Kotak e-Term - Online Term Insurance

What is Term Insurance



Term insurance is the most basic and cost-effective form of life insurance availed for a predefined period of time.The objective of term insurance is to provide financial coverage to the policyholder (you) and/or beneficiary in case of unfortunate events in return for paying regular premiums. When you get term insurance, you can be assured that your family and dependents will be financially secure in your absence.This helps your family fulfil their future needs like higher education, marriage, buying a house etc.

What is Kotak e-Term Plan

Kotak e-Term plan is a pure protection term insurance plan.

Kotak e-Term Plan has been specially designed to let you give that assurance to your family.

Your family is your first priority. You strive to provide comfort, happiness, and security to your family, and you would want their future to be secure at all times. Even when you are not around you want to ensure that you have secured their financial future.

Kotak e-Term Plan is a pure-risk cover term insurance plan that is truly an economical means of providing you with a high level of protection. It offers special premium rates to non-tobacco users and women. In case of policyholder’s untimely death, the beneficiary receives the death benefit as per the selected plan option.

Kotak e-Term Plan also offers the option to enhance your coverage against accidental death, total and,permanent disability. Further, you can also choose additional cover through Kotak Critical Illness Plus Benefit Rider upon paying an additional premium,thus ensuring a complete cover against unfortunate eventualities.

Benefits of Term Insurance

High Coverage at Affordable Premiums

With premiums starting as low as Rs.19* per day,term insurance is one of the most affordable policies to have. Term insurance also takes care of your family’s future in case of unfortunate incidences such as untimely death, critical illness or permanent disability. With multiple plans and pay-out options, you get to choose your preferred payment option and select benefit options for your term insurance plan.

Financial Security

A term plan gives your family a lump sum amount that provides financial security. The sum assured can be used for your children’s higher education and to take care of daily expenses. Financial liabilities, like home loan, mortgage loan, etc., can be paid off using the death benefit amount.

Long-Term Insurance Coverage

You can get an extended insurance term with Kotak Life Insurance, where the policy term starts from 5 years to a maximum of 57 years with the entry age limit capped at 65 years and the maturity age capped at 75 years. This enables you to be covered for an extended period until the dependency of your children and other liabilities reduces.

Tax saving

Under Section 80C, you can claim income tax deductions for the premiums paid towards securing term insurance policy. Also, under Section 10(10D) of the Income Tax Act, 1961, your family is eligible to claim the death benefit and availtax benefit. This is subject to conditions as specified in those sections, and the tax benefits are subject to change as per tax laws.

Cover for Major Illness

With Kotak Critical Illness Plus Benefit Rider, the sum assured is payable in case you are diagnosed with any one of the 37 critical illnesses listed. Kotak Life Insurance covers major ailments like cancer, brain tumour, blindness, and loss of limbs, among others.

Protection from Disability

By choosing the Life Secure option available under Kotak e-Term plan, you can avail an additional security feature. Life Secure safeguards you against permanent disability by waiving off future premiums and keeping the policy in-force for the entire term.

Secure Yourself against Accidental Death

With Life Plus Option, your loved ones are always secured, even in case of your accidental death. Your family will be eligible for claiming the complete sum assured and the accidental death benefit, subject to a maximum of INR 1 crore.

Flexibility in Paying Premiums

You have the flexibility to pay your insurance premiums as per your convenience. Kotak e-Term Plan provides you with a monthly and yearly premium payment option for your term insurance plan. You can choose the frequency according to your income cycle and preference.

Why Should You Buy Term Insurance Plan?

Life is uncertain and cannot be predicted at any point. You never know when an unfortunate incidence may occur and leave your loved ones without any financial security. Such a situation can result in your family’s dependency on a close relative or may lead your spouse and children to hunt for new jobs to make ends meet. In order to avoid such situation, a term insurance policy is a crucial element to secure the future of your loved ones.

For example: You are the only earning member of the family with a monthly income of Rs. 50,000. Your family consists of your spouse, who is a homemaker, and two children, of which one is completing their primary education and the other will soon begin college. Your family is living a comfortable life with all their basic necessities being met without any financial issues.

Now, if you were to pass away, your family would still require Rs.35, 000-40,000 to manage their expenses. But due to a lack of financial backup, they would have to depend on someone else. In this case, if you had bought a term insurance policy, your family would have been self-sufficient, and your children could complete their education without any worries.

Term plans give out a lump sum amount to safeguard your loved ones and take care of all their needs. May it be the education of your children or paying off any loans, the death benefit amount assists you to take care of such payments.

Who Should Buy a Term Insurance Policy?

