Glossary · Insurance
Term Insurance
A pure life-insurance plan that provides financial cover to the nominee in case of the policyholder's death within the policy term, with no maturity benefit.
Term insurance is the simplest and most affordable form of life insurance. The policyholder pays a fixed premium for a fixed term (10, 20, 30 years, or up to age 85) and the insurer pays a lump-sum death benefit to the nominee if death occurs during the term. There is no survival or maturity benefit, which keeps premiums low. Riders like critical illness, accidental death, and waiver of premium can be added. Premiums are level for the term and tax-deductible under Section 80C up to ₹1.5 lakh.
Examples
A 30-year-old buys a 1-crore term plan for 30 years at ₹12,000 annual premium, ensuring family financial security at minimal cost.