1. What is a term insurance plan?

Term insurance plan is a form of life cover, it provides coverage for defined period of time, and if the insured expires during the term of the policy then death benefit is payable to nominee. Term plans are specifically designed to secure your family needs in case of death or uncertainty. It provides specific amount of coverage for specific period of time.

2. Why is the preimums charged for taking a Term Insurance Policy very low?

The premiums for Term insurance policies are the lowest among all the types of life insurance policies. The premiums are low since there is no investment component and the entire premium goes for covering the risk. So if the policy holder expires during the insured term, the death benefit is paid to the nominee. There is no survival or maturity benefit once the policy term expires. There may be some plans that offer to return the premiums paid by the policy holder if he survives.

3. How to choose a best term plan?

To choose best term plan you should consider important factors like:

1. How good is the insurance company

2. How much cover do you need

3. Check the claim settlement ratio

4. The factors of inflation in paying the premium and coverage benefits

5. Compare the terms and conditions of various insurance companies

6. You can take two term insurance plans from two different insurance company, it will save you in case of rejection of claim from one of either two companies

7. Do not just look for the low term insurance plan as they might be an important factor but may have several conditions attached for the time of claim

8. You can also go for an online or offline term plan

4. Is there much difference in premium across term plans?

The premium in the term plan could vary from one company to another and as the tenure of your policy increases, the premium for the same sum assured increases.

5. Are there any eligibility criteria for term insurance plan?

The eligibility criterion for term insurance plan varies according to the insurers, the minimum age of entry is 18 years and the maximum age limit is 65 years.

6. Do term insurance plan have an option to convert it to other traditional plans?

The convertible option is provided to you in term insurance plan, and you can convert it to the whole life insurance policy or the endowment plan any time during policy tenure without additional charges.

7. If I missed a premium, is there a chance that my policy may lapse?

If you miss the premium then the first thing is to know the status of your policy through your agent or insurance company. According to Life Insurance Corporation of India (LIC) a grace period of 30 days is allowed where the mode of payment of premium is yearly or half yearly and 15 days in case of monthly payment.

8. What are the smokers and non-smokers criteria in the term plan?

It includes the smokers or users of any tobacco products, such as chewing tobacco etc. Some smokers who have quit smoking are also eligible for favourable premiums. However the period varies among insurers.

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LIC'S TERM INSURANCE PLANS