Guide to Buying Term Life Insurance on PhonePe

What’s the story?

Term life insurance is a pure protection policy that financially protects your dependents in the event of your premature death.

The insurance covers a fixed policy period from five to 80 years.

Term insurance is one of the cheapest life insurance products available on the market, characterized by low premiums.

Here’s how you can buy a term life insurance plan PhonePe.

First, let’s compare term life insurance with annual plans

Both term life insurance and annual plans cover premature death during the policy term, but they differ in many ways.

The annual plan covers one year, while long-term plans can cover up to 80 years or even provide lifetime coverage, depending on the plan you choose.

Premiums may change each time an annual policy is renewed, but term plans have fixed premiums that do not change over the life of the policy.

Medical insurance and term insurance plans

Medical insurance is another area where these two types of insurance policies differ.

Typically, annual life insurance plans do not require medical insurance. However, this does not apply to regular plans, which often include a detailed health assessment before a policy is issued.

This process allows insurers to determine the level of risk associated with insuring a given person and, on this basis, determine the appropriate premium rate.

Affordability and Flexibility: Key Benefits of Term Insurance

Term life insurance is popular because of its affordability and flexibility.

Unlike other life insurance products that have savings and bonus components, term insurance provides high protection at low premiums.

Policyholders can choose the coverage period, and some insurers even offer extended coverage to 99 or 100 years.

Moreover, some term plans even allow for monthly payment of the sum insured, replacing the insured person’s income for the benefit of his or her family.

Term insurance provides tax benefits and financial security

Term life insurance also offers tax benefits under the Indian Income Tax Act, 1961.

Premiums paid for term insurance are eligible for tax deduction under Section 80C every year.

Further, any payout received on the death of the policyholder is completely tax-free under Section 10(10D).

In addition to the tax benefits, term plans guarantee your family’s financial stability by ensuring they receive a lump sum payment in the event of your death.

This amount allows you to cover your daily expenses without compromise.

What does term insurance cover and exclude?

Term life insurance covers death due to disease, natural causes, natural disasters/catastrophes and accidents.

However, it does not cover death by suicide within one year of purchase/renewal of the policy.

In this case, if the insured person commits suicide within one year of purchasing the policy, the premium is refunded. If a suicide is committed within one year of awakening, more than 80% of the premium paid/surrender value is refunded.

How to buy term life insurance on PhonePe

Open the PhonePe app and go to the “Insurance” category. Select “Term Life” to view available plans.

To get the recommended insurance amount, enter your date of birth and annual income. Based on this information, PhonePe will suggest the appropriate insurance amount, say ₹2 crore.

Then select your desired coverage period and provide additional personal information to view available plans.

Once you have selected your plan, enter your address details and complete payment to secure term life insurance.