Any individual who has financial dependents or wants to leave their family a legacy should avail a term insurance policy. This would generally include parents, single women, or men that have senior parents, professionals with debts or loans, persons that are nearing retirement, etc., can buy online term insurance. Term insurance plans also provide tax benefits under Section 80C and 10(10D) of the Income Tax Act, 1961, thus reducing your taxable income. Here is a detailed version of who should buy a term plan:

Parents :

: As parents, you have the dependency of your spouse, children, and your own parents. With the help of the sum assured, you can ensure the future of your children and also provide aid to your parents. You can be worry-free about the financial condition of your loved ones after getting a term life insurance plan. Professionals :

: You may have availed a certain education loan to go abroad and study. But if something were to happen to you, your parents shouldn’t bear the brunt of the debt. The sum assured of the term plan can be used to clear off your study loan. Retirees :

: If you are going to retire soon and have dependents or debts, term insurance is the perfect way to safeguard your interests. The death benefit would be enough to pay off any debts and also provide financial assistance to the dependent members. Taxpayers: Individuals who are looking for some tax-savings investments that also give beneficial returns can opt for term insurance. Investing in a term plan is the perfect way to get tax benefits and also earn a life cover.

Types of Term Insurance Plans

There are five types of term insurance plans that you can buy while opting for a pure life cover policy:

Basic Term Insurance Policy

The basic term policy provides you with a pure life cover wherein the beneficiary will get the death benefit in the event of your untimely death. You do not get any maturity benefits if you survive the policy term. Increasing Term Insurance Plan

Increasing term insurance is a plan where the sum assured amount keeps on growing as the years go on. The death benefit may have a maximum cap on the amount to which the sum assured can increase. Such a policy also has no maturity benefit and grants you with a life cover. Decreasing Term Insurance Plan

In decreasing term plan, the amount of death benefit keeps on decreasing as the policy term comes closer to expiry. The premiums of such a plan are lower as such a policy is bought to cover certain debts or loans. Term Policy with Return of Premium (TROP) In return of premium plan, the premiums paid throughout the policy term are refunded to you after the plan expires. The policy gives you a life cover and also returns all of your premiums upon term survival as a maturity benefit.

How to Choose the Best Term Insurance Plan?

There are several factors that you need to check and compare before opting for a term insurance policy from a particular insurer. Here are some that you need to consider before buying a policy:

Claim Settlement Ratio (CSR)

Claim Settlement Ratio tells you how many claims have been settled from the number of claims filed for that particular year. By looking at this number, you are able to understand the probability of your claim getting settled. The CSR of Kotak Life Insurance is 96.38% for the financial year 2019-2020 as per IRDA. Solvency Ratio

Solvency ratio [SS1] shows if your insurer will be financially able to settle your claim if there were a requirement. The IRDA (Insurance Regulatory and Development Authority) demands all insurance providers have a solvency ratio of 1.5. Rider Benefits Another

vital thing you should check is if the insurer is providing you with rider benefits. Insurance riders like critical illness, accidental death, and permanent disability, among others, should be available to be added to your term life insurance plan. Product Details While buying a product, you need to check if the features and benefits of the product compliment your requirements. You should always go through the terms and conditions, benefits, etc., of the policy from various insurers to find the best term insurance plan for you.

How to Buy Term Insurance Plan Online?

Step 1: Estimate the Premium - You can visit the term insurance calculator page to understand the premium amount that you can pay on a regular basis. This will also allow you to calculate the requisite sum assured against the premium to be paid.

Step 2: Fill the Application Form - You can now visit an insurer’s website to buy an online term insurance policy and simply fill in your personal details on the form.

Step 3: Add Riders - After entering your information, you can add insurance rider benefits to the plans which are available.

Step 4: Other Information - Choose other elements of the policy like premium payment frequency, policy term, etc., before proceeding to the payment page.

Step 5: Make Payment - After you have selected the payment frequency, you will be able to see the premium you would need to pay regularly. Proceed to the final page and make the payment and submit the documents that are required by the insurer.

How Much Term Insurance Plan Cover Do You Need?

You can calculate the amount of coverage you require with the concept of Human Life Value (HLV). HLV calculates the economic loss your family will suffer in case of an unfortunate incident. It considers certain aspects like your current age and proposed retirement age, present total savings, monthly expenses, future expenditure like buying a home, higher education for your children, etc., and debts like home loans, etc. Such a concept is beneficial in determining the life insurance coverage that would be needed to ensure your family’s financial security in your absence. You can also use the insurance coverage calculator by entering your details and proceeding to estimate the sum assured for your policy.

How Much Should Be the Term Insurance Policy Period?

A term insurance policy tenure starts from 5 years to a maximum of 40-45 years to cover you from unforeseen incidents. Some insurers also provide a life cover that is valid until you reach 99 years of age if you have dependents that would need financial aid in your absence. While deciding your policy period, you should consider the number of dependents you have, any debts or loans present in your name, etc. After this, you should consider how many years it would take for your dependents to become self-sufficient and the repayment tenure of your debts. You will be able to come up with the policy term you should choose to secure your loved ones.

Frequently Asked Questions (FAQs) about Term Insurance Plans

1. What is a term insurance plan? What are its benefits?

Term insurance Plan is a policy which provides pure protection to your family in the event of your death. It is the most basic type of life insurance plan that is available in the market. You are able to avail higher life coverage at an affordable premium and also add riders to maximize your coverage. Read more about term life insurance plans and its features here!

