Life is uncertain and the risk of untimely death is quite relevant. If the bread-winner of the family dies suddenly, the family loses its source of income. In that case, the family faces a major financial crisis. The savings which the family has might not prove to be sufficient to meet all their financial needs of this is where financial security is sought. A term life insurance policy promises this financial security and helps the family deal with the financial loss if the bread-winner dies prematurely.

What is a term insurance plan?

A term insurance policy is a life insurance plan which can be taken by an individual on his or her own life. A specific tenure and sum assured are chosen under the policy. If the life insured dies during the term of the plan, the sum assured selected is paid by the insurance company to the deceased’s family. This lump sum benefit helps the family deal with their financial loss.

How does a term plan work?

Under term insurance plans, usually, a benefit is paid only in case of death during the term of the policy. So, when you buy a policy, you choose the coverage period and the sum assured. You are then required to pay the premium over the chosen period of the policy. If, during the selected tenure, the insured dies, the sum assured is paid to the nominee. If, on the other hand, the insured survives the chosen term of the plan, no benefit is usually paid and the plan comes to an end.

Key features of term insurance plans

Term insurance plans have the following key benefits which you should know to understand the plan better –

  1. Term plans demand very low premiums because the policy covers only the risk of death
  2. There is usually no limit on the coverage that you can avail. You can, therefore, opt for higher coverage levels, as per your requirement, for better financial security
  3. The coverage period of the plan can go up to 30 or 35 years allowing you to enjoy coverage up to very old ages
  4. There is no paid-up value or surrender value under term insurance plans. If you stop paying the premiums the policy would lapse and you would get no benefits
  5. Bonus is not declared under term insurance plans. In case of death, only the guaranteed sum assured is paid
  6. A range of riders is available under term insurance plans. These riders help you in enhancing the scope of coverage of the policy

Types of term insurance plans

Term insurance plans come in different variants and each variant promises something new. Here are the commonly found variants of term plans –

  1. Level term plans

    Level term plans are those in which the sum assured remains uniform throughout the term of the policy. In case of death, the chosen sum assured is paid. Level term plans are the simplest term insurance plans available in the market.

  2. Increasing term plans

    Under increasing term insurance plans, the chosen sum assured increases every year by a fixed amount. In case of death, the sum assured which is available in the year of death is paid. For instance, in a term insurance plan, the sum assured increases by 5% every year. If you buy a policy with a cover of INR 10 lakhs, in the second year the coverage would become INR 10.5 lakhs. In the third year, the sum assured would be INR 11 lakhs, in fourth year INR 11.5 lakhs and so on. If the insured dies in the fourth policy year, INR 11.5 lakhs would be paid in the claim even though the chosen sum assured was INR 10 lakhs.

  3. Decreasing term plans

    Completely opposite of increasing term plans are decreasing term insurance plans. Under these plans, the sum assured reduces every year. Decreasing term insurance plans are usually offered as loan redemption plans wherein the decrease in the sum assured usually equals the reducing balance of the outstanding loan. In case of death, the reduced sum assured available in the year of death is paid. The objective of decreasing term plans is to pay off the outstanding balance of the loan if the borrower dies before repayment.

  4. Term insurance with return of premium

    Also called the return of premium plans or TROP, these plans are different from other types of term insurance plans as they have a maturity benefit. If the insured dies during the term of the policy, the sum assured is paid. If, however, the insured survives the term of the plan, the premiums paid are refunded back. Since the premiums are paid back on maturity, the plan is called the return of premium term insurance plan. This plan is suitable for individuals looking for financial security as well as a benefit on policy maturity.

  5. Group term insurance plans

    Another variant of a term insurance plan is a group term insurance plan. Group plans are bought by recognized groups for their members. These groups can be employer-employee groups, banks and their account holders, clubs and their members, trade unions and their members, etc. Group term plans are offered for one year. All the members are covered under a single master policy. If during the year, any member dies, the corresponding sum assured is paid to the family of the member. Coverage for other members, however, continues. After every year, the plan has to be renewed. Premiums can be paid by the group, its members or by the group and its members in a specified ratio.

Term insurance riders

As mentioned earlier, riders are available with term insurance plans. Riders are additional coverage benefits which you can take by paying additional premiums. Riders are optional in nature and each rider you choose would entail an additional premium. Riders have an independent sum assured which is, usually, equal to the sum assured of the base policy. However, there might be limits on the coverage amount of riders. If the sum assured of the base policy is higher than the maximum rider sum assured, the rider sum assured would be limited to the maximum limit while the base plan’s sum assured would be higher. For instance, suppose a rider’s maximum sum assured is INR 10 lakhs. If you choose a sum assured of INR 25 lakhs in your term insurance policy, the rider sum assured would be limited to INR 10 lakhs while the base policy’s sum assured would be INR 25 lakhs.

