Term Insurance

Term insurance is simply a pure risk protection life insurance plan that helps dependent family members to stay financially secure and stable, in case of breadiwnner’s untimely death.
Simply put, term insurance is a type of life insurance policy that provides financial protection to your family for a specified "term" or period. In case of an untimely death of the breadwinner during the specified policy term, breadwinner’s family receives a sum assured, which can help them to manage financial needs in breadwinner’s absence.
Consider a term plan as your promise to your family to ensure their dreams and goals continue to thrive, even in your absence.

Investing in a term insurance policy is not just about securing a safety net; it’s about ensuring peace of mind for you and your family. Here are some compelling reasons why term plan is a smart choice:

• High Sum Assured: It provides your dependents with high sum assured ensuring family’s financial stability and support when they need it the most, helping them cover daily expenses, any debts, and future costs like childresn’s education, in your absence.
• Peace of Mind: Knowing your loved ones are financially protected helps you live life without worries, focusing on the present while securing their future.
• Tax Benefits²: Enjoy tax benefits² on the premiums you pay and the benefits your family receives, making term life insurance a smart financial choice to secure your family.
• Financial Protection: Provide financial protection to your family with term plan’s high sum assured.

To understand how a term plan works, let's take a real-life inspired story of Arun, a 32-year-old IT professional from Bengaluru. Arun, recently married and planning for a family, recognized the importance of securing their financial future early on. He wanted to ensure that in the event of any unforeseen circumstances, his family would not have to compromise on their lifestyle or future goals, such as his future child's education or paying debts of a home.

Arun opts for a term insurance plan with a policy term of 30 years with a sum assured that seemed adequate to cover his family's future expenses, including his home loan and his child's education. The premium was quite affordable, fitting comfortably into his monthly budget without disturbing his current lifestyle or savings plans.

How term plan works

• Financial Security for Family: In the unfortunate event of Arun's untimely passing during the policy term, his family would receive the sum assured, providing them with financial stability and the means to continue pursuing their dreams without financial burden.
• Peace of Mind: Knowing that his family would be financially secure in his absence allowed Arun to focus on his career and family life without the constant worry of "what if."
• Tax Savings: The premiums paid towards the term insurance offered Arun tax benefits², thus reducing his taxable income and providing additional savings each year. The sum assured as a death benefit that the beneficiary would receive, would also be tax exempted**

Below table mentions the list of things typically included and excluded in a term insurance plan

Riders are additional benefits that can be attached to your term insurance plan, offering enhanced protection tailored to your specific needs. Here are some popular types of riders offered by ABSLI:

• Accidental Death Benefit Rider: Provides an additional sum assured in case of death due to an accident, offering extra security to your family.
• Critical Illness Rider: Offers a lump sum amount if diagnosed with one of the specified critical illnesses, aiding in managing high medical costs.
• Waiver of Premium Rider: Ensures the waiver of all future premiums in case of critical illness or disability, keeping the policy active without further financial burden.
• Income Benefit Rider: Provides a regular income to the family in addition to the sum assured for a specified period, ensuring financial stability.

Selecting the best term insurance plan requires a thoughtful approach, considering your unique financial situation and future goals.
Here's how to make an informed choice when opting for a term plan:

• Assess Your Coverage Needs: Consider your financial obligations, future goals, and the lifestyle you wish to secure for your family. This helps determine the sum assured needed.
• Consider Policy Term: Align the policy term with your retirement age or until your financial liabilities are expected to diminish, ensuring you're covered when it's most needed.
• Check for Flexibility: Opt for a term plan that offer flexibility in terms of premium payment options, coverage adjustments, and add-on riders.
• Consult with Experts: When in doubt, speak with your financial advisors or insurance experts to get personalized advice tailored to your needs.

When it comes to safeguarding your family's future, opting for a higher sum assured in your term insurance plan can make a significant difference. A higher sum assured ensures that your loved ones have enough financial support to maintain their lifestyle, pay off any debts, and fulfil future goals without compromise, even in your absence.
Here's why and how you should consider choosing a higher sum assured when opting for a term plan

• Adequate Coverage: Factor in inflation and the rising cost of living to ensure the sum assured today will be sufficient for your family's future needs. A higher sum assured helps to cushion against these economic changes.
• Debt Repayment: If you have loans or mortgages, a higher sum assured can ensure that your family can repay these debts without financial strain.
• Education and Lifestyle: It can cover your children's education expenses and support your family's lifestyle, ensuring they can continue to live comfortably.
• Long-Term Security: Offers peace of mind knowing that your family is financially secure for the long term, covering various life stages and needs.

Purchasing term insurance is a straightforward process, but having the right documents ready can make it even smoother. Here’s a list of the common documents you may need

• Identity Proof: A government-issued photo ID such as an Aadhaar card, PAN card, passport, or driving license to verify your identity.
• Address Proof: Documents like recent utility bills, Aadhaar card, or passport that confirm your current residence.
• Income Proof: To assess the premium and sum assured you're eligible for, you'll need to provide recent salary slips, income tax returns, or Form 16.
• Age Proof: Birth certificate, PAN card, passport, or any other document that certifies your date of birth.
• Medical Reports: Depending on your age, sum assured, and health declarations, you might be asked to undergo medical tests. Relevant medical reports may be required if you have pre-existing conditions.
• Bank Proof: Bank statements or a cancelled cheque for setting up the premium payment process and to validate your bank account details.
• Photographs: Passport-size photographs for your application form.

Filing a claim for term insurance is a process designed to be as smooth and hassle-free as possible, especially during the challenging times of dealing with a loved one's passing. Here's a step-by-step guide to help you through the process

Step 1: Intimation of Claim

The first step is to inform the insurance company about the policyholder's demise. This can usually be done by contacting the insurer's customer service via phone, email, or visiting their nearest office. Provide the policy number, date, cause, and place of death.

Step 2: Submission of Required Documents

• A duly filled claim form or death claim intimation form.
• Original or certified copy of the death certificate.
• Policy document.
• ID proof of the nominee.
• Any other documents requested, such as medical records, hospital certificates if death was due to illness, or a police FIR and post-mortem report in case of accidental death.

Step 3: Claim Processing

Upon receiving the claim intimation and necessary documents, we will verify the details and assess the claim. They may ask for additional information or documents if required.

Step 4: Claim Decision

Once the verification is complete, we will make a decision on the claim. If the claim meets the policy terms and conditions, it will be approved. All insurance companies are required by law to settle or reject a claim within 30 days of receiving all necessary documents. If the claim requires further investigation, the insurer must complete the process within 90 days from the date of claim intimation.

Step 5: Disbursement of Claim Amount

• Ensure that the nominee is aware of the policy details and knows where the policy documents are kept.
• Keep all relevant documents organized and accessible to avoid delays in the claim process.
• If facing difficulties or delays in the claim process, reach out to the insurer's grievance redressal officers or consider seeking legal advice.