2. What are the tax benefits of term insurance plan?

A major advantage of investing in a term insurance policy is the tax benefit offered by the Income Tax Act, 1961. This Act offers numerous exemptions and deductions, thus reducing taxpayers’ liability where the insurance premiums can be claimed under Sections 80C and the death benefit can be availed as tax-free under Section 10(10D). Read more to know about the income tax deductions you can claim here!

3. How does term insurance policy work?

Term insurance operates on principles of pure insurance. While being simple and low-cost, it is a very effectual mode of insurance wherein the assured person is covered against the risks of mortality. The premium depends upon the sum assured and the age of the assured person. The younger the person, the lower the premium because the insurance company perceives the risk of mortality, i.e. death of a young and healthy person to be very less. Know more about how a term life insurance plan works by clicking here.

4. Is buying term life insurance plan worth it?

Yes, a term policy is worth it as the plan provides you with a life cover at an affordable premium when compared to other policies. You are also able to add rider benefits to maximize your coverage and secure yourself from certain unfortunate conditions. Know more about the pros of buying term life insurance online by clicking here.

5.What is the premium for a term insurance plan?

The premium of a term insurance plan depends on various factors like age, gender, health reports, past medical history, and lifestyle habits, among others. After you add riders to your plan, select the sum assured, choose the payment frequency, and the tenure of your policy, you will get the final premium payable. Click here to calculate the premium for your term life insurance online.

6.How to pay term insurance plan premium online?

You can pay your term insurance plan premium online modes via net banking, debit/credit card, among others. Read more about online payment options here.

7.How much should be the ideal coverage for term life insurance plan?

The amount of coverage varies from person to person and depends on how many dependents you have. Before you assign a vague number to your sum assured, click here to know how much coverage you need.

8. Is there a term insurance plan for smokers?

If you are a smoker, then you are not only spending money on cigarettes, but you are also increasing your chances of an early demise. One thing that insurance providers know is that smoking habits can have different effects on different people. This is why the term insurance plan for smokers comes in three different categories. Click here to know more about the term plan for smokers.

9. What kind of deaths are not covered in a term life insurance policy?

The very first thing to know when you buy a term plan is what kind of deaths are not covered in order to ensure that your family’s insurance claim is not rejected. Some of them are suicide, death during childbirth, death due to certain dangerous activity, etc. Click here to get detailed information about the deaths not covered under term life insurance plan.

10. Does term insurance plan pay for suicidal death in India?

Suicidal death is not covered in the first year of the policy term and starts getting included in the cover after the second year. If the policy holder commits suicide in the first year, then the claim gets rejected and no death benefit is paid out. Read more about the cover for suicidal death and the terms and conditions regarding it here.

11. Between term insurance and traditional life insurance, which plan is beneficial?

Traditional life insurances provide you with a maturity benefit along with a life cover whereas term insurance plans give you pure life cover at affordable premiums.To compare the two plans better and choose between them, read about ‘Term Insurance v/s Traditional Life Insurance’ here.

12. What is a term insurance calculator?

A term insurance calculator determines the premium rate that you will have to pay regularly to secure a term plan. The premium amount to be paid depends on several factors like your age, health records, the sum assured, and the policy term. The term insurance premium calculator helps you learn the future needs of your family and choose the best term plan available in the market to fit your budget. Read all about term life insurance calculator and its benefits here.

13. What are riders in term insurance plan?

Riders in insurance are basically contingent add-ons or supplementary benefits granted over and above a primary term policy in the event of an unforeseen incidence. They aim at expanding or amending the basic life insurance coverage at an additional cost. This means that they offer extended financial cover above the primary sum assured in a life insurance

policy. You can avail a critical illness rider, accidental death rider, and a permanent disability rider with Kotak e-Term. Read more about the different types of insurance riders here.

14. What is a critical illness rider?

A rider is an additional benefit on your term insurance plan, and it will come into play in case of a specific eventuality, like getting diagnosed with a critical illness. You will receive a lump sum upon diagnosis of one of the covered illnesses which will act as a tool for income replacement and to take care of the medical expenses. Read more about the benefits of having a critical illness rider with your term plan here.

15. How to choose the right term insurance plan?

When it comes to identifying the most suitable term insurance online, one must always consider and evaluate several factors like solvency ratio, claim settlement ratio, and insurance riders. Read more about how to choose the right policy here and get the best term life insurance plan.

16. What should be the ideal policy term for a term plan?

Once you have decided that you want to buy online term insurance policy, you need to choose the right policy term. The policy period should be as long as the period your family will require to gain financial independence. Click here to know how to pick the right policy tenure.

17. When is the right time to buy a term insurance plan?

The right time to buy a term life insurance is when you are younger. In your early twenties and thirties, the premiums are cheaper due to younger age and a healthier lifestyle. Click here to know the benefits of buying a term plan early in life.

18. What are the payment options in term insurance plan?

There are various premium payment frequencies and modes of payment for term insurance plan. Such options enable you to make payments as per your convenience. Read more about the numerous choices you can avail here.

19. Should I buy term insurance plan online or offline?

You can buy term insurance plan via both online and offline mode. To purchase a term plan online, you can click here and proceed to buy a policy by submitting your details. For offline mode, you can visit the nearest Kotak branch and connect with the concerned person