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Insurance

Term Insurance

Term insurance pays a lump sum to the nominee if the policyholder dies during the policy term, and pays nothing if they survive it. That is the whole design, and it is why a sum assured that would be unaffordable as an endowment plan is affordable here. It is the right answer for anyone with dependants and a loan.

What you get

  • Sum assured quoted across insurers for the same age, term and health declaration
  • Level cover, increasing cover and return-of-premium variants
  • Payout as a lump sum, as a monthly income, or a combination
  • Riders quoted separately: critical illness, accidental death, disability
  • Medical test requirement identified before the customer commits
  • Honest declaration guidance, because a non-disclosure is the common cause of a rejected claim

How it works

  1. 1Size the coverStart from outstanding loans plus the income the household would need to replace, rather than from a premium the customer has in mind. The premium follows from the cover, not the other way round.
  2. 2Declare health and habits honestlyExisting conditions and tobacco use change the premium. They do not usually prevent cover. Concealing them is what causes a claim to be refused years later, when the family cannot fix it.
  3. 3Complete underwritingThe insurer may call for a medical test or further documents. The quote is provisional until underwriting is complete and the final premium is confirmed.
  4. 4Register the nomineeThe policy issues with the nominee on record. Keeping that detail current after a marriage or a birth is the single most useful thing a policyholder can do afterwards.

FAQ

About term insurance

Is the premium fixed for the whole term?

On a level term plan, yes: the premium is set at the age of entry and does not rise as the policyholder ages. This is why buying earlier costs materially less over the life of the policy than buying the same cover ten years later.

Will a claim be paid if the policyholder had a condition they did not mention?

That is exactly the case insurers investigate and often refuse. Material non-disclosure at proposal gives the insurer grounds to reject, and the family finds out at the worst possible moment. Declare everything; a loaded premium beats a refused claim.