A guide to buying term life insurance on PhonePe
Term life insurance is a pure protection policy that secures your dependents financially in case of your premature death. It covers you for a fixed policy period ranging from five years to 80 years. Term insurance is one of the most affordable life insurance products available in the market with its low premiums. Here's how you can buy a term life insurance plan on PhonePe.
First, let's comparing term life insurance with 1-year term plans
Both term life insurance and one-year term plans cover premature death during the policy period, but they differ in many ways. A one-year term plan covers a single year, while regular term plans can go up to 80 years or even provide lifetime protection, depending on the plan you pick. Premiums can vary every time a one-year policy is renewed, but term plans have fixed premiums that don't change during the policy period.
Medical underwriting and term insurance plans
Medical underwriting is another area where these two types of insurance policies differ. Usually, one-year term life insurance plans don't require medical underwriting. However, this isn't the case for regular term plans which often involve a detailed health assessment before issuing a policy. This process allows insurers to determine the risk level associated with insuring an individual and set appropriate premium rates accordingly.
Affordability and flexibility: Key benefits of term insurance
Term life insurance is popular for its affordability and flexibility. Unlike other life insurance products that come with savings and bonus elements, term insurance provides a high cover at low premiums. Policyholders can select their coverage period, with some insurers even providing extended ones till 99 or 100 years. Further, some term plans even allow disbursing the sum assured monthly, replacing the insured's income for their family.
Term insurance offers tax benefits and financial security
Term life insurance also offers tax benefits under the Indian Income Tax Act, 1961. Premiums paid toward term insurance qualify for tax deduction under Section 80C every year. Additionally, any payout received on the policyholder's death is completely tax-exempt under Section 10(10D). Apart from these fiscal benefits, term plans guarantee your family's financial stability by ensuring they get a lump sum in case of your death. This amount can take care of daily expenses without any compromises.
What does term insurance cover and exclude?
Term life insurance covers deaths due to illness, natural causes, natural calamities/disasters, and accidents. However, it doesn't cover death by suicide within a year of buying/reviving a policy. In such cases, if the insured commits suicide within a year of buying the policy, the premium is refunded. If suicide is committed within a year of revival, more than 80% of premiums paid/surrender value is refunded.
How to buy term life insurance on PhonePe
Open the PhonePe app and navigate to the "Insurance" category. Select "Term Life" to explore available plans. Enter your date of birth and annual income to receive a recommended coverage amount. Based on this information, PhonePe will suggest a suitable coverage amount, say ₹2 crore. Next, choose your desired coverage period and provide additional personal details to view available plans. Once you've selected a plan, input your address details and complete the payment to secure your term life insurance coverage.