Term plans offer multiple riders and you can choose as many riders that you want. However, the total rider premium should not exceed the premium of the base policy. In some cases, the rider premium is not allowed to exceed 30% of the premium of the base policy while in other cases the total rider premium is allowed to be up to 100% of the premium of the base policy.

The common riders which are available under term insurance plans are as follows –

  1. Accidental death benefit rider

    Under this rider, accidental deaths are covered. If the insured dies in an accident, the rider sum assured is paid along with the sum assured of the base policy. Thus, in accidental deaths, you get an enhanced death benefit due to the rider.

  2. Accidental death and disablement benefit rider

    This rider is similar to an accidental death rider but has an added coverage for accidental disablements too. If the insured dies in an accident or suffers from permanent total or partial disablement, the rider pays an additional benefit. In case of accidental death and disablement, 100% of the rider sum assured is paid. However, in the case of permanent partial disablement, a percentage of the sum assured is paid depending on the severity of the disablement suffered. Moreover, in the case of disablement, the benefit might be paid in weekly or monthly instalments and future premiums might also be waived off.

  3. Critical illness rider

    This is a very popular rider which covers named critical illnesses. If the insured is diagnosed with any of the covered critical illness, the rider sum insured is paid in one lump sum.

  4. Term rider

    This rider pays an additional benefit if the insured dies during the term of the plan. This death can be accidental or natural.

  5. Premium waiver rider

    This rider is suitable if the insured is different from the policyholder who pays the premiums. Under this rider, if the premium paying policyholder dies during the term of the policy, the premiums payable for the policy are waived off. The insurance company pays the premium on behalf of the policyholder and the policy continues undisturbed.

  6. Terminal illness rider

    This rider is like the critical illness rider but where the critical illness rider names specific illnesses, this rider does not. If the insured is diagnosed with any type of terminal illness, the rider pays the sum assured so that the insured can deal with the financial implications of his/her illness.

Who should buy a term insurance plan?

A term insurance policy is a necessity for every individual who wants to provide financial security to his/her family. You should, therefore, buy a term plan if –

  • You are the breadwinner of your family
  • Your family is financially dependent on you
  • You have financial goals for yourself and your family which need to be fulfilled

Why should you buy a term insurance plan?

A term insurance policy is a must for every individual who wants to protect his/her family from a financial crisis in his/her absence. The policy promises a high coverage at very low premiums enabling you to opt for an optimal level of coverage. This optimal coverage ensures that your family is well-taken care of financially in case of your absence. No other investment plan promises financial security which term insurance promises and thus, term insurance is a must-buy for everyone.

Benefits of term insurance plans

Term insurance plans are a must because of the following benefits they provide –

  1. The premiums for the policy are very low. At such low premiums it becomes easy for you to afford a coverage which would be optimal enough to provide financial security to your family
  2. Low premiums also mean that you have to part with a limited amount of money to get peace of mind
  3. The riders available with term insurance plans make the plan more comprehensive. You, therefore, get covered for different types of contingencies under a single plan
  4. There are different types of term insurance plans which prove suitable to individuals with varying coverage needs
  5. The premiums that you pay towards a term insurance policy are allowed as a tax-free deduction from your total income. A maximum deduction of up to INR 1.5 lakhs can be claimed under Section 80C. You can, therefore, enjoy the coverage and also save tax in the process
  6. The benefit paid by the plan is also completely tax-free in the hands of your family under Section 10 (10D) of the Income Tax Act. Thus, your family would also be free from any tax liability on the benefits received from the term plan

Top term insurance plans in India

Since term insurance plans are so essential and beneficial, all life insurance companies offer them. Among dozens of term insurance plans available in the market, here are some of the top policies which you can consider for your coverage needs –

1. TATA AIA Life Insurance Sampoorna Raksha Plan

This is a term insurance plan which doubles up as a whole life plan as the plan allows you to avail coverage up to 100 years. The salient features of the plan are as follows –

  1. There are four coverage benefits under the policy
  2. Optional riders are available which help in increasing the scope of coverage
  3. You can pay the premiums throughout the policy term or for a limited period
  4. Eligibility criteria of TATA AIA Life Insurance Sampoorna Raksha Plan

    Entry age

    18 years to 70 years

    Term of the plan

    10 years to (100 – entry age)

    Sum assured

    INR 50 lakhs onwards

2. ICICI Pru iProtect Smart Plan

This policy allows coverage up to 99 years of age ensuring that you are insured for a longer period. The key features of the plan are as follows –

