5 Myths About Term Insurance Plans
Term insurance is an instrument which gives financial protection to the families, in the absence of the income provider. However there are multiple myths surrounding it and it’s time to clear some of them. Term Insurance myths range from still believable to absolutely ridiculous and it’s important to know the difference. Let’s make life a little simple for term insurance seekers looking for affordable solutions to life cover!
Myth No. 1: The policyholder reaps no benefit
Fact: The policyholder can get an option to cover himself/herself against 34 critical illnesses*.
Term insurance plans provide financial security to the family but that’s not all. Some term plans also provide financial cushion to the policyholder when he/she may need it the most – if impacted with a critical illness like cancer, heart problems and many more. It comes in handy and secures finances especially when the earning capacity is compromised.
ICICI Pru iProtect Smart pays the claim amount on diagnosis of 34 critical illnesses to the policyholder. It also gives the option to add accidental death benefit^ at any point in time.
Myth No. 2: The claim settlement process is long and tedious
Fact: Several insurance providers have an easy and quick claim settlement.
Long and tedious claim settlement processes are a thing of the past. These days most of the insurance providers have a fairly easy and good claim settlement process. The same can be checked on their websites. Also, several companies have a good claim settlement ratio.
ICICI Prudential Life Insurance has a claim settlement ratio of 97.88%¹. They also settle your claim in 3 quick and simple steps.
Myth No. 3: Term Insurance plans are not affordable
Fact: Term insurance plans are more affordable than several other policies.
The truth is that term insurances have fairly nominal premiums in comparison to the amount of coverage they provide. You can get a cover of up to Rs.1 Crore at just Rs.482 per month². Additionally, you have the option to make the payments as per your convenience – yearly, half-yearly or monthly.
Myth No. 4: There are better tax saving tools available in the market
Fact: You can save tax up to Rs. 54,600 in a financial year under section 80C + 80D³.
Term insurance not only offers a life cover for your family but also offers you a critical illness cover. Thus you can avail dual tax benefits under section 80C + 80D of the Income Tax Act, 1961. Even the claim amount is tax-free.
Myth No. 5: Only for people with loan liabilities
Fact: It protects the happiness of your family regardless of loan liabilities
You always ensure that your family gets the best of everything – right from best facilities to the most comfortable lifestyle. You make sure that your family never has to compromise with anything. In case of your absence, the claim amount can not only be used to pay any outstanding loans but can also be used by your family for their day to day expenses. Thus ensuring they continue to live life the way you had planned for them.
We hope that seeing these myths about term life insurance being shattered has given you the confidence to take the first step towards protecting yourself and your family.
Now that you have got your answers to some of the more common myths, take the first step towards protecting yourself and your family.
Introducing, iProtect Smart, our new age term life cover plan. It gives you an option to cover yourself against 34 critical illnesses like heart disease, cancer etc. along with a life cover to secure your family. It offers multiple payment options and protects your family for up to 99 years.
*The critical illness benefit is an accelerated benefit and the death benefit will be reduced by the critical illness cover paid to the policyholder. The future premiums payable for the residual CI Benefit will reduce proportionately. In case the CI Benefit equal to the Death Benefit, the policy will terminate on payment of the CI Benefit. Only doctor’s certificate confirming diagnosis needs to be submitted. On payment of Angioplasty, if the CI Benefit is more than Rs.5,00,000 the policy will continue for other CIs with CI Benefit reduced by Angioplasty payout. To know more about the illnesses covered, please refer to the Sales brochure. Available under Life and Health and All in One options.
^Accidental Death benefit is up to Rs.2 Crores. Accidental Death Benefit is available in Life Plus and All in One options.
¹Claim statistics are for FY 2017-18 and is computed basis individual claims settled over total individual claims for the financial year. For details, refer to Public Disclosures in our Website.
²Per month premium for ICICI Pru iProtect Smart for a 20 year old healthy, non-tobacco consuming male with life and health option. Life cover- Rs.1 Crore; Policy term- 20 years; Critical illness cover- Rs.10 lakhs; Payment term- Regular pay; Payment option- Income option. The annual premium exclusive of applicable taxes is Rs.5784/-.
³Tax benefit of Rs.54,600 (Rs.46,800 u/s 80C & Rs.7,800 u/s 80D) is calculated at highest tax slab rate of 31.2% (including Cess excluding surcharge) on life insurance premium u/s 80C of Rs.1,50,000 and health premium u/s 80D of Rs.25,000. Tax benefits under the policy are subject to conditions under Section 80C, 80D, 10(10D) and other provisions of the Income Tax Act, 1961. Goods and Services Tax and Cesses, if any, will be charged extra as per prevailing rates. Tax laws are subject to amendments made thereto from time to time. Please consult your tax advisor for details, before acting on above.