Life insurance in its nascent
is known term insurance . The every very name implies that the coverage is for a limited
and specific time. A term
insurance contract could be structured for any period. Generally from the point of view of underwriting , the term
varies from five years to twenty
years. However Assured Life Time, a
term insurance product of TATA -AIG is a
available fro a term of one year
and has certain attractive options like
conversations of the plan to a savings
plan and renewal of one and five year
plans without any medical test etc.,
Under a term insurance contract, the sum
assured becomes payable only if death occurs during the selected term, and nothing becomes
payable once the term expires. Wherever
the contract envisages a renewal of the contractor for a stipulated period after the expiry of the original contract such a policy is called Renewable Term insurance policy.
Some term
insurance contractors offer a
conversion clause by which the
assured can experience an option of the to convert the term into
a permanent assurance plan without plan any further
medical examinations . LIC, Max New York Life Tata AIG are a few
examples,. Until recently term insurance contractors were not
popular in India. The first
branded term insurance plan Bima sandesh
with return of premium provision had a
slow death for want to of proper positioning , . With the opening up of
the industry, the concept of the term assurance plans received a shot in the
term arm and many companies like ICICI
prudential Life, Birla Sun Life, and LIC
market such term assurance plans as a assurances with Return of premium (ROP). With the opening up to the industry to private players, the
concept of the ‘Term’ is getting promoted . Now private companies alongside, LIC, market such plans , and
the price war is hotting up in this
product class. For the first time among private insurers in the Indian market ,
Max NEW YORK LIFE came out the with a
LEVEL Term Plan with yearly
and other mode options with the
term extending to 20 year and 25 years.
This was positioned as an
attractive low-cost plan. Another innovative term insurance plan was a
the KOTAK Preferred Term PLAN (KPTP),
introduced by Kotak mahindra Old Mutual Life insurance company. His term
assurance with a minimum sum
assured of Rs. 10 lakhs is available for men in the group
of 18-60 years , provided they do not
tobacco in any form. If some
one takes to smoking
the after the conclusion of the
contract the company may view it as a violation of the terms of contract and decide
to decline the death claim, it if
is established that the death has resulted as result of the
policy holder taken to the tobacco smoking.
Bajaj Allianz Term Care
offers life insurance cover at a low cost and provides for returns
of premiums on maturity. The premium
returned at a maturity amount the
to the sum assured of the premium paid
until maturity sans the extras, if any .
In the event of the death of the assured, the sum promised is paid to the nominee of the legal heir. The
plan has built in Accidental death Benefits and Accidental permanent Total/ Partial Disability Benefits subject to conditions .
This plan is
marketed under economy, protect health
the and total compacts with graded
benefits. ING Vysya markets a term
insurance plan with a critical illness rider
and HDFC standard Life markets a loan
protections cover. Life shield a term
insurance plan offered by Aviva life insurance , LIC’s Jeevan Anmol, Shield, the term insurance
plan of SBI Life Tata -AIG’s Life Plus, ICICI Pru’s Life Guard
are some of the well known term insurance brands. A number of the
variations are offered under these plans. Though
a term insurance plan provides
very high protections at a minimum cost, it should be noted that it is only
temporary protection and cannot offer the type of the security that a
permanent insurance cover can. It
should also be noted that if they
a person aged 30 , considered the
cost advantage and takes only a term Assurance for a
period of 30 years and if he/she
survives the term on reaching the
elderly age of 60, he/she is left high
and dry without any insurance proceeds
to fall back on. Even in the US,
where the dictum buy term and invest the rest was once popular , public outlook
is changing in preference to comprehensive plans.
