A term insurance plan is a low-cost, high cover plan in which the sum assured is paid to the nominee if the death of the insured happens within the policy term. It has no maturity value such as a car insurance policy. The popularity of Term insurance plans may be gauged from the findings of a recent survey that found, "While a reasonable 65 per cent of the urban population of the country owns life insurance, term insurance owners only make an abysmal 21 per cent of urban India." The premium-to-sum assured ratio is in favour of term plans compared to traditional plans such as endowments and money-back, still people refrain from getting a pure term plan.
While a plain-vanilla term insurance plan does not come with any customization or added features, several insurers are now launching term plans that can appeal to the buyer under different circumstances and life stages. Max Life Insurance has recently launched 'Max Life Smart Term Plan', a term insurance plan that will offer a wide range of benefits and features to the buyers so as to help them customize their purchase.
There are several premium payment term in Max Life Smart Term Plan. From Single payment, payment for a limited term of 5, 10, 12, 15 years, pay till 60 to the standard regular mode of premium payment, one may choose any one depending on the need. Ideally, go for the annual regular premium payment option in a term plan.
To let policyholder increase the life cover at different life stage, the plan comes with 'Life Stage Add-on Sum Assured Benefit' for major life's milestones like marriage, childbirth or home loan.
In addition, to provide further customisation, the plan offers:
- Seven distinct death benefit options
- Accelerated Critical Illness Benefit
- 'Premium Back' option
- Longer life cover till 85 years
- Additional protection via add-on riders
Max Life Smart Term Plan offers seven types of death benefits including a combination of lump sum and family income monthly income. The seven death benefit options are:
i. Life cover with lump-sum death benefit
ii. Income protector with fixed level monthly income
iii. Income inflation protector with increasing monthly income
iv. Life cover plus monthly income with lump sum life cover with a fixed level monthly income
v. Life cover plus increasing monthly income with an increasing monthly income
vi. Life Cover with increasing sum assured; and
vii. Life cover with decreasing sum assured.
Life stage planning: Under the ‘Life Stage Add On Sum Assured Benefit’ one can enhance the sum assured to match life stage events such as marriage, childbirth or the taking of a home loan, thus increasing their financial protection at every milestone of life.
Increase or decrease sum assured: Under the ‘Increasing cover and reducing cover’ death benefit option, one can have an option to either increase or decrease the sum assured. However, it is to be opted for while buying the policy itself and cannot be opted for at a later stage. In times of inflation, increasing life cover helps while when liabilities are over, decreasing the sum assured helps.
Critical illness cover: This plan will also provide an option for 'Increasing Accelerated Critical Illness' benefit, which gives an option to increase the critical illness sum assured. Max Life Smart Term Plan also covers a total of 40 critical illnesses under accelerated critical illness benefit.
Accident cover: Under the 'accident cover option', additional financial protection against the accidental death may be availed by paying an additional premium.
Return of Premium: This term insurance plan offers a 'Premium Back Option' on a term product till the age of 85 for the consumers who are looking for some return upon the survival of the life insured throughout the policy term.
Riders: To further add to its flexible design, Max Life Smart Term Plan also comes with add on Max Life Waiver of Premium Plus Rider which provides a waiver for all future premiums under the policy.
What to do
It is generally suggested to buy a plain vanilla term plan for at least ten times of one’s annual take-home pay. While a term plan covers the risk of dying early, there are other life risks as well. For someone not comfortable in covering all other risks by buying separate plans, Max Life Smart Term Plan could fit the bill. However, based on your age and other parameters, compare the premium outflow and see if buying a combo term plan is better or getting the risks covered separately helps.