term (years)

Minimum

10

Maximum

30

Sum Assured (Rs)

Minimum

Monthly benefit x 12 x Policy Term; minimum monthly benefit is Rs 15000

Maximum

No limit

Premium Payment Frequency

Single or Annual

Premium Payment Term

Single, 5-year, 10-year, 15-year and term of the plan

Policy Cover

Cover remains fixed for the tenure of the policy

Other Features

Free Look Cancellation

In case, you are not satisfied, you may choose to cancel the policy within 15 days of receiving the policy documents. Upon such cancellation, you will be paid back the premiums, minus the cost of stamp duty, medical reports and proportionate premium for the period for which the risk was covered

Grace Period

You are allowed to pay premiums within 30 days from the due date. If a due premium is not received within the grace period of 30 days, your policy will lapse and the life insurance cover will be terminated

Lapsed Policy Reinstatement

You can reinstate your lapsed policy any time (within 2 years from the due date of the first unpaid premium) by paying all the due premiums and undergoing underwriting requirements, if any

Tax Benefits

Section 80C, 10 (10D) of the Income Tax Act, 1961 would apply

Exclusions

In case of death by suicide during the first policy year, or within one year from the date of reinstatement, no death benefit is payable.