- 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.
- 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.
- 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.
- 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.
- 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.
- Yes, term insurance generally covers the policyholder's death regardless of where it occurs, including outside India, unless explicitly excluded in the policy terms.
- 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.
- Yes, Non-Resident Indians (NRIs) who hold dual citizenship and qualify as citizens of India are eligible to purchase term insurance in India.
- 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.
- 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.
The eligibility criteria for term insurance typically include:
- 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.
The documents required usually include:
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