Should I opt for a term insurance plan if I already have a company cover?

It is important to have your own term insurance cover regardless of what your company provides. This is because the cover offered by your company may be around one or two times your compensation package. This amount is not adequate in the long run. Depending on your age and financial responsibilities, your term insurance cover should be between 7 to 20 times your compensation package. Another factor to consider is that if you delay taking a term insurance cover, you may have to pay a larger premium at a later stage. Insurance companies charge a higher premium amount as the customer's age increases.

Do term insurance plans offer tax benefits?

Benefits under Section 80C You can avail tax deduction on term insurance premiums of up to ₹1.5 lakh per year. This benefit is available on premiums you have paid for yourself, spouse or children. Benefits under Section 80D You can avail a tax deduction of Rs. 25,000 per year on health insurance premium payments. However, you can also avail tax benefits under this section on your term insurance premium payments in case you have taken additional riders. This includes riders such as surgical care, hospital care and critical illness. Note that the tax benefits are available only on the riders. Benefits under Section 10(10D) This is applicable on the benefits one receives under the term insurance policy. This can include maturity benefits or death benefit. All benefits payable are completely exempt from taxation. Read more about Top 5 Benefits of Term Insurance

What is the right time to purchase a term insurance cover?

You should try and purchase a term insurance cover as soon as you begin earning a regular income. The number of dependents you have is another big factor to consider before purchasing a term insurance policy. For instance, people in their thirties are prone to have many dependents (spouse, children, retired parents, and so on). In case you have many family members depending on your income, you should purchase a term insurance cover right away so that they don't have any financial difficulties in your absence.

Is natural death covered under a term insurance plan?

Yes. Natural death is covered under a term insurance plan. Death from natural causes generally includes: death due to old age, illness, heart attack or stroke.

Term Insurance Calculator: Calculate Term Plan Coverage Online

Q: What is Term Insurance ?

Term insurance is a type of life insurance that helps you protect your family when you are not around. This is a policy where you pay a premium and the insurance provider offers coverage for a certain 'term'. You can choose a term between 5 to 40 years depending on your requirements. This is a low-cost life insurance plan that is easy to understand. Purchasing a term insurance policy can be very useful because it offers financial compensation to your dependent family members. This way, their financial life can be secure even in case of your untimely demise.

What is Term Insurance

Term insurance is a life insurance policy that promises to pay a specific sum of money to the nominee upon the demise of the policyholder. This is a low-cost life insurance plan and it is very useful because it offers financial compensation to your dependent family members. This way, their financial life can be secure even in case of your untimely demise. Generally, insurance companies in India offer a policy term between 5 to 40 years.

Benefits of Term insurance
Understanding the uses of a Term Insurance Calculator
How to use ET Money Term Insurance Calculator

Benefits of Term insurance

There are benefits of purchasing a term insurance policy. Here are some of the most popular benefits:

High sum assured at affordable premiums The premium payable on term insurance policies is very affordable. In fact, term insurance plans have the lowest premiums compared to endowment policies and other traditional life insurance policies. This allows you to take care of your family's financial future in your absence in an affordable manner.
Income Tax benefits Term insurance plans also offer you tax benefits. There are three different ways you can avail tax benefits by purchasing a term insurance plan:
- High sum assured at affordable premiums Under Section 80C of the Income Tax Act, premium payments of up to ₹1.5 lakh are eligible for tax deductions every year. You can avail this benefit on premium payments for yourself, spouse and children.
- Section 80D In case your term plan includes any add-on riders like hospital care rider, surgical care rider or critical illness rider, you can avail a maximum tax deduction of ₹25,000 per year on premium payments for these riders.
- Section 10(10D) In case of the unfortunate demise of the policyholder, the maturity benefits are totally tax free under Section 10(10D). The entire amount payable to the beneficiaries is totally tax-free. This comes without any upper limit on the amount.
Claim settlement assurance You can be certain of a claim settlement provided that your policy is in force for a period of three years and you have declared all your information correctly.
Easy policy customisation options As the policyholder, you have the complete freedom to choose the policy term, amount and any extra benefits as per your budget and requirements.
Free cancellation available When you purchase the policy through the ET Money App, you also have a 15-day free cancellation option in case you are still unsure about the policy.

Understanding the uses of a Term Insurance Calculator

A term insurance calculator is an online tool that helps you calculate the coverage amount necessary as per your requirements. The calculator is simple to use and can be very helpful when you plan to purchase a term insurance plan. When you use the ET Money Term Insurance Calculator, you just need to provide a few necessary inputs. The calculator then tells you how much coverage you require to adequately protect your family. It also recommends the best policies offered by different insurance providers.

How to use ET Money Term Insurance Calculator

Using a term insurance calculator is very easy. Here is how you can do it in three simple steps.

Step I: Input necessary details

You will need to input details such as your age, your retirement age, your annual income and your existing life insurance cover (in case you have any).

Step II: Input financial details

Next, you need to input details of all the different assets and liabilities to your name. For instance, if you have invested in mutual funds, you need to tick the box next to it and also input the invested amount. Similarly, in case you have taken an education loan of ₹10 lakh, you need to tick the box and provide the details. This information is used to find the optimal cover for you.

Step III: Final step, in which we show how much coverage you require

Once you click on the 'Continue' button in step two, you are shown how much term coverage you require based on your inputs. This is a personalized term cover tailored on your specific requirements. The ET Money term insurance calculator also provides you with recommendations of term insurance plans. You can choose the best option among these plans based on your needs.