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    Term Life Insurance Final

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    searchingnobody
    Term life insurance provides coverage for a fixed period of time at a fixed rate of payments. If the insured dies during the term, the death benefit will be paid to the beneficiary. Term insurance offers the least expensive way to purchase substantial life insurance coverage for a specific period of time. Term policies can be renewable or convertible to permanent policies without evidence of insurability. Term life insurance is often used to cover temporary needs like debts and changing responsibilities throughout life.

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    Term Life Insurance Final

    Uploaded by

    searchingnobody
    87 views10 pages
    Term life insurance provides coverage for a fixed period of time at a fixed rate of payments. If the insured dies during the term, the death benefit will be paid to the beneficiary. Term insurance offers the least expensive way to purchase substantial life insurance coverage for a specific period of time. Term policies can be renewable or convertible to permanent policies without evidence of insurability. Term life insurance is often used to cover temporary needs like debts and changing responsibilities throughout life.

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    Term life insurance provides coverage for a fixed period of time at a fixed rate of payments. If the insured dies during the term, the death benefit will be paid to the beneficiary. Term insurance offers the least expensive way to purchase substantial life insurance coverage for a specific period of time. Term policies can be renewable or convertible to permanent policies without evidence of insurability. Term life insurance is often used to cover temporary needs like debts and changing responsibilities throughout life.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    87 views10 pages

    Term Life Insurance Final

    Uploaded by

    searchingnobody
    Term life insurance provides coverage for a fixed period of time at a fixed rate of payments. If the insured dies during the term, the death benefit will be paid to the beneficiary. Term insurance offers the least expensive way to purchase substantial life insurance coverage for a specific period of time. Term policies can be renewable or convertible to permanent policies without evidence of insurability. Term life insurance is often used to cover temporary needs like debts and changing responsibilities throughout life.

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    of 10

    Term Life Insurance

    SUBMITTED BY:

    Class:MBA IV A

    SUBMITTED TO:
    Term life insurance

    Term life insurance or term assurance is life insurance which provides coverage at a fixed rate
    of payments for a limited period of time, the relevant term. After that period expires coverage at
    the previous rate of premiums is no longer guaranteed and the client must either forgo coverage
    or potentially obtain further coverage with different payments and/or conditions. If the insured
    dies during the term, the death benefit will be paid to the beneficiary. Term insurance is the least
    expensive way to purchase a substantial death benefit on a coverage amount per premium dollar
    basis over a specific period of time.

    Some term policies are renewable, which means that the policy can be renewed at the end of the
    term for a similar period without the insured having to show evidence of insurability. Evidence
    of insurability generally consists of a medical exam or doctor’s statement regarding the insured’s
    satisfactory health status (in other words, no physical examination is required). The premium of
    the renewal is based on the insured’s age at the time of the renewal. Term policies may also be
    convertible; convertibility allows the policy owner to convert the temporary protection of a term
    policy to permanent protection without evidence of insurability.

    Term policies are defined by the way their face values change during the life of the policy. A
    level term policy’s face value and premium remain the same throughout the policy’s term.
    Considering a 5-year term policy for $50,000, for example, both the face value and the premium
    remain constant during the entire 5-year period.

    The face value of a decreasing term policy decreases throughout the life of the policy down to
    zero at the date of policy expiration. The premium remains the same. Decreasing term is
    commonly used to cover a home mortgage. The value decreases at the same rate as the loan
    balance; thus, if the insured were to die, the mortgage would be paid off.

    Increasing term insurance is the opposite of decreasing term: the face value increases over the
    life of the policy, while the premium remains the same. This type of term insurance is not used
    nearly as often as level- or decreasing term.

    Because term insurance is temporary protection, it’s often used to cover temporary needs, such
    as debts. Other advantages are its initial low cost, making it suitable for people with a large need
    for insurance but with limited financial resources. Term insurance can also be flexible; it can be
    used to provide additional protection for the insured. Needs and responsibilities change
    throughout a person’s life; term polices can be used to cover those needs when they are at hand.
    Features of Term Life Insurance
    Term life insurance is the simplest form of life insurance. Some of its basic features are:

     Low premiums: The premium associated with this policy is the lowest, and hence most
    affordable, as compared to other life insurance policies.
     Policy can be renewed: After the end of the term of this policy, a policyholder may opt to
    renew it for a specific period.
     Premiums are not fixed: Every time a term life policy is renewed, the insurance company
    is sure to raise the premium of the policy. Moreover, a company can revise the premiums
    of this policy, based on certain factors.

    Types of Term Insurance

     Straight Term /Temporary

     It is type of term insurance in which which is for the period of two years from the date of
    commencement of the policy

     Premium is to be paid once at the outset

     Medical examination fees is to be paid by the proposer

     Renewable Term Policy

     Type of term insurance which has to be renewd after the expiry of the specified period for
    an additional period without undergoing the medical tests again

     Premium will be altered according to the age of the insured personality

     Convertible Term Policy

     It is type of insurance which is converted into whole life insurance o endowment plan
    after certain period of the term defined in the policy
    TERM INSURANCE PLANS

