TERM INSURANCE FAQS
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- The premium terms generally vary between smokers and non-smokers. Premiums are typically higher for smokers as they are considered high-risk due to potential health issues related to smoking.

2. How does a term insurance plan vary from an accidental insurance plan?

- An accidental insurance plan provides benefits only if the policyholder dies due to an accident. In contrast, a term insurance plan provides benefits for death due to any reason, whether natural or accidental.

3. Can the premiums change after a period of time?

- Premiums can change due to several factors, such as the addition of riders, changes in personal habits (e.g., starting smoking), or changes related to hazardous employment. Any significant change in risk profile can affect the premiums.

4. How does term insurance differ from life insurance?

- Life insurance policies often include maturity benefits, meaning the policyholder receives a payout if they outlive the policy term. Term insurance, on the other hand, provides only death benefits to the nominee if the policyholder dies during the policy term and generally includes no maturity benefits.

5. Are there no maturity proceeds available with term insurance?

- While traditional term insurance does not include maturity proceeds, some modern policies offer a return of premium option. This option allows the policyholder to receive the premiums paid back at the end of the term. However, this feature typically results in higher premiums.

6. Is the death of the insured person covered if she/he dies outside Indian Territory?

- Yes, term insurance generally covers the policyholder's death regardless of where it occurs, including outside India, unless explicitly excluded in the policy terms.

7. Can multiple claims be entertained?

- Multiple claims from different insurers can be entertained, provided these claims and their specific nature were disclosed when purchasing the policies. Each insurer will process the claim according to their policy terms.

8. Are NRIs eligible for purchasing term insurance in India?

- Yes, Non-Resident Indians (NRIs) who hold dual citizenship and qualify as citizens of India are eligible to purchase term insurance in India.

9. Are deaths under “Act of God” covered by term insurance plans?

- Deaths due to “Act of God” events (such as natural disasters) are generally covered by term insurance plans unless specifically excluded in the policy document.

10. What are the tax benefits applicable for a standard term insurance plan?

- Premiums paid for a term insurance plan are eligible for tax benefits under Section 80C of the Income Tax Act, up to a maximum of Rs. 1.5 lakh in any given financial year.

11. What are the eligibility criteria for purchasing term insurance?

The eligibility criteria for term insurance typically include:

  • Age: Most insurers offer term plans to individuals aged 18 to 65 years.
  • Income Proof: Proof of income, such as salary slips, bank statements, or income tax returns, may be required to assess the coverage amount.
  • Medical History: A declaration of medical history and current health status is often required. Some insurers may also request a medical examination.
  • Identification Proof: Valid identification proof like a passport, Aadhar card, or driver's license.
  • Address Proof: Documents such as utility bills, rental agreements, or bank statements as proof of address.
  • Nationality: Generally, the policyholder should be an Indian citizen or an NRI with valid proof of citizenship.

12. Do I need to undergo a medical examination to buy term insurance?

- Some insurers require a medical examination based on the policyholder’s age, sum assured, and medical history. The medical tests help the insurer assess the risk and determine the premium. However, some insurers offer policies without medical exams up to a certain coverage amount and age.

13. What documents are required to apply for term insurance?

The documents required usually include:

  • Identity Proof: Aadhar card, passport, PAN card, voter ID, etc.
  • Address Proof: Utility bills, rental agreement, bank statements, etc.
  • Income Proof: Salary slips, income tax returns, bank statements, etc.
  • Age Proof: Birth certificate, school leaving certificate, passport, etc.
  • Medical Reports: If applicable, based on the insurer's requirements.