The right term plan for oneself requires you answering two important questions -
1. How much life insurance do I need?
2. For you many years do I need the cover for?
1. Your term insurance coverage needs should be a broadly accurate assessment of how much of financial resources will your dependents need to provide for themselves if you were to meet an untimely death.
The best way to determine this is to -
estimate your dependent family's monthly expenses for the next 15 years (inflation is factored in using a 15x multiple)
add: your liabilities on account of home loans, credit card bills, personal loans, business loans etc.
remove: any liquid assets you already have like fixed deposits, stocks, mutual funds etc.
add: expenses on account of important life goals that are likely to happen in the next 15 years like children's higher studies or marraige
add: retirement corpus you want to leave for your spouse on his/her retirement
2. Once you know how much, it's important to determine till what age you need the cover as the premium increases as you tend to increase the term period. A good estimate of this is to determine - by what year will your liquid net worth (i.e. assets like mutual funds, provident fund, retirement fund, gold etc. other than real estate) after subtracting your liabilities will be more than the life insurance cover we calculated in point 1 above. The age at which these two numbers coincide will be the age until which you need coverage because post that your assets will take care of your dependents upon your demise.
A tip - while calculating 1 and 2 above, it is better to be conservative so if the amount you get in point 1 is x, it is better to up it by 20-30% so that there is a margin of safety in your calculations.

The cover that you choose for your term life insurance policy should be a broadly accurate assessment of how much of financial resources will your dependents need to provide for themselves if you were to meet an untimely death. The best way to determine this is to -
1. estimate your dependent family's monthly expenses for the next 15 years (inflation is factored in using a 15x multiple)
2. add: your liabilities on account of home loans, credit card bills, personal loans, business loans etc.
3. remove: any liquid assets you already have like fixed deposits, stocks, mutual funds etc.
4. add: expenses on account of important life goals that are likely to happen in the next 15 years like children's higher studies or marraige
5. add: retirement corpus you want to leave for your spouse on his/her retirement
The total of all these is a broadly scientific way of determining how much of risk cover one should endeavour for.
Risk cover can also be determined using a thumb-rule based approach where a multiple is applied on one's annual income to estimate the life insurance eligibility. Here is how that is calculated -
- Age (18 to 40 years) : Annual income * 20 times
- Age (41 to 50 years) : Annual income * 15 times
- Age (51 to 60 years) : Annual income * 10 times
- Age (61 & above) : Annual income * 7 times

Limited Pay Term plans -
You pay only for a limited time - 5 to 15 years or up until you turn 60, while you remain covered until the policy ends. Best for those in their 30s, looking for long-term coverage or self-employed people looking to pay-off this liability during their peak earning years.
Regular Pay Term-Plans -
You need to pay until the end of policy to stay protected. Best for those in their 60s or looking for short-term coverage.

You should choose to pay until your peak earning years to avoid worrying about paying premium when you stop earning. Those beyond 45 years age can choose to pay till age 60.
When it comes to policy term, you should select a longer coverage term, at least until your retirement year or time to cover your longest financial liability.

Yes. You need to have your own term plan outside of the cover that the company might provide.
There are three reasons supporting this -
For a company to provide term insurance cover is not mandatory. As a result, very few companies provide a term insurance cover to their employees as the trend has not really caught but like health insurance. It might happen that you might move into a company which does not provide term life insurance cover to its employees
The coverage offered under company term life insurance plans is generally 1x or 2x of your compensation package. This is quite inadequate as we at ETMONEY suggest the term life insurance coverage should be between 7 to 20 times depending on the age and the responsibilities of the employee. If you rely only on the company cover, then you will find yourself underinsured by upto 90% which is not a smart move.
Delaying the purchase of your term insurance plan means you will end up paying a higher premium when you finally purchase your term insurance plan. For example - at the age of 30 years, your premium for a 1 crore life cover comes to approximately ₹11,000 (depends on insurer) for a plan that provides you cover until your are 75 years of age. Now you decide not to enroll for a term plan and do so much later at the age of 45 years when the annual premium is much higher at about ₹31,000 per year for a cover that goes upto you reaching 75 years of age. The total premium outlay when you buy the plan early will be about 50% of the premiums you will be paying by taking the plan later.

You should endeavour to buy a term insurance plan when you start earning money and have current or potential dependents. For example - you are 21 years old and have just started to work. Money is not really a problem because your parents are still working and can take care of themselves. However in the next 5 years, your parents are set to retire which will make them dependent on your income for sustaining themselves. Such being the case, your untimely death will create major financial complications in the life of your dependent parents and hence it is wise for you to purchase a term life insurance plan within these 5 years.
The need for term insurance is highest when you have the maximum number of dependents when you are in your 30s with a non-working spouse, children and dependent parents. If you have 3 to 4 dependents who look upon your earnings to sustain themselves and you still not have a term life insurance policy, then the time to buy the term insurance plan is now

No. There is no concept of cashing out a term life insurance policy. Term insurance plans are protection plans which offer a death benefit upon the death of the policyholder within the policy term. No other benefit is payable in these pure protection plans. There are however two variations here which may not be termed as "cash outs" but I mention these as there is a cash outlay from the insurance company outside of the death benefit.
when opting for critical illness riders - this is where you contract a critical illness but are still very much alive. All critical illness riders offer a fixed compensation to the user upon the diagnosis of the critical illness or different stages of the listed critical illnesses.
when you opt for a "return of premium" option - the return of premium option offers you a survival benefit and says that if you are alive after the end of the term for which you have taken a term insurance plan, then the entire premium shall be paid back to you. This is a positive cash outlay for the policyholder

No. Duration of a life insurance cover cannot be changed after the policy is issued to you as the duration is a key component in the pricing (premium) of the life insurance contract. However what you can do is to apply for another life insurance policy with the same insurer or any other insurer of your choice. You can contact the support team at ETMONEY and we would be happy to help you out on this.

