- High coverage at a low premium
- Financial protection for your family’s future
- Tax benefits up to Rs. 46,000`` under Section 80C and 10(10D)
- Dedicated claim assistance
- Customisable plans to suit your needs
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In summary
Key highlights:
- Sum assured is the amount your nominee receives if you pass away during the policy term, subject to the policy terms and conditions.
- Premium is the amount you pay to keep your policy active.
- Pure term insurance does not provide a maturity benefit if you survive the policy term.
- Riders are optional benefits that can enhance your coverage for an additional premium.
- Policy term and premium payment term are different and should not be confused.
Understanding these terms before purchasing a policy can help you compare plans with confidence and choose life cover that matches your financial goals. Explore plans and get a personalised quote based on your protection needs.
What are the common terms used in term insurance?
Importance of term insurance
Here's a quick glossary of some of the most commonly used term insurance terms.
| Term | What it means |
|---|---|
| Sum assured | The amount paid to your nominee if you pass away during the policy term, subject to the policy terms and conditions. |
| Premium | The amount you pay to keep your policy active throughout the premium payment term. |
| Policy term | The period during which your life insurance cover remains active. |
| Premium payment term | The duration for which you pay premiums. It may be the same as or shorter than the policy term, depending on the plan. |
| Policyholder | The person who purchases and owns the insurance policy. |
| Life assured | The individual whose life is covered under the policy. In many cases, the policyholder and life assured are the same person. |
| Nominee | The person chosen to receive the policy benefits if the life assured passes away during the policy term. |
| Rider | An optional benefit that enhances your policy coverage for an additional premium. |
| Grace period | The extra time allowed to pay an overdue premium before the policy lapses, as per the policy terms. |
| Free-look period | A specified period during which you can review your policy and cancel it if it does not meet your expectations, subject to the insurer's terms. |
| Underwriting | The insurer's process of assessing your age, health, occupation, lifestyle, income, and other risk factors before issuing the policy. |
| Claim settlement | The process through which the insurer evaluates and settles a valid insurance claim made by the nominee. |
Knowing these terms can help you understand policy documents more easily and avoid confusion while purchasing or managing your term insurance plan.
Before choosing a policy, compare the coverage, premium, and policy features to find a plan that suits your financial goals. Get quote through Bajaj Finance Insurance Mall and choose a suitable plan to secure your family.
Term insurance vs whole life insurance: What's the difference?
Understanding these differences can help you choose the type of life insurance that aligns with your financial goals.
| Feature | Term insurance | Whole life insurance |
|---|---|---|
| Coverage period | Fixed policy term | Lifelong coverage or up to the age specified in the policy |
| Purpose | Financial protection for your family | Long-term life cover with policy benefits depending on the plan |
| Premium | Generally lower | Generally higher |
| Cash value | Not available in pure term insurance | May build cash value depending on the policy |
| Survival benefit | Not available in pure term plans | Depends on the policy terms and conditions |
If your primary objective is to provide financial protection for your family during your earning years, term insurance is often the preferred choice. If you are looking for lifelong coverage with additional long-term policy benefits, you may consider a whole life insurance plan based on your financial goals.
Compare different life insurance plans to choose a plan that matches your financial responsibilities and long-term protection needs.
Which riders can you add to a term insurance plan?
The riders available depend on the insurer and the policy you choose.
| Rider | How it helps |
|---|---|
| Critical Illness Benefit | Provides financial support if you are diagnosed with a specified critical illness, subject to the policy terms and conditions. |
| Accidental Death Cover | Offers an additional benefit if death occurs due to an accident, as defined in the policy. |
| Accidental Total Permanent Disability Benefit | Provides financial support if the life assured suffers permanent disability due to an accident, subject to policy conditions. |
| Waiver of Premium Benefit | Waives future premiums under specified conditions while allowing the policy benefits to continue. |
Choosing suitable riders depends on your lifestyle, occupation, health, and financial responsibilities. Since every rider increases the premium, it is advisable to select only those that address your specific protection needs.
For example:
- If you travel frequently, an accidental cover rider may be useful.
- If your family depends on your income, a waiver of premium benefit can help maintain the policy under specified conditions.
- If you are concerned about major medical expenses, a critical illness rider may provide additional financial support.
Review the rider benefits and exclusions carefully before adding them to your policy.
Understanding rider options can help you customise your life cover. Compare plans to see which optional benefits are available for your profile. Get quote!
What is TROP in term insurance?
A pure term insurance plan provides a death cover if the life assured passes away during the policy term. If the policyholder survives the term, no maturity or survival benefit is payable.
A TROP plan, on the other hand, offers life cover along with the return of eligible premiums paid if the policyholder survives the policy term, subject to the policy's terms and conditions.
Here's a quick comparison:
| Feature | Pure term insurance | TROP |
|---|---|---|
| Life cover | Yes | Yes |
| Death cover | Yes | Yes |
| Return of eligible premiums on survival | No | Yes, subject to policy terms |
| Premium | Generally lower | Generally higher |
A TROP plan may appeal to individuals who prefer receiving eligible premiums back if they survive the policy term. However, because of this additional feature, the premium is generally higher than that of a pure term insurance plan.
Before choosing between the two, compare the premium, benefits, and your financial objectives to determine which option better suits your needs.
Compare pure term insurance and TROP plans to understand which option aligns better with your protection goals and budget. Get quote!
Conclusion
Understanding term insurance terminology can make it much easier to compare policies and choose the right life cover for your family's needs. Knowing the meaning of terms such as sum assured, premium, policy term, nominee, and riders helps you understand what your policy covers and what to expect during the policy's lifecycle.
It is equally important to understand the difference between pure term insurance and Term Insurance with Return of Premium (TROP), as well as how term insurance differs from whole life insurance. This allows you to select a plan that aligns with your financial goals, budget, and long-term responsibilities.
Before purchasing a policy, review the policy features, optional riders, eligibility criteria, and exclusions carefully. Comparing plans and understanding the terminology can help you make an informed decision and choose life cover that provides financial security for your loved ones.
Ready to choose the right life cover? Compare term insurance plans, assess your coverage needs, and get a personalised quote based on your financial goals.
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Frequently asked questions
Term insurance terminology
What does 'sum assured' mean in term insurance?
The sum assured is the amount your nominee receives if you pass away during the policy term, provided the claim is admissible under the policy's terms and conditions. When choosing the sum assured, consider factors such as your income, outstanding liabilities, future financial goals, and the financial needs of your dependants to ensure your family has adequate financial protection.
What is the difference between term and whole life insurance?
Term insurance provides life cover for a fixed policy term, while whole life insurance offers lifelong coverage or coverage up to the age specified in the policy, depending on the insurer and the plan. Pure term insurance focuses on financial protection and generally has lower premiums, whereas whole life insurance may include additional long-term policy benefits depending on the policy terms.
Which riders can you add to a term insurance policy?
Depending on the insurer and the policy, you may be able to add optional riders such as Critical Illness Benefit, Accidental Death Cover, Accidental Total Permanent Disability Benefit, and Waiver of Premium Benefit. These riders provide additional protection for specific situations and are available for an additional premium, subject to the policy terms and conditions.
Why is it important to understand term insurance terminology?
Understanding term insurance terminology is crucial for making informed decisions about the policy that best suits your needs. Terms like sum assured, premiums, maturity benefits, and riders directly impact the policy's coverage, cost, and flexibility. Familiarity with these terms helps ensure you choose the right policy, avoid misunderstandings, and ensure adequate financial protection for your family, helping you avoid surprises during the policy’s duration.
