How to Buy Term Life Insurance Online

Term life insurance is the most affordable and straightforward form of life insurance. It provides a large sum assured to your family in case of your untimely death, at a very low premium. For self-employed individuals who are the primary breadwinners, term insurance is not a luxury — it is a necessity. Buying term insurance online is quick, convenient, and often cheaper than offline policies. Here is your complete guide.

What Is Term Life Insurance?

Term life insurance is a pure protection plan. You pay a fixed premium for a chosen tenure (say 20 or 30 years), and if you pass away during this period, your nominee receives the sum assured. Unlike endowment plans or ULIPs, term insurance has no maturity benefit — if you survive the term, you get nothing back. This is exactly what makes it affordable. A 30-year-old can get Rs 1 crore cover for as little as Rs 700-1,000 per month.

Why Self-Employed Individuals Must Have Term Insurance

As a self-employed professional, you do not have employer-provided group life insurance. If something happens to you, your family loses not just a loved one but also the primary income source. Term insurance ensures your family can maintain their lifestyle, pay off debts, fund your children’s education, and cover daily expenses — even in your absence.

How Much Cover Do You Need?

A common rule of thumb is to have a cover that is 10 to 15 times your annual income. Consider these factors when deciding your sum assured:

• Annual household expenses — Multiply by the number of years your family would need support.
• Outstanding loans — Home loan, car loan, personal loans.
• Future goals — Children’s education, their marriage, spouse’s retirement.
• Existing assets — Subtract savings, investments, and other insurance covers.

For example, if your annual income is Rs 12 lakh, you should consider a cover of at least Rs 1.2 to 1.8 crore.

Step-by-Step Guide to Buying Term Insurance Online

Step 1: Compare Plans Online

Visit insurance comparison websites or go directly to insurer websites. Compare plans from top insurers like LIC, HDFC Life, ICICI Prudential, Max Life, Tata AIA, and SBI Life. Key factors to compare include premium amount, claim settlement ratio (CSR), sum assured options, rider options, and policy terms.

Step 2: Choose Your Plan Features

Select the sum assured, policy term, and premium payment frequency. Consider adding riders such as accidental death benefit, critical illness cover, or waiver of premium. Choose between level cover (fixed sum assured) and increasing cover (sum assured increases annually to account for inflation).

Step 3: Fill the Application Form

Provide your personal details including name, date of birth, address, PAN, Aadhaar, income details, and occupation. As a self-employed individual, you may need to provide your ITR copies or business income proof. Answer the medical questionnaire honestly — misrepresentation can lead to claim rejection.

Step 4: Complete Medical Tests (If Required)

For policies with high sum assured (typically above Rs 50 lakh to Rs 1 crore, depending on age), the insurer may require medical tests. These usually include blood tests, ECG, and a basic health check-up. The insurer arranges these tests at your home or a nearby diagnostic centre at no cost to you.

Step 5: Make Premium Payment

Pay the first premium online through net banking, credit card, debit card, or UPI. Many insurers offer a discount of 5-10% for annual premium payments compared to monthly payments. Online policies are typically 10-20% cheaper than offline policies.

Step 6: Receive Your Policy Document

Once your application is approved (after medical underwriting), the insurer issues your policy document electronically. Download and save it securely. Inform your nominee about the policy details, including the insurer’s name, policy number, and claim process.

Tax Benefits of Term Insurance

Premiums paid for term insurance qualify for tax deduction under Section 80C up to Rs 1.5 lakh per year (under the Old Regime). The death benefit received by the nominee is fully tax-free under Section 10(10D).

Tips for Buying Term Insurance

• Buy early — premiums increase significantly with age.
• Choose a high claim settlement ratio insurer (above 95%).
• Do not underinsure — adequate cover is more important than low premium.
• Disclose all health conditions honestly.
• Review your coverage every 3-5 years as your income and liabilities change.

Protect Your Family, Grow Your Wealth with Bachatt

Term insurance protects your family’s future, and smart investing secures it. With Bachatt, India’s investment app for the self-employed, you can start building wealth alongside your insurance coverage. Invest in mutual funds, save systematically, and achieve your financial goals. Download Bachatt today and start planning a secure future.