There are three broad types of life insurance plans. These are -
1. Protection Plans
2. Savings Plans
3. Wealth Creation Plans
1. Protection Plans are aimed at offering financial compensation to the policyholder or his/her dependents (beneficiaries) in the event of death or disease or disability. The purest form of protection plans are term life insurance plans where upon the death of the policyholder within the term contracted for, a pre-agreed amount (sum assured) is paid to the beneficiary under the policy. Term insurance plans are affordable, simple to understand and extremely popular
2. Savings Plans are aimed at offering consumers an alternative to fixed deposits or other savings instruments and are designed to offer fixed or predictable long term maturities. It is common for consumers to enroll to an endowment or moneyback plan where the policyholder receives payouts from time to time against the premiums paid in the initial years. These policies generally have a term of 10 to 20 years and are constructed in the style of saying - "You pay ₹1,00,000 each year for the next 10 years and at the end of 20 years, you shall be paid back ₹20,00,000". While the IRR (rate of return) of such products are generally in the 5-8% range, it still serves as a way of forcing users to save monies for retirement and other future needs. A large number of these policies are sold during the January to March window when people across India are scampering for tax saving instruments.
3. Wealth Creation Plans are products which are aimed at maximizing the invested surplus of consumers so that they can build their wealth over the long-term. Unlike savings plans, the premium invested in these plans are invested in stock, bonds and other instruments which have a higher risk-return ratio as compared to savings plans which invest in secured instruments like government bonds or instruments where capital is guaranteed. In these plans, a small component of the premium paid goes towards giving the investor a small life insurance cover while the bulk of the premium is invested in the wealth creation instruments. Insurance products like ULIP (unit linked insurance plans) come under the wealth creation product suite and these plans directly compete with other wealth creation products like mutual funds, REITs, direct equities, PMS etc.

Mostly no. In case of term insurance plans, the premium is locked for the term of the policy which can be anywhere from 5 years to 100 years. The premium referred to here as unchanged is the pre-tax premium which means if there is a change in the tax regime then your premium might go up or down. Here, in India, term plans are taxed at 18% GST (as of December 2019). The tax rate for different insurance products are different e.g. endowment plans are taxed at a GST of 4.5% in their first year and then 2.25% in the renewal years. This is the premium amount that is variable but the base premium is mostly fixed.

Yes, natural death is covered in term insurance and is one of the primary events for which term insurance plans are bought. Death from natural causes typically includes death due to old age, a heart attack, stroke, illness, or infection.

Yes, term insurance plans offer tax benefits under three sections of the Income Tax Act, 1961. Many consumers use insurance policies to save on taxes and yet take advantage of products that can lower their financial risks. Term insurance plans offer three types of tax benefits -
Benefits under Section 80C - allows an exemption for life insurance premiums upto ₹1.5 lakh per annum (as of December 2019). This amount can include any premiums you might have paid for your spouse and/or children.
Benefits under Section 10 (10D) - pertains to the payable benefits under the policy which can be the maturity amount or death benefit. Under this provisions of this section, benefits payable are fully exempt from taxes and comes without any upper limit.
Benefits under Section 80D - allows an exemption to that part of the premium paid for life insurance which is applied on coverages like critical illness that are health related. The provisions of this section allow for premiums upto ₹25,000 (as of December 2019) to be exempted from taxes
Tax laws change often so do consult your tax expert/advisor for details before making a decision.

The documents you provide towards your term insurance application must meet the four requirements from an insurer which is required to underwrite a term life insurance plan. These are -
Proof of identity
Proof of address or residence
Proof of income
Proof of age
Proof of identity - One of the below documents that can be offered as proof of identity are -
Passport
Aadhar Card
Voters Identification Card
PAN Card
Proof of address or residence - Generally accepted documents as proof of address include any one of the below
Leave & License agreement
Bank Statement with entries for the last 6 months,
Driving License with address mentioned
Electricity / Telephone / Water / Gas bill (these should be less than 3 months old)
Aadhar Card
Passport
Ration Card
Voter ID card
Proof of income - Term insurance policies are aimed at replacing the policyholder's income and hence establishing the income of the applicant is a key part of underwriting an insurance contract. You can offer any one of the following documents -
Last 3 months salary slips
Income Tax Returns of last 3 years
CA certificate in case of self-employed or businessmen
Latest Form 16
Proof of age - Insurers accept the following documents for the purpose of establishing the correct age of the applicant -
Aadhar Card
Voters Identification Card
PAN Card
Passport
Marriage certificate
Ration card
Birth certificate
School/College leaving certificate

You will lose out on all the benefits of the plan if discontinued within 2 years. If discontinued after 3 years, your policy will go into a paid-up mode with cover amount equal to surrender value.

It's the value acquired by the policy & paid to user, if user stops paying after already having paid 2 or more premiums installments
It is calculated as 70% ✕ Total Premiums Paid ✕ %remaining policy term
This is applicable only for limited pay term plans and not for regular term insurance