    Company SBI LIFE INSURANCE


    Plan SwaDhan
    SBI Swa Dhan is non participative term insurance plan which aims at the customer
    Overview
    satisfaction along with the fulfillment of risk of the death cover.
    Min. Entry
    18 years
    Age
    Max. Entry
    65 years
    Age
    Term 5-10 years
    1). Premium of Rs 6,098PA.
    2). You get a cover ranging from Rs 3 lakhs to Rs one crore in the nominations of
    Rs 10000.
    3). Provides you high life cover at low risk.
    Features
    4). In case of death of the life assured during the policy term, the nominee receives
    the sum assured under the policy.
    5)get a 2% rebate on yearly payments and 1% of premium rates on half yearly
    6)additional of 5% rebate in case of woman
    Tax Benefits Tax benefits are available as per prevailing tax laws.
    Company Life Insurance Corporation of India
    Plan Amulya Jeevan
    LIC’s Amulya Jeevan is pure Term Plan. In case of unfortunate death of the Life
    Overview Assured during the term of the policy, Sum Assured is payable, provided the policy
    is kept in force.
    Min. Entry
    Minimum- 18 years
    Age
    Max. Entry
    Maximum- 60 years
    Age
    Term 5 - 35 years
    1). Minimum Sum assured is 25 Lacs for the policy.
    2). The plan pays a sum assured to your nominee in case of your unfortunate
    demise.
    Features
    3). Premiums can be paid Yearly, Half-yearly or by Single Premium mode.
    4). Lapsed policy can be revived within a period of 5 years from the date of first
    unpaid premium but before the date of maturity
    Tax BenefitsTax benefit available under section 80C of the Income Tax act.
    Company ICICI Prudential Life Insurance
    Plan IProtect
    ICICI Prudential Life Insurance has launched ICICI Pru iProtect - a term insurance
    plan that you can buy online at your convenience. You can now secure your family’s
    Overview
    future at the click of a button and can even customize this term plan according to
    your insurance needs.
    Min. Entry
    Minimum- 20 years
    Age
    Max. Entry
    Maximum- 65 years
    Age
    Term 10 - 30 years
    1). The Plan is available to purchase online only.
    2). Life Insurance cover at extremely affordable premiums.
    Features 3). Special Premium rates for Non-Tobacco users.
    4). No Maturity Benefit.
    5). No Loan available against this policy.
    Tax
    Tax benefit available under section 80C of the Income Tax act, 1961.
    Benefits
    Company Birla Sunlife Insurance
    Plan Term Plan
    BSLI's Term Plan is a low premium, pure risk coverage plan, which takes care of
    Overview your financial commitments and secures your family's future should anything
    unfortunate happen to you.
    Min. Entry
    18 years
    Age
    Max. Entry
    55 years
    Age
    Term 5 - 25 years
    1). You can invest minimum Rs2,007 p.a
    2). Accidental Death and Dismemberment Rider and Critical Illness Rider, Waiver
    of Premium Riders available, but only at the time of purchase of policy.
    3). In case of the unfortunate death of the life insured during the term of the plan, an
    amount equal to the Sum assured is paid to the beneficiary.
    Features
    4). The plan offers attractive rebate for face value amounts equal to or greater than
    Rs. 5 Lakh for regular pay. In case of single pay, this rebate is available for amount
    greater than or equal to Rs. 7 Lakh.
    5). Premium payment can be done Annual, Semi-annual, Quarterly, Monthly, and
    Single.
    Tax
    Tax benefit available u/s 80C & 10(10D) of Income Tax Act.
    Benefits
    ADVANTAGES
     Cost
    The obvious advantage of taking a term life insurance policy over a whole life insurance
    policy is the cost. Often a term life insurance policy will cost you hundreds of dollars a
    year but a similar whole life insurance policy can cost as much as thousands. In fact,
    there are some term life insurance policies that will cover you to the value of $100,000
    over a ten year term that cost less than ten dollars a month. Obviously, similar factors are
    taking into consideration when applying for term life insurance as they are when applying
    for whole life insurance; factors such as health, family history, lifestyle and age.

     Flexibility
    Term life insurance offers you a greater level of flexibility over it's whole life insurance
    counterpart. For less money you are able to take out short 10, 20 or 30 year plans and you
    are able to determine the exact level of cover that this offers. You may have a 4-year-old
    son and a partner who has opted to stay at home and look after him. Right now he is
    dependant on your earning money to feed, clothe and care for him but in twenty years he
    will have finished school, finished college and hopefully got himself a job. This means he
    is no longer your dependant and you may not need to make financial allowances for him
    in your life insurance. Alternatively, your mortgage may expire in ten years. You won't
    need to pay to cover your mortgage once it has been fully paid up.

     Investment
    A term life insurance policy costs you hundreds, even thousands, of dollars a year less
    than a whole life insurance policy. This means that you can invest your money yourself
    instead of relying on the insurance company to do so. Insurers are typically very
    conservative when investing your money, so by taking a term life insurance policy you
    are able to be a little less strict over the type of investment you choose affording you a
    greater potential to make more money.
    DISADVANTAGES

     Return on investment:
    Most term policies will only pay if the holder dies while the policy is ongoing. An individual can
    make all of their premium payments for the designated number of years and see no return if they
    survive their insurance. The exception here is return of premium insurance where they will, at
    least, get their premium payments refunded when their coverage ends but this may come at a
    higher cost.

     Re-insuring difficulties:
    Some people get to the end of a term policy and find that they do wish/need to carry on insurance
    coverage. If they don't have the option to renew then they may need to buy a new policy which
    can be difficult and more expensive as they get older.
    References

     Ghosh P.K., Insurance & Risk Management

     www.policybazaar.com

     www.aegonreligare.com/

     www.lifeinsurancewiz.com

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