  1. There is an optional critical illness rider which covers 34 critical illnesses and provides a comprehensive scope of cover
  2. There are four types of death benefit pay-out options which pays the benefit in a lump sum, in instalments or in a combination of both
  3. There is an inbuilt terminal illness benefit under the plan
  4. Four coverage options are also available under the policy
  5. Eligibility criteria of ICICI Pru iProtect Smart Plan

    Entry age

    18 years to 65 years

    Term of the plan

    5 years to (99 – entry age)

    Premium

    Minimum – INR 2400

    Maximum – no limit

    Sum insured

    Depends on the premium, age and other factors

3. HDFC Life Click 2 Protect 3D Insurance Plan

This is a term insurance plan which allows different types of coverage options so that you can choose the coverage that you want. The key features of the policy are as follows –

  1. There are nine coverage options which suit the coverage need of everyone
  2. Coverage can be taken for whole life
  3. The sum assured can be increased at marriage or childbirth
  4. Eligibility criteria of HDFC Life Click 2 Protect 3D

    Entry age

    18 years to 65 years

    Term of the plan

    1 month to (100 – entry age)

    Sum assured

    INR 10,000 onwards

4. Bharti AXA Life Flexi Term Plan

This is a flexible term plan which has the following key features and benefits –

  1. Coverage is available up to 85 years of age
  2. Critical illness cover is also available under the plan as an optional rider
  3. There are three pay-out options to ensure that your family receives the benefit in the most suitable way
  4. Eligibility criteria of Bharti AXA Life Flexi Term Plan

    Entry age

    18 years to 65 years

    Term of the plan

    10 years to (85 – entry age)

    Sum assured

    INR 10 lakhs onwards

5. AEGON Life iTerm Insurance Plan

This is a very popular plan offered by AEGON Life Insurance Company which offers a host of benefits to policyholders. The key benefits of the plan are as follows –

  1. Coverage is available until 100 years of age
  2. There are three coverage options under the policy providing a good scope of cover
  3. Females and non-smokers can enjoy lower premium rates
  4. Eligibility criteria of AEGON Life iTerm Insurance Plan

    Entry age

    18 years to 65 years

    Term of the plan

    5years to 82 years

    Sum assured

    INR 25 lakhs onwards

How to choose the best term insurance plan?

When you want to buy the best term insurance policy for yourself, there are some things which you should consider to choose the best plan. These things are as follows –

  1. The plan should allow you to opt for the sum assured that you need. Usually, term plans do not restrict the sum assured but find out the maximum coverage allowed under the plan
  2. The premiums of the policy should be low and affordable so that they prove easier on your pockets
  3. The policy should offer a comprehensive scope of coverage, both inbuilt as well as through riders so that you can ensure an all-round protection
  4. The policy should be flexible so that you can customise it according to your coverage needs
  5. There should be attractive premium discounts which lower the premium of the plan
  6. The claim process of the company should be simple and the claim settlement ratio should be high so that the probability of the settlement of your claims increases

To choose the best term insurance plan you should always compare the available plans before buying. Comparing lets you choose the best plan which offers inclusive coverage benefits and charges low premiums. To compare term insurance plans you can choose Turtlemint. Turtlemint is an online platform which is tied-up with leading life insurance companies offering the best term plans in the market. You can compare and buy a suitable term insurance policy from Turtlemint in a few easy steps which are as follows-

  1. Visit https://www.turtlemint.com/life-insurance and choose ‘Term Life Plans’
  2. Provide your details like your gender, date of birth, marital status, annual income, smoking preference, the sum assured needed and your contact details
  3. You would then be able to check all the best term insurance plans which are available in the market
  4. Compare the available plans and choose one based on your needs
  5. You can then see the details of the plan that you have selected and the total premium payable
  6. Pay the premium, provide your details and the policy would be bought

FAQ’s

Term insurance premiums depend on a lot of factors which are as follows –

  • Age of the insured
  • The health of the insured
  • Medical history
  • Family history
  • Gender
  • Smoking preference
  • Physical build
  • Occupation
  • Riders selected
  • Sum assured
  • Coverage duration
  • Discounts available

No, once the policy is issued, the premiums remain the same throughout the term of the plan.


Suicides committed within 12 months of buying the policy are not covered under term insurance plans. In such cases, the premiums paid are refunded back to the policyholder or the nominee.


If you stop paying a premium for the term insurance plan that you have bought, the policy would lapse. No benefit would be paid in a lapsed policy.


Term insurance premiums can be paid annually, half-yearly, quarterly or monthly. If the premiums are not paid on time, a grace period is allowed which is extra time for paying the premium. During the grace period, the policy does not lapse. You can pay the outstanding premium in the grace period and the coverage would continue. The allowed grace period under most term insurance policies is 30 days or 31 days (one month) if you pay premiums annually, half-yearly or quarterly. For the monthly mode of premium payment, however, the allowed grace period is 15 days.

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